Europe’s Most Expat‑Friendly Tax Systems in 2025

Where your net pay stretches further and the paperwork won’t eat your weekends.

Methodology at a glance

We start with the International Tax Competitiveness Index (ITCI) 2024—the OECD’s own “fair‑but‑simple” league table. Then we layer on three expat‑critical lenses:

1. Special visa or expat tax regime (digital‑nomad visas, 30 % rulings, expert relief).
2. Cost‑of‑living index (Expatistan/Numbeo, Jul 2025).
3. Quality‑of‑life extras (English penetration, infrastructure, inflation).

Combine the scores, and ten European nations stand out.

1. Estonia 🇪🇪

ITCI global rank: #1 — nine years running (taxfoundation.org)

Why expats love it

• Tax on profit only when you distribute it – reinvest and pay 0 %. Flat 20 % personal income tax (PIT).
• Digital‑Nomad Visa lets you live and work for a foreign employer for 12 months (extendable). (visitestonia.com)
• e‑Residency means you can open a company remotely in < 24 h.

Cost snapshot

Single adult: € 2 329/mo in Tallinn. (expatistan.com)

*Eastern Europe’s priciest capital, yet still ~40 % below Zurich.

Watch out for

• High employer social tax (33 %).
• Limited direct flights in winter.

2. Latvia 🇱🇻

ITCI global rank: #2 (taxfoundation.org)

Highlights

• Mirrors Estonia’s “only‑on‑distribution” 20 % CIT model.
• Remote‑Work Visa (1 year, renewable) with € 3 843 gross monthly income proof. (pmlp.gov.lv)
• Low rents: Single adult ~€ 1 491/mo in Riga. (expatistan.com)

Caveats

Slow bureaucracy outside Riga; secondary health‑insurance advised.

3. Switzerland 🇨🇭

ITCI rank: #4

Why it stays in the top 5

• Average effective CIT ~19.7 %; cantonal competition can take it lower.
• No inheritance or wealth tax at federal level; VAT just 8.1 %.
• Salaries among Europe’s highest.

Cost snapshot

Single: CHF 3 900/mo index baseline (~€ 3 900). (expatistan.com)

Visa note

No dedicated digital‑nomad visa; third‑country nationals need a job contract or self‑employment proof via a Swiss AG/GmbH.

4. Lithuania 🇱🇹

ITCI rank: #5

• 15 % CIT; 0 % for small startups (< € 300 k turnover & < 10 employees).
• Flat‑ish 20 % PIT, but generous business‑expense deductions.
• Cost‑of‑living index: Single ~€ 1 900/mo (Vilnius). (numbeo.com)

5. Luxembourg 🇱🇺

ITCI rank: #6

• Enhanced in‑patriate tax regime (from 2025) now reimburses relocation costs + exempts up to 50 % of certain allowances. (bdo.global)
• Top‑10 network of tax treaties; English is common in finance & tech.
• Cost‑of‑living: Single ~€ 3 289/mo (Luxembourg City). (expatistan.com)

6. Hungary 🇭🇺

ITCI rank: #7

• Europe’s lowest CIT – 9 %. (taxsummaries.pwc.com)
• 15 % flat PIT, special “KATA” regime for micro‑entrepreneurs (€ 20 k/year tax cap).
• Cheap housing: Single ~€ 1 500/mo (Budapest). (expatistan.com)

7. Czech Republic 🇨🇿

ITCI rank: #8

• 21 % CIT, 15/23 % progressive PIT.
• R&D super‑deduction (110 %).
• Single adult ~€ 1 840/mo (Prague index 100). (expatistan.com)

8. Slovakia 🇸🇰

ITCI rank: #9

• 21 % CIT; dividends generally tax‑free domestically.
• Family of four ~€ 3 530/mo (nationwide). (expatistan.com)

9. Sweden 🇸🇪

ITCI rank: #12

• Expert Tax Relief: 25 % of salary tax‑free for five years; salary threshold lowered to SEK 88 201/mo ≈ € 7 800 from 2025. (deloitte.com, taxsummaries.pwc.com)
• High VAT (25 %) but progressive services.
• Cost‑of‑living: Single SEK 22 089/mo (~€ 1 900). (expatistan.com)

10. Netherlands 🇳🇱

ITCI rank: #14

• 30 % Ruling: tax‑free allowance for highly skilled migrants; cap at € 233 k salary, gradually shrinking to 27 % by 2027. (agn.org, bdo.global, government.nl)
• Stellar double‑tax‑treaty network.
• Cost snapshot: Single ~€ 3 248/mo. (expatistan.com)

How to choose your launchpad

Pro tip

Before booking your ticket, compare effective tax plus social contributions—all numbers above exclude mandatory health/pension that employers (often) shoulder. You can check your effective tax rate and social contributions based on your salary here 👉.

Key Takeaways

• Small Baltic states punch above their weight thanks to simple, neutral systems.
• Visas matter: Estonia & Latvia roll out the red carpet for remote workers, while Switzerland insists on traditional permits.
• Cost of living can erase tax savings—Zurich’s net pay may still feel thinner than Riga’s, even with a lower nominal rate.
• 2025 brings change: salary threshold drops for Sweden’s tax relief, and the Dutch 30 % ruling starts a slow fade.

Of course, you shouldn’t rely on numbers alone when choosing a country to move to. Factors like climate, culture, language, lifestyle, and personal values often play a more decisive role. Everyone has their own unique set of priorities — and choosing with your heart is just as important as choosing with your head. The good news? Even if your first choice doesn’t feel right, you can always move again. Every move adds to your personal journey and leaves you with invaluable experience and deeper self-awareness.