The most heavily taxed countries in the world are not only distinguished by their marginal income tax rates. The tax pressure relative to GDP remains the best aggregated indicator for comparing tax systems. According to OECD data for 2025, the average ratio of tax revenues reached 34.1% of GDP in 2024, a historical record. This international tax ranking is based on this ratio, supplemented by income tax rates, corporate taxes, and VAT.
1. Denmark
Denmark has a tax revenue/GDP ratio of 45.2%, the highest in the OECD in 2024. The top marginal income tax rate exceeds the symbolic threshold that most countries do not reach, with a system where social contributions are almost non-existent, as nearly all funding for social protection comes from income tax and VAT.
This Danish model relies on a very broad tax base. VAT is applied at a single rate without sector-specific reduced rates. We observe that this structure, often misunderstood, explains why Denmark outperforms France despite a marginal income tax rate sometimes perceived as comparable.
To delve deeper into the tax ranking on Utile au Quotidien, detailed data by type of tax allows for a better understanding of the disparities between Scandinavian countries and the rest of Europe.
2. France
Second in the OECD ranking with a ratio of 43.5% of GDP, France is distinguished by the weight of mandatory social contributions. Unlike Denmark, French social protection relies heavily on levies based on wages, which increases labor costs without necessarily resulting in an extreme marginal income tax rate.
With tax pressure reaching 45.3% according to some measures including local levies, France oscillates between first and second place depending on the methodology used. Another peculiarity: starting in September 2025, the individualized withholding tax rate will become the default setting for married or civil partnership couples.
3. Austria
Austria stands at 43.4% of GDP in tax revenues, just behind France. The Austrian system combines a progressive income tax with high brackets and significant employer social contributions. The corporate tax rate has been lowered in recent years, but this reduction is largely offset by taxation on individuals.
4. Italy
With 42.8% of GDP, Italy completes the top European quartet. The Italian tax system overlays national income tax (IRPEF), regional and municipal surcharges. The VAT at 22% on the normal rate significantly contributes to revenues, while the underground economy reduces the actual tax base and concentrates the burden on declared taxpayers.
5. Belgium
Belgium reaches 42.6% of GDP in levies. The country is regularly cited for its tax wedge on labor among the highest in the world. A Belgian employee bears personal and employer social contributions that, combined with progressive income tax, create a considerable gap between employer costs and net salary.
However, taxation on capital income remains more moderate than in other top 5 countries, with the absence of capital gains tax for individuals in most cases.
6. Finland
Finland applies a dual taxation system: labor income is taxed according to a progressive national scale, supplemented by municipal taxes, while capital income is subject to a flat rate. The revenue/GDP ratio places Finland among the Scandinavian pack, just behind Belgium.
7. Sweden
Sweden combines a municipal income tax (levied by municipalities) and a state tax on high incomes. Employer contributions are high there. The Swedish model illustrates a common trait among Nordic countries: a broad tax base but backed by extensive public services (health, education, retirement).
8. Germany
Germany shows a ratio of 38% of GDP, down from the Franco-Scandinavian bloc. The federal system distributes revenues among the federal government, states, and municipalities. The income tax is progressive with a significant top marginal rate, but the federal structure creates disparities in tax burden depending on the state of residence.
The corporate tax (Körperschaftsteuer) is supplemented by a municipal trade tax (Gewerbesteuer), which raises the combined effective rate above the European average.
9. Hungary
Hungary adopts a radically different approach with a flat tax on individual income. The total tax pressure relative to GDP remains high due to one of the highest VAT rates in the world. This VAT rate, combined with specific sectoral taxes (banks, telecoms, retail), keeps Hungary high in the rankings despite a moderate nominal income tax.
10. Slovenia
Slovenia combines a multi-bracket progressive income tax and high social contributions, both employee and employer. For an economy of this size, the revenue/GDP ratio places it among the most tax-demanding countries in Europe, often overlooked in mainstream rankings.
11. Japan
Japan is on a continuous upward trajectory of its tax pressure. The country combines national income tax, local resident tax, increasing social contributions related to demographic aging, and a consumption tax raised several times in recent years. Corporate taxation, once among the highest in Asia, has been gradually reduced to remain competitive.
12. Serbia
Serbia applies a flat tax on income, but mandatory social contributions (health, retirement, unemployment) significantly increase the total burden. This country illustrates a common trap in rankings: a low income tax rate does not mean a low overall tax burden when social charges take over.
13. Portugal
Portugal has long attracted expatriates with its non-habitual resident regime. However, standard Portuguese taxation remains heavy: a multi-bracket progressive income tax, social contributions for the self-employed, and a normal VAT rate among the highest in Southern Europe. With the special regime for expatriates having been restricted, the actual tax burden for new residents is now approaching the high European average.
14. United States
The American revenue/GDP ratio remains well below the OECD average, but the federal system overlays federal tax, state tax, and sometimes municipal tax. In states like California or New York, the combined marginal rate on high incomes rivals European levels.
- The absence of a federal VAT is offset by state sales taxes that vary significantly from one territory to another
- Social contributions (Social Security, Medicare) are capped, which reduces the progressivity of the system on very high incomes
- Corporate taxation has seen marked reductions, but discussions about a minimum tax on large fortunes continue at the state level
15. Norway
Norway closes this ranking with a peculiarity: oil revenues from the sovereign fund reduce reliance on traditional tax revenues, but tax pressure on households and businesses remains high. The system combines a two-tier income tax, a net wealth tax (unlike most OECD countries that have abolished it), and social contributions.
This ranking of the most taxed countries in the world shows that the actual tax burden depends less on the displayed income tax rate than on the combination of social contributions, VAT, and local taxation. Nordic countries dominate the ranking, but with very different tax architectures from one another.