Forvis Mazars publishes 13th annual CEE Tax Guide

• The 25-country analysis reveals sharp contrasts in employment tax burdens, wage growth, and VAT rates across Central and Eastern Europe and Central Asia.
• Corporate income tax rates in the CEE region range from 9% to 30%, while VAT rates vary between 17% and 27%, underscoring the broad spectrum of fiscal strategies across Central and Eastern Europe.
• Some countries, including Hungary, Bulgaria, and Croatia, provide substantial family tax relief, while others offer little or none.

Forvis Mazars, a leading international audit and advisory firm, has published the 13th edition of its CEE Tax Guide, a comprehensive annual survey comparing tax regimes across 22 European and 3 Central Asian countries. The report provides insight into key tax trends shaping the business environment in the region, from employment taxation and wage developments to corporate tax regimes, VAT structures, digitalisation, and the implementation of the global minimum tax.

Wages are rising, but real income gaps persist

The average minimum wage in the region rose by 9%, and the average gross salary by 8% in the past year, with a regional inflation rate of 4%. However, wage disparities remain significant: Austria and Germany exceed €4,000 in gross monthly salaries, while Ukraine, Moldova, Kosovo, and Albania remain below €1,000.

This year’s guide introduces a new metric, PPP-adjusted net wages, revealing a more nuanced picture of real income. For instance, Slovenia’s average gross salary exceeds Poland’s by €700, yet the two countries are nearly equal in purchasing power. Similarly, Ukraine’s gross wage is just one-third of Greece’s, but PPP adjustments reduce that gap considerably.

Tax wedge remains high across the region

The average tax wedge in the surveyed countries is 38%, notably above the OECD average of 35%. Germany and Slovakia have some of the highest tax wedges (close to 49%), while Kosovo and Moldova are at the lower end (13–16%).

Some countries offer meaningful family tax benefits. For example, in Hungary, the tax wedge for families with three children falls to 23%, compared to 41% for single earners. Bulgaria (21%), Latvia (30%), and Croatia (31%) also demonstrate notable reductions. In contrast, family tax allowances have a limited impact in countries such as Germany and Romania, where tax wedge reductions remain minimal even for larger households.

“Romania’s tax system presents a unique dynamic. While the flat 10% personal income tax rate is competitive, the overall tax wedge remains elevated due to significant social security contributions - 35% paid by employees and an additional 2.25% by employers. This combination means that despite low income tax rates, the effective labour cost burden is still high, limiting disposable income and making it challenging to significantly reduce the tax wedge for families or single earners alike.”, mentioned Edwin Warmerdam, Partner, Head of Tax, Forvis Mazars in Romania.

Corporate income tax and VAT: two ends of the spectrum

Corporate tax regimes vary widely across the region. Hungary maintains the lowest corporate income tax rate at 9%, with Bosnia, Bulgaria, and North Macedonia following at 10%. At the other end, Slovakia (24%) and Germany (30%) have the highest rates in the sample.

In contrast, consumption taxes tend to cluster at higher levels. The regional average VAT rate is 20%, but Hungary (27%), Croatia (25%), and Greece (24%) are outliers. These mixed structures highlight the diverging policy priorities between stimulating business investment and taxing consumption.

“Romania’s corporate income tax rate at 16% has long reflected a pragmatic approach, sitting between low regional rates and higher ones seen elsewhere in Europe. However, the budget deficit has generated, starting with 2024, an increase of corporate taxation, irrespective of the nominal rate being maintained. In this sense, the application of the minimum turnover tax can generate in some cases a significantly higher effective tax rate compared with the nominal rate and is applicable also for companies in a loss position. Moreover, the supplementary tax for the banking industry, on top of the corporate income tax, has generated an additional burden. The trend to increase taxation of capital continues with the 16% dividend withholding tax starting with 2026, up from 10%.

At the same time, there is the intention to reform the tax incentives for supporting R&D activities at the national level. However, it remains to be seen the positive impact of this, as in general, the current corporate tax system raises questions regarding Romanian competitiveness in the region and the tax cost has become more important in investment decisions, having the potential to negatively influence the viability of future projects.”, mentioned Lucian Dumitru, Tax Partner, Forvis Mazars in Romania.

Digital tax administration gains momentum

Many countries are advancing tax compliance through digitalisation. Notably, Hungary and Romania introduced e-VAT systems allowing pre-filled VAT declarations, based on real-time invoice data. Other long-established digital tools - such as electronic cash registers and invoice reporting platforms - further strengthen compliance infrastructure.

Group-level taxation, which enables consolidated tax reporting across related entities, is available in Austria, Germany, Poland, Romania, Hungary, and others, simplifying administration for multinationals. Some countries, such as Hungary and Latvia, apply no general withholding tax on capital income, distinguishing them from the regional norm.

"In recent years, Romania has implemented a series of digital tools aimed at improving tax collection for the state budget. These include e-Invoicing, e-Transport, SAF-T, as well as the integration of cash registers with the ANAF system. These tools became widespread in 2025, with the SAF-T reporting obligation extended to small taxpayers as well. In this context, the next essential step for ANAF is to invest in effective solutions for analysing the large volume of collected data, in order to improve the tax collection rate - which remains the lowest in the region - and thus contribute to reducing the budget deficit. Without this analytical capacity, the planned increase of VAT rates from 5%/9% to 11% and from 19% to 21% risks falling short of delivering the intended impact on budget revenues.”, stated Bianca Vlad, Tax Partner, Forvis Mazars in Romania.

Global minimum tax: policy momentum continues

Fourteen countries covered in the guide - including Austria, Poland, Romania, and Hungary - have implemented the OECD’s Pillar II rules, setting a minimum effective tax rate of 15% for multinational groups with annual revenues exceeding €750 million. While compliance complexity increases, the shift reflects stronger global alignment. By contrast, major economies such as the United States, China, and India have not adopted the framework, leaving questions about long-term convergence.

“Romania’s implementation of the OECD’s Pillar II rules signals a commitment to aligning with global tax standards. At the same time, the recent withdrawal of the United States of America from the Pillar 2 project represents a turning point, with the current context generating uncertainty about the future of this initiative for multinational groups subject to the legislation. We expect the European Union to clarify in the near future whether and how the global minimum tax will be applied.”, mentioned Liviu Gheorghiu, Tax Partner, Forvis Mazars in Romania.

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About the study   

Now in its 13th edition, the Forvis Mazars CEE Tax Guide benchmarks tax systems in 25 countries, providing practical insight for investors, corporate tax professionals, and policymakers. The guide reflects legislative changes effective January 2025 and is available in PDF and interactive formatshere.

About Forvis Mazars

Forvis Mazars is a leading global professional services network. The network operates under a single brand worldwide, with just two members: Forvis Mazars LLP in the United States and Forvis Mazars Group SC, an internationally integrated partnership operating in over 100 countries and territories. Both member firms share a commitment to providing an unmatched client experience, delivering audit & assurance, tax and advisory services around the world. Together, our strategic vision strives to move our clients, people, industry and communities forward.  

Forvis Mazars is the brand name for the Forvis Mazars Global network (Forvis Mazars Global Limited) and its two independent members: Forvis Mazars LLP in the United States and Forvis Mazars Group SC. Forvis Mazars Global Limited is a UK private company limited by guarantee and does not provide any services to clients.

Visit forvismazars.com to learn more.

About Forvis Mazars in Moldova

In Moldova, our team of over 45 professionals has extensive experience in accounting, audit, tax, and labour law, and understands the specificities of the local business environment. Combining global perspectives and insights with deep local understanding, our team is in a unique position to provide customised solutions and strategic advice that support our clients’ long-term business objectives and help them prepare for what’s next on the Moldovan market.

Visit forvismazars.com/mdto learn more.