If you’ve ever felt as though much of your working life is spent paying tax before you see any benefit for yourself, you may not be far wrong. With income tax, national insurance or social security, capital gains tax, VAT, council tax, excise duties and more, a significant proportion of income goes to the taxman each year.
Even in retirement, the burden doesn’t disappear. Savings, investments and pensions can all attract taxation, while day-to-day spending is subject to VAT and other indirect levies. After a lifetime of paying into the system, it’s natural to want to ensure you don’t contribute more than necessary. This is where effective tax planning can make a real difference in protecting both your wealth and your legacy.
What Is “Tax Freedom Day”?
Each year, the Institut Économique Molinari publishes research comparing the tax burden across EU member states (plus the UK). It calculates the number of days the average employee must work before they have paid off their annual tax bill.
The date that follows is referred to as Tax Freedom Day: the symbolic moment when individuals stop working for the state and start earning for themselves.
The calculation looks at the average real gross salary (gross income plus employer social security contributions) and deducts income tax, social contributions and estimated VAT. From this, the “real net salary” and “real tax rate” are determined.
The 2025 Picture Across Europe
According to the study, the average Tax Freedom Day across the EU in 2025 was 11 June.
- Malta: Earliest date, 15 April (real tax rate: 29%).
- Cyprus: 24 April, three days later than 2024 (31% tax rate).
- Portugal: 7 June, an improvement of six days on 2024 (43% tax rate).
- Spain: 14 June, four days later than last year (45% tax rate).
- France: Latest date, 18 July (real tax rate: 54%).
Country Snapshots
France
Employees worked 199 days in 2025 before they began to keep their own income. Average gross salary: €62,282. Net after tax: €28,400.
Portugal
Tax Freedom Day fell on 7 June, ranking 11th overall. Workers kept €16,664 net from an average gross of €29,347.
Spain
Spanish employees faced a tax rate of 45%, with Tax Freedom Day on 14 June. Average gross salary: €39,481. Net: €21,733.
Cyprus
Tax Freedom Day landed on 24 April, with workers keeping €22,506 net from €32,723 gross.
Malta
Benefiting from widened income tax bands, Malta’s Tax Freedom Day arrived on 15 April – the earliest in the EU.
The UK: A Rising Burden
In the UK, the Molinari study places Tax Freedom Day on 8 May in 2025, equating to a real tax rate of 35%.
However, the Adam Smith Institute (ASI) takes a broader approach, including indirect taxes. Its analysis puts Tax Freedom Day later, on 12 June 2025, six days later than in 2024 and over 20 days later than before the pandemic.
Worryingly, the ASI warns that “things are getting worse.” Based on government projections, it estimates that by 2028 the date could slip to 24 June, the latest since records began. By 2030, taxation could surpass 50% of Net National Income.
The ASI also highlights that the top 10% of UK earners now contribute more than 60% of total tax receipts, with the top 1% alone paying over 28%. With high-net-worth individuals increasingly mobile, some analysts predict a potential outflow of wealthy taxpayers if the trend continues.
What Does This Mean for You?
These studies are indicative and based on averages. Your personal position may be very different depending on income, assets, and residency status.
- High earners often face later Tax Freedom Days due to progressive tax systems.
- Retirees may avoid social security contributions, but still face taxation on pensions, savings and investments.
- Property owners in certain jurisdictions may also be subject to wealth or local property taxes.
If you feel you are contributing more than you should, now is the right time to review your financial arrangements. Thoughtful planning could help you mitigate tax liabilities, both for your lifetime and for your estate.
Why Tax Planning Matters
Tax planning is not about avoidance; it’s about ensuring you make use of the reliefs, allowances and compliant structures available in your country of residence and the UK.
Areas where planning may help include:
- Pensions – structuring benefits to minimise unnecessary taxation.
- Investments – using tax-efficient vehicles.
- Inheritance – preparing for the UK’s changes to pension inheritance tax from 2027 and local succession rules.
- Cross-border planning – aligning UK rules with those of your country of residence.
Given the complexity of international tax regimes, particularly in Europe, it is essential to take professional, cross-border advice before making decisions.
How Blacktower Can Help
At Blacktower Financial Management, we have over 35 years of experience helping expatriates structure their wealth effectively across borders. Assisting expats in many countries, our advisers combine local knowledge with international expertise.
Our strategic approach focuses on:
- Understanding your personal and family circumstances.
- Reviewing your tax exposure in both the UK and your country of residence.
- Recommending compliant solutions to help you retain and pass on more of your wealth.
By acting early, you may be able to put yourself in a stronger position for 2026 and beyond.
Final Thoughts
Tax Freedom Day is a useful reminder of how much of our year is devoted to taxation. But while averages give a sense of scale, your personal circumstances are unique.
If you are concerned about your current or future tax position—whether in the UK, Spain, Portugal, Cyprus, Malta, or elsewhere—speak to a qualified adviser. We work closely with tax professionals and can introduce you to the right expert if needed. Careful, compliant planning can help you navigate complex rules, protect your assets, and ensure your family benefits from the wealth you have worked so hard to build.
Important Information
This article is for information purposes only and does not constitute investment or tax advice. The information is based on our understanding of current laws and practices, which may change. Any statements concerning taxation are based on current taxation laws and practices, which are subject to change and depend on individual circumstances. You should seek personalised advice from a regulated adviser before making any financial decisions.
This communication is for informational purposes only and is not intended to constitute, and should not be construed as, investment advice, investment recommendations or investment research. You should seek advice from a professional adviser before embarking on any financial planning activity. Whilst every effort has been made to ensure the information contained in this communication is correct, we are not responsible for any errors or omissions.
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