The three least attractive countries were the Czech Republic, Romania and Greece. All three lost support for having high volumes of complex legislation, with frequent changes.

These views were compiled from more than 400 interviews of tax professionals in multinational companies across Europe. Survey participants were asked how attractive they believed their country’s tax regime was compared with other European states.

KPMG took the percentage of respondents who thought key aspects of their domestic systems were attractive and subtracted those who felt they were unattractive, to give a net attractiveness score for each country.

KPMG's survey also showed that being in a country with an unattractive tax regime is not simply an inconvenience for business. Almost 70% of respondents who thought their country’s tax regime was unattractive also believed that this put their companies at a competitive disadvantage when competing with foreign companies.

But in those countries with an attractive regime, just 43% of respondents felt that this gave them a competitive advantage when competing overseas.

Sue Bonney, Head of Tax for KPMG Europe LLP and partner in the UK member firm, commented: “I was interested to see that a complex tax regime is seen as a hindrance to competitiveness, but relatively few people felt that a simpler system with a low rate can help make businesses more competitive. Governments across the world have been using tax as a lever to encourage inward investment for many years, but these results help to confirm that a benign tax regime is only part of the package which makes a business competitive. Good infrastructure, a high quality workforce and access to raw materials and markets are all equally important.”

The survey explored participants’ attitudes to particular aspects of their home tax regime, including consistency, stability over time, volume of legislation, the tax rate and relations with tax authorities.

At a European level, the most unattractive area was the volume of tax legislation, with a net attractiveness score of just 28%. But this concealed a huge variation at a country level, with 100% of respondents in Cyprus saying that the low volume of tax legislation there made the country attractive, and all of the Romanian respondents declaring that volume of legislation in their country was too high.

Relations with tax authorities were generally positive, with an average of 60% across Europe saying that this was an attractive part of their regime. The countries with the highest scores in this area were Ireland, Switzerland, Estonia, Finland, Denmark, Slovenia and Lithuania. Those with the poorest were Germany, Spain, Italy, the Czech Republic and Greece.

“These results help to illustrate just how much businesses across Europe dislike uncertainty and complexity. The volume of tax legislation is huge and its interpretation is often opaque. Simplification presents a real challenge for European tax authorities," added Bonney.

“But it is very encouraging to see that relations between tax authorities and taxpayers are generally good. Our member firms’ view is that it is only by co-operation and the building of trust between tax authorities, taxpayers and tax advisers that many of the problems with today’s complex tax regimes can be solved," she concluded.