Just over the border is a country with effective income tax for self-employed businessmen around 5-15%.

Why not name the country?

There are not so many options you couldn't just check yourself... But to answer your question - Poland and Czech Republic.

Well I could but it would take a while, no other country in Europe has as many neighbours as Germany. Thanks for replying.

There are many, Cyprus, Romania, Bulgaria, Andorra to name a few

I would guess Poland

I have been self-employed under a Polish business (działalność gospodarcza) for the last few years. With income tax plus mandatory pension and health contributions, over a third of my income goes to taxes or other mandatory fees (like the requirement to have a licensed accountant keep your books). It really isn’t much different than most other EU countries. And of course one pays a comparable VAT on shopping.

Often in Poland people say “Why are you running your business here? Base it in Czech Republic!” The grass always is greener on the other side.

In Czech Republic as self-employed ("živnostník") your effective tax+insurance rate for income up to 2M CZK (~ 80k EUR) is never more than 15%. I have SW contractor friends paying around 8-12% - including health and social insurance. No need to have any accountant at all for income under 2M CZK, you just keep your invoices and sum your income at the end of a year, the tax return form is online and the sum of income is your only input.

In the UK, SW contractor easily can pay over 50% of tax and can't deduct any business expenses on top of that.

Well, that's sad. What do they get from the state that people in Czech Republic don't?

Nothing. In the UK is the more you pay the less you get.