Across all European countries, both large enterprises (LSEs) and small and medium-sized firms (SMEs) have to pay some form of corporate income tax if they have a non-transparent organizational form. On the one hand, there is a multitude of tax incentives in European countries which specifically benefit SMEs. On the other hand, multinational groups can adopt certain tax-planning strategies which are unavailable to national stand-alone firms. In this context, the study aimed to answer the following questions: Which special tax incentives for SMEs exist and which of them are most widely applied? How do these measures affect effective tax burdens for each country and the position in the international ranking? What is the isolated impact of each individual measure? How does the tax reduction due to SME incentives compare to tax advantages of LSEs from profit shifting?