Which countries have the lowest and highest income tax? • International money

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If you want to move to a country to pay less income tax, you have a wider choice than the Middle East.

The first zero-tax countries that come to mind are the Gulf States, particularly the United Arab Emirates, Kuwait, Qatar, and Saudi Arabia.

But one of the world’s best-kept financial secrets is that nine other countries levy no taxes, while another nine have personal tax rates of between 7 and 10 percent.

Learn more below.

Most of the other zero-tax countries are found in the Caribbean – Anguilla, Antigua and Barbuda, Barbados, Bermuda, the Cayman Islands, and Saint Kitts and Nevis.

The remaining tax-free area is the island of Brunei in the Asia-Pacific region.

If you’re looking for a tax rate below 10 percent, only two countries come into play: Guatemala in Central America (7 percent) and European Montenegro (9 percent).

A group of countries nestle at 10 percent income tax, including Bosnia and Herzegovina, Serbia, Bulgaria, Macedonia and Romania in Eastern Europe.

Bulgaria and Romania are also members of the European Union, but the bad news for expats is that they stay outside the Schengen area to travel visa-free across Europe.

Zero and low tax countries

The table shows the countries with the lowest personal income tax rates in the world and the evolution of rates over the past five years:

Country 2017 2018 2019 2020 2021
Anguilla 0 0 0 0 0
Antigua and Barbuda 25 25 0 0 0
Bahamas 0 0 0 0 0
Bahrain 0 0 0 0 0
Bermuda 0 0 0 0 0
Brunei Darussalam 0 0 0 0 0
Cayman Islands 0 0 0 0 0
Kuwait 0 0 0 0 0
Oman 0 0 0 0 0
Qatar 0 0 0 0 0
Saint Kitts and Nevis 0 0 0
Saudi Arabia 0 0 0 0 0
United Arab Emirates 0 0 0 0 0
Guatemala 7 7 7 7 7
Montenegro 9 9 9 9 9
Bosnia herzegovina ten ten ten ten ten
Bulgaria ten ten ten ten ten
Kazakhstan ten ten ten ten ten
Macedonia ten ten ten ten ten
Mongolia ten ten ten ten ten
Romania 16 ten ten ten ten
Serbia 15 ten ten ten ten
Source: PWC Worldwide Tax Summaries

Countries with the highest tax rates

Finland is the country with the highest personal tax rate – reaching a high of 56.95 percent.

A mustache behind is another Scandinavian country – Denmark, with an income tax rate of 56.5 percent, which exceeds the maximum tax rate of 55.97 percent by 55.97 percent.

Just under one in four of the 152 countries analyzed by PWC Worldwide Tax Summaries apply a personal tax of 40% or more.

The UK enters the lists with the additional tax rate of 45 percent.

Some countries, like Portugal, have special tax rates for expats traveling to the country on a golden visa or passport.

Retirees in Portugal can agree to invest in real estate, while paying little or no income tax for up to 10 years, for example.

Country 2017 2018 2019 2020 2021
Finland 54 53.75 53.75 56.95 56.95
Denmark 55.79 55.85 55.89 55.89 56.5
Japan 55.95 55.95 55.95 55.95 55.97
Austria 55 55 55 55 55
Sweden 57.12 57.34 57.19 32.28 52.85
Aruba 58.95 59 52 52 52
Belgium 50 50 50 50 50
Israel 50 50 50 50 50
Slovenia 50 50 50 50 50
Netherlands 52 51.95 51.75 49.5 49.5
Ireland 48 48 48 48 48
Portugal 48 48 48 48 48
Sint Maarten (Dutch part) 47.5 48 48 48 48
Saint-Martin 47.5 48 48 48 48
Spain 45 45 45 45 47
Curacao 46.5 47 46.5 46.5 46.5
Iceland 46.24 46.24 46.24 46.24 46.25
Luxembourg 48.78 45.78 45.78 45.78 45.78
Australia 45 45 45 45 45
China 45 45 45 45 45
France 49 49 45 45 45
Germany 45 45 45 45 45
Korea, Republic of 40 42 42 42 45
South Africa 45 45 45 45 45
UK 45 45 45 45 45
Greece 45 45 45 44 44
Italy 43 43 43 43 43
India 35.54 35.88 35.88 42.74 42.74
Papua New Guinea 42 42 42 42 42
Chile 35 35 35 40 40
Congolese 30 30 30 0 40
Congo (Democratic Republic of) 40 40 40 40 40
Mauritania 40 40 40 40 40
Senegal 40 40 40 40 40
Switzerland 40 40 40 40 40
Taiwan 45 40 40 40 40
Turkey 35 35 35 40 40
Uganda 40 40 30 40 40
Zimbabwe 51.5 51.5 45 40 40
Source: PWC Worldwide Tax Summaries

Expats flock to high tax countries

Expats fleeing overseas to low-tax countries are a myth.

Below, Money International has researched the income tax rates of the top 10 overseas destinations for UK expats – and all of them have a rate of 33% or more.

Country Expat population Income tax rate Tax classification
Australia 1,300,000 45% 19
Spain 761,000 47% 15
United States 678,000 37% 46
Canada 603,000 33% 63
Ireland 291,000 48% 11
New Zealand 215,000 33% 64
South Africa 212,000 45% 24
France 200,000 45% 21
Germany 115,000 45% 22
Portugal 60,000 48% 12

What are the UK income tax rates?

The current UK tax rates are:

Bandaged Taxable income Tax rate
Personal allowance Up to £ 12,570 0%
Base rate £ 12,571 to £ 50,270 20%
Higher rate £ 50,271 to £ 150,000 40%
Additional rate over £ 150,000 45%
Source: HMRC

Income tax rates are different if you live in Scotland

Country Tax FAQ

How can I follow the evolution of income tax rates?

Several organizations publish personal and corporate tax rates around the world, such as accounting consultants PwC and the tax think tank the Organization for Economic Co-operation and Development (OECD).

The data is regularly reviewed, but the information is not necessarily easy to compare because countries have different fiscal and budget periods.

Why are taxes higher in rich countries?

Taxable wages in less developed countries are not comparable to those in North America and Western Europe, so tax rates are lower.

Ironically, the highest tax rates are found in some of the richest countries in the world, such as Finland, Denmark and Japan.

Where can I find more detailed tax information?

The PwC Worldwide Tax Summaries contain much more detailed country fact sheets that you can download for free online. You can also compare the tax rates of several countries.

Also try the country’s tax administration website, which will have specific details on taxing expatriates.

Where are the most taxed countries?

On average, northern European countries tend to levy higher taxes than anywhere else.

Finland, Denmark and Sweden rank among the top five most taxed countries, while Iceland slips into the top 20 in 19th place.

Below is a list of a few related articles, guides, and ideas that you might be interested in.

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