Which countries have the lowest and highest income tax? • International money
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:
|Antigua and Barbuda||25||25||0||0||0|
|Saint Kitts and Nevis||–||–||0||0||0|
|United Arab Emirates||0||0||0||0||0|
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.
|Sint Maarten (Dutch part)||47.5||48||48||48||48|
|Korea, Republic of||40||42||42||42||45|
|Papua New Guinea||42||42||42||42||42|
|Congo (Democratic Republic of)||40||40||40||40||40|
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|
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%|
Income tax rates are different if you live in Scotland
Country Tax FAQ
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.
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.
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.
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.
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