What Countries Have The Lowest And Highest Income Tax?

Countries Tax illustration

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

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

But one of the world’s best kept financial secrets is another nine countries charge no taxes, while nine more have a personal tax rate between 7 and 10 per cent.

Find out more below.

Most other zero-tax nations are in the Caribbean – Anguilla, Antigua and Barbuda, Barbados, Bermuda, the Cayman Islands, and St Kitts & Nevis.

The remaining no tax zone is the island of Brunei in the Asia Pacific.

If you are looking for a tax rate of less than 10 per cent, only two countries come into the equation – Central America’s Guatemala (7 per cent) and Europe’s Montenegro (9 per cent).

A cluster of countries nestles at 10 per cent income tax, including Bosnia-Herzegovina, Serbia, Bulgaria, Macedonia and Romania in Eastern Europe.

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

Zero and low tax countries

The table shows the countries with the world’s lowest personal income tax rates and how the rates have changed over the past five years:

Country20172018201920202021
Anguilla00000
Antigua and Barbuda2525000
Bahamas00000
Bahrain00000
Bermuda00000
Brunei Darussalam00000
Cayman Islands00000
Kuwait00000
Oman00000
Qatar00000
Saint Kitts and Nevis000
Saudi Arabia00000
United Arab Emirates00000
Guatemala77777
Montenegro99999
Bosnia and Herzegovina1010101010
Bulgaria1010101010
Kazakhstan1010101010
Macedonia1010101010
Mongolia1010101010
Romania1610101010
Serbia1510101010
Source: PWC Worldwide Tax Summaries

Countries with the highest tax rates

Finland is the country with the highest personal tax rate – hitting a maximum of 56.95 per cent.

A whisker behind is another Scandanavia nation – Denmark, with an income tax rate of 56.5 per cent, which beats the  55.97 per cent top tax rate of 55.97 per cent.

Slightly under one in four of the 152 countries analysed by PWC Worldwide Tax Summaries charge personal tax at 40 per cent or more.

The UK slots into the listings with the additional tax rate of 45 per cent.

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

Retirees in Portugal can agree to invest in property, while in return pay little or no income tax for up to 10 years, for instance.

Country20172018201920202021
Finland5453.7553.7556.9556.95
Denmark55.7955.8555.8955.8956.5
Japan55.9555.9555.9555.9555.97
Austria5555555555
Sweden57.1257.3457.1932.2852.85
Aruba58.9559525252
Belgium5050505050
Israel5050505050
Slovenia5050505050
Netherlands5251.9551.7549.549.5
Ireland4848484848
Portugal4848484848
Sint Maarten (Dutch part)47.548484848
St Maarten47.548484848
Spain4545454547
Curacao46.54746.546.546.5
Iceland46.2446.2446.2446.2446.25
Luxembourg48.7845.7845.7845.7845.78
Australia4545454545
China4545454545
France4949454545
Germany4545454545
Korea, Republic of4042424245
South Africa4545454545
United Kingdom4545454545
Greece4545454444
Italy4343434343
India35.5435.8835.8842.7442.74
Papua New Guinea4242424242
Chile3535354040
Congo303030040
Congo (the Democratic Republic of the)4040404040
Mauritania4040404040
Senegal4040404040
Switzerland4040404040
Taiwan4540404040
Turkey3535354040
Uganda4040304040
Zimbabwe51.551.5454040
Source: PWC Worldwide Tax Summaries

Expats flock to high tax countries

Expats fleeing offshore to low tax countries is a myth.

Below, Money International has looked up the income tax rates of the top 10 overseas destinations for British expats – and all of them have a rate of 33 per cent or more.

CountryExpat populationIncome tax rateTax ranking
Australia1,300,00045%19
Spain761,00047%15
United States678,00037%46
Canada603,00033%63
Ireland291,00048%11
New Zealand215,00033%64
South Africa212,00045%24
France200,00045%21
Germany115,00045%22
Portugal60,00048%12

What are the income tax rates in the UK?

The current British tax rates are:

BandTaxable incomeTax rate
Personal AllowanceUp to £12,5700%
Basic rate£12,571 to £50,27020%
Higher rate£50,271 to £150,00040%
Additional rateover £150,00045%
Source: HMRC

Income tax rates are different if you live in Scotland

Country Tax FAQ

How can I keep up with changing income tax rates?

Several organisations publish personal and corporate tax rates from around the globe, like accountancy consultants PwC and tax think-tank the Organisation 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 tax and budget periods.

Why are taxes higher in rich countries?

Taxable salaries in less developed countries are not on a par with those in North America and Western Europe, so tax rates are lower.

Paradoxically, the highest tax rates are in some of the world’s wealthiest countries – like Finland, Denmark and Japan.

Where can I find out more detailed tax information?

The PwC Worldwide Tax Summaries have country factsheets with much more detail that are free to download online. You can also compare tax rates across several countries.

Also, try the country’s tax authority website, which will have specific details about taxing expats.

Where are the highest taxed countries?

On average, countries in Northern Europe tend to levy higher taxes than anywhere else.

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

Below is a list of some related articles, guides and insights that you may find of interest.

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