If you want to move to a country to pay less income tax, you have a wider choice than just the Middle East.
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.
Table of contents
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:
|Antigua and Barbuda||25||25||0||0||0|
|Saint Kitts and Nevis||–||–||0||0||0|
|United Arab Emirates||0||0||0||0||0|
|Bosnia and Herzegovina||10||10||10||10||10|
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.
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.
|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 (the Democratic Republic of the)||40||40||40||40||40|
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.
|Country||Expat population||Income tax rate||Tax ranking|
What are the income tax rates in the UK?
The current British tax rates are:
|Band||Taxable income||Tax rate|
|Personal Allowance||Up to £12,570||0%|
|Basic rate||£12,571 to £50,270||20%|
|Higher rate||£50,271 to £150,000||40%|
|Additional rate||over £150,000||45%|
Country Tax FAQ
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.
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.
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.
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.
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