Paying taxes is inevitable. There is no going around that wherever you are residing. Whether the tax rates are high, low, or zero depends on where you are living. Every country has its tax laws, and within that country, the states or province determine their taxes. So, we have compiled a list of the highest to lowest tax rates of countries to find out which countries are tax-havens.
Moreover, taxes vary from country to country. In fact, the average tax rates in the federations like the United States and Canada vary by state. Some countries have high tax rates, while others have relatively low to no taxation. Are they doing well economically with the heavy taxation? Are the low tax rates working in their favor or not?
Let’s get a look at the tax rates of countries to find that out!
Five countries with the highest tax rates
As surprising as it sounds, America’s tax rates are not the highest in the world. There are many countries with a tax burden higher than the United States. With the top tax rate at 37%, the United States has a relatively lower tax than other high-income nations.
Let’s find out the highest tax rate of countries:
Sweden
Sweden is one of the world’s wealthiest countries with beautiful landscapes and a stable economy. Due to its high GDP per capita, Sweden is ranked the world’s 7th most prosperous country. Regardless of the high taxes, Sweden’s economy is flourishing with a high employment rate and GDP.
If we look at the tax rates of countries, Sweden tops the highest taxation globally, with the hefty top marginal tax of 57.1%. Surprisingly, the heavy tax rate of Sweden hasn’t hindered its economical growth. Since the significant finances from the levies go to education, health, and other social benefits, the nation does not have any qualms about paying high taxes.
Individual income tax rate: 32% – 57.1%
Corporate tax: 20.6%
VAT: 25%
Denmark
Considering the high tax rates in Denmark, it might seem strange to see the Danish people living so happily. The social benefits provided in return for the high taxes are the secret of their prosperity. Like Sweden, despite high taxation, Denmark has a stable and growing economy. Denmark ranks at 16th because of its thriving economy based on the world's GDP per capita stats. If we talk in terms of nominal GDP per capita, it ranks at number 6. Along with picturesque terrains, rich historical background, and high standard of living, it is one of the happiest and wealthiest countries in the world.
As we are talking about tax rates of countries, let me tell you that Denmark levies its people with tax rates of 55.8%. And the Danish people pay the high taxes quite happily because of the welfare services provided to them from their tax money.
Individual income tax rates: 39.8% – 55.8%
Corporate tax: 22 – 25%
VAT: 25%
Belgium
If you want to move abroad, you should be aware of the tax rates of countries so you can make an intelligent decision. If you want to call the world’s 15th largest trading nation, Belgium, your home, then let me tell you the tax rates in Belgium are high. Undoubtedly, the industrial development in Belgium is inspirational. Ever since Belgium’s Industrial Revolution, it has been rated as one of the most developed countries globally. The industrial advancement and solid economic system attract ex-pats to reside there. However, keep in mind that top marginal tax rates are as high as 53.7%, the highest tax rate in Western Europe.
Individual income tax rates: 25% – 53.7%
Corporate tax: 25%
VAT: 21%
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Slovenia
Slovenia is the European Union’s smallest country with a community of only 2.5 million residents. This South Slavic country is geographically diverse and had been a part of Yugoslavia during the 20th Century. Even as a part of Yugoslavia, it was the most developed state. And now it is thriving as a small country independently.
The tax rates in Slovenia are comparatively higher than in Yugoslavia’s communist states. In terms of tax rates of countries, the Slovenes are charged with massive marginal tax rates of 50%. Moreover, it is considered the richest amongst Slavic countries, more so than its powerful Eastern Slavic neighbor, Russia.
Individual income tax rates: 16% – 50%
Corporate tax: 19%
VAT: 22%
The Netherlands
You must have heard about the Netherlands ’ fantastic art museums, Amsterdam Canals, cheese, and beautiful country towns. But have you heard of what the tax rates are in the Netherlands? Indeed, if you wanted to live there and admire all there is to see, you would want to know how much tax a citizen has to pay. As we are already comparing tax rates of countries, let’s see where the Netherland falls in terms of taxation.
The Netherlands is among the world’s 17th largest economies. Its proximity to the markets of the UK and Germany gives it great trading opportunities. The port of Rotterdam is the largest European harbor, which makes it the hub of international trade worldwide. The booming economy earned it a place among the ten wealthiest countries of the world. The civilians under 65 years old with a taxable income of over 66,000 euros have to pay income tax rates of 52%. Businesses with a profit of over 245,001 Euros have to pay 25% corporate tax and 15% tax on profit under 245,000 Euros.
Individual income tax rates: 36.5% – 49.5%
Corporate tax: 15 – 25%
VAT: 21%
Five lowest tax rates of countries
Now that we have gone through some of the least tax-friendly countries, let’s talk about the countries with the lowest tax rates. It might come as a surprise, but there exist tax havens that levy low to no taxes on their citizens.
Singapore
If you are looking to move abroad, invest your money and call it home, you should have a look at the tax rates of countries. Do you want to know which developed country has the lowest and most attractive tax regime?
It is none other than Singapore, a tax haven for investors and entrepreneurs. The tax-friendly policies attract millionaires from the US and worldwide to run a business and live there. The residents are charged with a personal income tax rate of 0 – 22%, whereas ex-pats are taxed with a flat rate of 15% – 22%. Their Global Investor Program offers residence permits to investors who invest around $2 million in funds or a business.
For an ex-pat, Singapore is a perfect destination with low taxes, a stable Government, a progressive economy, and a business-centric community. If you have high-net-worth and want to invest and live near evolving markets like Malaysia and Indonesia, Singapore is the way to go.
Individual income tax rates: 22%
Corporate tax: 17%
VAT: 7%
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Jersey
Although Jersey is a British Crown Dependent state and has the constitutional right to govern its own country, it is not entirely independent of the United Kingdom because it is constitutionally dependent on the UK for defense.
Coming to the tax rates of countries, Jersey is another country with a low tax burden. The annual income tax is as low as 20%. It would be an excellent destination for ex-pats or nomads who would love to reside somewhere closer to London. A tax-friendly country in British Islands where you can own a beautiful manor with lush gardens and enjoy some privacy. Sounds tempting, doesn’t it?
Individual income tax rates: 20%
Corporate tax: 0%
VAT: 5%
Monaco
Monaco is a South European Principality, situated on the Mediterranean coast. The multicultural Principality of Monaco is safe and modern for foreigners looking to spend their money and life in a charming yet tax-friendly country. The only drawback is that the cost of living is high in Monaco.
The personal income tax is zero for Monegasque and foreigners alike. Unfortunately, French nationals are exempt from this law. They are levied with tax rates of 0% – 45%, equivalent to France. A French national residing in Monaco since 1957 does not have to pay taxes like any other Monaco citizen. No wonder Monaco is categorized as the most desirable location with one of the lowest tax rates of countries.
Individual income tax rates: 0%
Corporate tax: 28%
VAT: 5.5 – 19.6%
Bahamas
The proximity of the Bahamas to the United States brings a lot of tax ex-pats to this reclusive small country. It offers tax-free life and a sanctuary for those who want some privacy while staying close to the US. The Bahamas is ideal for entrepreneurs with high net worth who want to make the most of a tax-friendly regime. It is one of the less expensive Caribbean Islands, where you can have a laidback life with no taxes.
As the Bahamas is an establishing country, the government looks forward to investors wanting to settle there. That’s how seven or more years of residence can get your citizenship in the Bahamas. When you compare tax rates of countries, the Bahamas is a state that is placed at the lowest end of the tax burden.
Individual income tax rates: 0%
Corporate tax: 0%
VAT: 12%
Social Security tax: 8.8%
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United Arab Emirates
Many Arab countries are tax-free, but the United Arab Emirates tops the list due to its strong economy and wealthy status. Zero tax is not the only reason UAE attracts a lot of investors and ex-pats. The multicultural country holds some of the most beautiful tourist attractions. Especially in Dubai, the city of gold, dreams, life, whatever you call it. Open trade, investment opportunities, and low tax rates of UAE earned it the status of the world’s 10th freest economy.
Unlike other Gulf countries, it is easier to reside in UAE. As of lately, the government is issuing a 10-year resident visa to ex-pats. After all, who wouldn’t want to live in a country with zero tax, a high standard of living, and economic prosperity?
Individual income tax rates: 0%
Corporate tax: 0%
VAT: 5%
Final Thoughts
Like it or not, you have to pay taxes as a US citizen. However, it is not the least tax-friendly country out there. There are countries with far higher tax rates than the US. Likewise, you will be excited to know that certain nations are levied with the lowest to no tax at all.
Do you want to move to a tax haven with a thriving economy? Or are you okay with living in a highly taxed country that also comes with economic prosperity and some great social benefits? Now, you can make a sound decision for your future based on our tax rates of countries list 🙂
Since we concluded which countries have what taxes, keep these money tools with you wherever you are. It will certainly help you to handle any financial troubles that come with moving to a new place.