Income tax is one of the most hated economic aspects in the world. Almost all, including the rich, despise paying income tax. It is a well known adage that death and taxes are the only two things that are certain in life. Well, you will be surprised to know that there are quite a few countries that levy 0 percent, “yes zero percent” income tax!
Most of us want it all, no income taxes and an idyllic life alongside sandy beaches in a country with a high standard of living. It may be noted that not all the countries with low income tax rate offer all of it. But there are some, which most of us would find appealing.
Listed below are top 5 countries with the least income tax.
- Somalia levies 0 percent tax, but no one really wants to live there. Do you?
- The oil-rich Middle East Islamic countries like UAE and Qatar levy 0% taxes, but the lifestyle comes with a lot of restrictions. The UAE is more multi-cultural and offers a little more leeway to non-Muslims in terms of alcohol consumption, etc. But that is about it.
- Saudi Arabia used to levy 0% tax, but since 2017 it has started charging expat tax on expats.
- Brunei is another oil-rich nation with a 0% tax rate. But its government is nearly dictatorial, unwelcoming of foreigners, and the country has Sharia-Law.
- Bermuda, The Bahamas, Cayman Islands, and Monaco also levy 0% income tax.
- Bermuda offers a relaxing and luxurious life, but the cost of living is the most expensive in the world. The richest yacht racing team in the world, namely Oracle Team USA owned by Larry Ellison, is based out of this Caribbean nation.
- Tax haven and British Overseas Territory, the Cayman Islands, also has a really high cost of living.
- One of the richest countries in the world, The Bahamas offers sandy beaches, turquoise waters, and an idyllic life. But getting a permanent residency is a costly affair.
- The playground of the rich and famous, Monaco, also has a high cost for getting citizenship.
- Guatemala levies a 7% tax on residents while Andorra and Bulgaria have a 10 percent tax rate.
- Guatemala is a really poor country, with high unemployment, crime rate, and low standard of living.
- The snow-laden, pleasant country of Andorra situated between Spain and France in the Pyrenees mountains levied a capped tax of 10 percent on those making more than 40,000 Euros per annum.
- Even with a low cost of living and flat 10% tax rate, Bulgaria has high unemployment and low wages.
- Montenegro charges 11 percent income tax on residents. The government has taken out huge loans from China for the Belt and Road initiative. So, it is difficult to predict how life will turn out to be in the country in the future.
- One of the richest places on Earth, Macau levies a progressive tax system with 12% tax as the cap. It is a gambling haven, but a special administrative region of China. Considering what is happening to democracy in Hong Kong, I don’t think it is a good place to live in.
- Russia and Bolivia have a 13% tax rate. Wages in Russia are really low and non-residents need to pay a 30% tax. New fiscal policies and export of natural gas has resulted in rapid economic growth and significant decline in poverty in Bolivia. It still though has a long way to go to become a good place to start a new life in.
- Costa Rica and Hungary charge a 15% income tax while it is 17% in Hong Kong.
- Costa Rica is a good place to visit and check out the wilderness. It is however far from being a country that offers a good standard of living.
- Hungary is an EU country and could be a good place to try temporary residency before opting for a permanent move. The landscapes and rich history of the country are an added bonus.
- Hong Kong is now under the control of China. No need to say more about its livability factor. Also, real estate is extremely expensive there.
- Fiji, Madagascar, and Isle of Man levy 20% tax from its residents. The last is a small island located between Ireland and the UK. Fiji and Madagascar are undeveloped or developing countries.
- The Czech Republic and Singapore levy 22% tax, while a progressive tax with cap at 22.5 percent is charged in Egypt.
- The Czech Republic is an EU country that has a lot to offer in terms of serene landscapes and a decent standard of living. Singapore is a developed nation, but real estate is minimal and costly. It is an ideal place for investors and the corporate world. After the Arab Spring, Egypt is still a country under turmoil.
- Sri Lanka levies a 24% tax while the maximum income tax in the Dominican Republic and Belize is set at 25 percent.
- Even though it is a beautiful country, Sri Lanka has just come out of a decades-long brutal civil war and still developing. Besides that, China has given huge loans to the government which does not bode well for the future of the nation.
- The max income tax in Brazil is 27.5 percent, while it is 28% in Malaysia. The latter is a developed country, but has Sharia law which is applicable only to resident Muslims. Brazil is one of the most vibrant democracies in the world with a multiracial population. It is fast becoming an economic powerhouse. But political instability and corruption has been on the rise, which does not provide an ideal situation for residence.
- Trinidad and Tobago and Jordon charge income tax of 30 percent.
- Poland has two rates of taxation – 18% for those PLN 85,528 or less and 32% for higher earners.
- The maximum income tax in Canada and New Zealand is 33%.
- Malta and Mexico levy up to 35% income tax.
Countries with the lowest or zero income tax (Video)
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