Income tax in different countries. “How much does it cost to sleep peacefully”: income taxes in countries around the world
Every year, the World Economic Forum publishes its report on the global competitiveness of the world economy. The WEF looks at data ranging from the number of math teachers in schools to the inflation rate in each country. This data is used to create a holistic picture for each country. One of the indicators that the WEF uses is the level of taxes, which indicates low competitiveness. The World Bank's general tax rate is used to measure tax.
In principle, all of these taxes are levied on businesses, but they are different from those levied on the people who work for them. We will look at countries with total tax rates greater than 50%.
Japan - 51.3%
Japan has one of the largest economies, despite the fact that the tax rate is more than 50%. This country is the fifth-highest tax country in Asia.
Mexico - 51.8%
It is among the small number of Latin American countries that have tax rates above 50%. The tax rate for corporations is 30%.
Ivory Coast - 51.9%
Ivory Coast requires a 25% basic tax on corporate profits and about 30% on telecommunications, IT and communications sectors.
Austria - 52%
One of six European countries with a tax rate of more than 50%. The Austrian tax system has some oddities. For example, couples are taxed separately even after getting married.
Ukraine - 52.9%
Entrepreneurs in Ukraine have to contend not only with serious geopolitical problems, but also with virtually the highest taxes in Europe. Only four European countries have a higher tax rate.
Sri Lanka - 55.6%
The basic tax rate in Sri Lanka for corporations is 28%, but this rises to 40% for any business that decides to deal in alcohol or tobacco products. The overall tax rate is much higher due to many additions.
Belgium - 57.8%
The European Union country has the fourth-highest tax rates in the Eurozone and the highest among non-Big Five countries.
Costa Rica - 58%
There are few countries in Central America with tax rates significantly higher than 50%. But Costa Rica turned out to be one of them. This is partly due to the high level of tax activity in recent years, which has led policymakers to pass legislation to increase overall taxes.
Spain - 58.2%
Only two of the Big Five European countries were able to overtake Spain in terms of business tax rates.
India - 61.7%
India's finance ministry's policy now aims to cut corporate tax levels by more than five percentage points over four years.
Tunisia - 62.4%
Although there are many other countries further south that have higher prices, the overall tax rate in Tunisia is a respectable second highest in North Africa.
Benin - 63.3%
The World Bank says the country's corporate income tax is only 15.9%. But many other taxes significantly raise the level of contributions a firm must make.
Gambia - 63.3%
Without basic natural resources, the country is among the poorest in the world. Taxes on turnover rather than profits significantly raise business rates.
Chad - 63.5%
Chad relies heavily on agriculture and is considered one of the poorest countries. Taxes here are equal to 1.5% of turnover or 40% of profit, whichever is higher.
China - 64.6%
Like many other countries on our list, China levies taxes not on business profits, but on their turnover.
Italy - 65.4%
It is known for its high tax rates, although it is still not the first in Europe in this regard.
Venezuela - 65.5%
The government of this country, led by Hugo Chavez, introduced a new tax model and sharply increased the rate for foreign companies.
Nicaragua - 65.8%
In 2012, the IMF proposed that the country simplify its corporate tax system.
France - 66.6%
It tops the list of European countries, although the current government has promised to regulate the system and cut corporate taxes.
Guinea - 68.3%
Most Guinean corporate taxes are paid through a flat rate tax on the previous year's turnover.
Brazil - 69%
The economy of this country is considered the largest in Latin America. Brazil last year eliminated a 20% tax on business payrolls as part of an overhaul of its tax system.
Mauritania - 71.3%
The agriculture-dependent country adopted a 15% withholding tax in 2013 to stop payments being made to non-residents.
Algeria - 72.7%
This country has the highest overall tax bill in Africa.
Colombia - 75.4%
The country has adopted a new wealth tax. Although it ranks fourth in the world in terms of taxes, Colombia is only third in Latin America.
Tajikistan - 80.9%
This Central Asian country has a 2% statutory tax rate on all turnover, which takes up a significant portion of the average company's profit.
Bolivia - 83.7%
Bolivia's 3% transaction tax wipes out 60% of a company's profits before other taxes are taken into account. But it still loses to another Latin American country.
Argentina - 137.3%
Amazingly, the overall tax rate in Argentina exceeds 100% of corporate income. Turnover taxes alone eat up 90% of profits, and that’s before taxes on payroll and financial transactions are taken into account!
This is a mandatory, individually gratuitous payment levied on organizations and individuals in the form of alienation of funds belonging to them by right of ownership, economic management or operational management for the purpose of financial support for the activities of the state and (or) municipalities.
There are lucky people in the world who do not pay income tax at all - these are residents of rich oil-producing countries (UAE, Qatar, Kuwait), the Bahamas and Bermuda, the Principality of Monaco, etc. In a number of other countries in Eastern Europe there is a flat tax scale. That is, the rate is the same for a person with any amount of income. In our country it is 13%, the same in Belarus, in Lithuania - 15%, in Ukraine - 18%. The lowest is in Kazakhstan - 10%. But in most countries there is a progressive income tax: the higher the earnings, the higher the rate.
Income tax in the world
Income tax - in the personal income tax (NDFL) - is the main type of direct taxes. Calculated as a percentage of the total income of individuals minus documented expenses, in accordance with current legislation.
Over the past year, the topic of introducing a progressive income tax has been hotly debated in Russia. Let us remind you that today there is a flat scale - everyone pays a single rate of 13%, regardless of the amount of income received. The progressive scale allows you to increase the rate for those who receive excess profits. This issue is quite controversial - the majority of pro-government officials are against such “discrimination” against the rich, while the public has already “mature” and demands an increase in the tax burden for the minority that has huge capital.
In any case, this acute social issue remains only at the stage of discussion. There are many models in the world. Moreover, we will find something to surprise you: there are many frankly happy countries whose citizens do not pay taxes at all! Perhaps we’ll start with them.
Where do you not need to pay taxes?
Among the happiest countries that have exempted their citizens from income taxation are primarily resource-rich countries such as the United Arab Emirates, Qatar, Bahrain, Oman and Kuwait. There is often the idea that residents are also exempt from them, which is a misconception. The tax may be small - only 2.5% on any profit received - but it still exists. In addition to them, the principalities of Monaco, the Bahamas and Bermuda claim the status of a real “tax paradise”. There are certainly some tax exclusions there. For example, in the Bahamas and Bermuda, citizens have to pay their own insurance premiums, while in Monaco, French citizens are subject to taxes. However, in In general, the vast majority of citizens are actually exempt from taxes. But none of them were lucky.
In many countries where there is a progressive tax scale, citizens with low incomes also do not pay income tax. True, in this case it would be a stretch to classify them as “lucky” people. These, in particular, are considered to be Australians whose income is below $4.6 thousand per year, Austrians with an annual income below $12.5 thousand, Brazilians earning less than $5.3 thousand per year, Germans with an income of less than 9 thousand $ and many others. For example, Swedes who earned less than $2.2 thousand in a year. The amount, frankly speaking, is insignificant for Sweden, but whoever earned less does not pay taxes. Similar tax-free limits have been defined in the wonderland of Singapore. It uses a territorial tax system, but in general, anyone who earned less than $16,000 per year or earned income outside of Singapore is exempt from taxes.
A similar scheme operates in - The British also have a minimum that is not subject to tax - this is 11 thousand £. It is noteworthy that this amount is not taxed, even if the citizen earns significantly more: with income up to £100 thousand, the tax-free amount is deducted from the tax base. Income tax is paid only on the remaining amount. For example, having earned £15 thousand in a year, taxes will be paid on only £4 thousand. At the same time, the rates of progressive personal income tax are very significant and amount to 20% for income up to 35 thousand, 40% for income up to 150 thousand, 45% for all income that is above the specified qualification.
What about them?
It should be noted that progressive income tax rates are defined in many developed countries, both and the West in general. For example, where tax rates fluctuate between 10 and 39.6%, of course, depending on the income received. The lower tax rate is paid by all those whose annual income does not exceed $9.2 thousand. The upper limits are for the outright rich, whose income exceeds 418 thousand per year. These, by the way, are the limits for single citizens; married couples pay completely different rates and limits. In addition, there are many reasons for tax deductions in the United States. This includes, in particular, having dependents, paying for education (your own or your child’s), having mortgage loans, or paying property taxes. The trick is that citizens are required to simultaneously pay taxes to both the federal and state budgets. Moreover, the US tax system is so complex that it would take an entire article to describe it, so we will only describe it in general terms.
The maximum income tax rate was recorded in socially oriented Sweden – 56.4%, which took first place in the ranking. In many ways, this rate in recent years has led to the outflow from the country of some professions in demand on the market with high salaries. The second place in the ranking is occupied by Belgium, where the maximum personal income tax rate is 53.7%, the Netherlands is in third (52.0%), followed by tax rates of 51.5% and 50.0% (the same in the UK). Russia, with its flat tax scale and rate of 13%, is in a modest 34th place out of 37 ranking positions (4th place from the bottom of the ranking). The income tax is lower than our country only in Belarus (12.0%), Bulgaria and Kazakhstan (10.0% each).
The French tax system is no less strict. The citizens themselves constantly complain about huge tax levies, from which many even managed to flee the country (like, for example, Gerard Depardieu, who received Russian citizenship). Traditional tax return submitted by almost all citizens in February, and it usually indicates absolutely all income receipts. Hiding income, such as income from renting out property or selling a car, is usually detected by tax authorities, after which citizens have to pay serious fines.
As in America, income tax in France has some specific features, which in many ways are very logical. So, income taxes are levied not on a specific citizen, but on a household. That is, the tax is paid on the total family income. Moreover, separate coefficients are applied depending on the number of family members. So, for singles, a coefficient of 1 is applied, for married couples, respectively, 2, if they have a child, the coefficient will be 2.5, etc. This coefficient is used to divide the household tax base by it, after which the tax is calculated. It turns out that the more family members without income, for example, children, the smaller the tax base will be, and therefore the taxes paid. In addition, tax deductions are provided for philanthropists and investors, those who pay for education, have dependents, participate in energy saving systems, etc.
is considered a country with one of the most stringent tax systems. The French themselves constantly complain about the amount of their taxes, and some of them even flee to other countries and pay taxes there. The French usually fill out their income declaration in February and send it to the local tax office by mail. It must indicate absolutely all types of income: salaries, benefits, profits from renting out apartments, etc. Everything must be indicated as honestly as possible, because tax officials will still find unaccounted income and impose a substantial fine for incorrect information.
The main feature of income tax in France is that it is calculated not on a specific individual, but on a household. Single people are considered a family of one. And to calculate taxes for them, a coefficient of 1 is applied. If there is a husband and wife in the family, then the coefficient will be 2. Spouses with one child - a coefficient of 2.5, etc. The total amount of income is divided by this coefficient, and they calculate from it tax at the rate. That is, in France it is very unprofitable to be single and childless. Taxes will be as high as possible. The more children in a family, the lower the tax. This is a form of fertility support.
In addition, the size of the tax base and the amount of tax can be reduced in other ways. For example, deductions can be obtained if you make charitable contributions or invest in medium and small businesses, pay for children’s education in kindergartens and schools, support incapacitated relatives, spend on purchasing energy-saving appliances in the house, etc. As for rates, annual household income is up to 9710 euros (or 809 euros per month) are tax-free.
Households with an income of up to 26 thousand euros per year (2234 euros per month) pay a tax rate of 14%, up to 71898 euros - 30%, up to 152898 euros - 41%, over 152260 -41%. In addition, the income of wealthy French people is subject to additional tax. From 250 to 500 thousand euros - 3%, from 500 thousand euros - 4%. The famous tax on millionaires, according to which the state took 75% of income from those with income over 1 million euros, has been abolished.
As for progressive rates: with an annual income of 9.7 thousand €, no tax is paid; with income up to 26 thousand € - 14%, up to 71 thousand € - 30%, up to 153 thousand € and above - 41%. Interestingly, for those who have a high income of 250, 500 and above thousand €, there is also an additional tax of 3-4%. Previously, there was also a special tax for millionaires, but they decided to abandon it.
The procedure for collecting income tax in each specific country is individual. For example, in Russia there is a uniform rate of 13% for everyone (regardless of income level). This is the so-called flat income tax rate. In Russia, the transfer of this tax to the budget is carried out directly by the organization in which the employee works.
Most developed countries have progressive income tax rates. Those. the higher the annual income, the higher the rate.
There are also countries where there is no income tax at all. Basically, these are either tiny principalities in Europe, or small island states, or countries of the Middle East.
Some countries that wish to attract more foreign investment and wealthy citizens may offer special tax regimes. These special preferential tax regimes for new tax residents can last as long as desired (eg UK, Malta) or be limited in time (eg Portugal).
Income tax in countries around the world. Table:
| A country | Last | Previous | Highest | Lowest | ||||
|---|---|---|---|---|---|---|---|---|
| Sweden | 61.85 | 2018-12 | 61.85 | 61.85 | 51.5 | % | Annual | |
| Chad | 60.00 | 2018-12 | 60 | 60 | 60 | % | Annual | |
| Ivory Coast | 60.00 | 2018-12 | 60 | 60 | 60 | % | Annual | |
| Aruba | 59.00 | 2018-12 | 59 | 60.1 | 59 | % | Annual | |
| Japan | 55.95 | 2018-12 | 55.95 | 55.95 | 50 | % | Annual | |
| Denmark | 55.80 | 2018-12 | 55.8 | 65.9 | 55.4 | % | Annual | |
| Austria | 55.00 | 2018-12 | 55 | 55 | 50 | % | Annual | |
| Belgium | 53.70 | 2018-12 | 53.7 | 60.6 | 53.7 | % | Annual | |
| Netherlands | 52.00 | 2018-12 | 52 | 60 | 52 | % | Annual | |
| Finland | 51.60 | 2018-12 | 51.6 | 62.2 | 49 | % | Annual | |
| Israel | 50.00 | 2018-12 | 50 | 50 | 45 | % | Annual | |
| Slovenia | 50.00 | 2018-12 | 50 | 50 | 41 | % | Annual | |
| Zimbabwe | 50.00 | 2018-12 | 50 | 51.5 | 36.05 | % | Annual | |
| Luxembourg | 48.78 | 2018-12 | 48.78 | 51.3 | 39 | % | Annual | |
| Ireland | 48.00 | 2018-12 | 48 | 48 | 41 | % | Annual | |
| Portugal | 48.00 | 2018-12 | 48 | 48 | 40 | % | Annual | |
| Germany | 47.50 | 2018-12 | 47.5 | 57 | 44.3 | % | Annual | |
| Iceland | 46.30 | 2018-12 | 46.3 | 46.9 | 35.7 | % | Annual | |
| Australia | 45.00 | 2018-12 | 45 | 47 | 45 | % | Annual | |
| China | 45.00 | 2018-12 | 45 | 45 | 45 | % | Annual | |
| France | 45.00 | 2018-12 | 45 | 59.6 | 45 | % | Annual | |
| Greece | 45.00 | 2018-12 | 45 | 45 | 40 | % | Annual | |
| South Africa | 45.00 | 2018-12 | 45 | 45 | 40 | % | Annual | |
| Spain | 45.00 | 2018-12 | 45 | 56 | 43 | % | Annual | |
| Taiwan | 45.00 | 2018-12 | 45 | 45 | 40 | % | Annual | |
| Great Britain | 45.00 | 2018-12 | 45 | 50 | 40 | % | Annual | |
| Italy | 43.00 | 2018-12 | 43 | 51 | 43 | % | Annual | |
| Papua New Guinea | 42.00 | 2018-12 | 42 | 47 | 42 | % | Annual | |
| Euro zone | 41.50 | 2018-12 | 42.4 | 49 | 38.8 | % | Annual | |
| Guinea | 40.00 | 2018-12 | 40 | 40 | 40 | % | Annual | |
| Mauritania | 40.00 | 2018-12 | 40 | 40 | 33 | % | Annual | |
| Republic of the Congo | 40.00 | 2018-12 | 40 | 50 | 40 | % | Annual | |
| Senegal | 40.00 | 2018-12 | 40 | 50 | 40 | % | Annual | |
| South Korea | 40.00 | 2018-12 | 40 | 40 | 35 | % | Annual | |
| Switzerland | 40.00 | 2018-12 | 40 | 40.4 | 40 | % | Annual | |
| Uganda | 40.00 | 2018-12 | 40 | 40 | 30 | % | Annual | |
| European Union | 38.60 | 2018-12 | 39.2 | 47 | 38 | % | Annual | |
| Norway | 38.52 | 2018-12 | 38.52 | 47.5 | 38.52 | % | Annual | |
| Morocco | 38.00 | 2018-12 | 38 | 44 | 38 | % | Annual | |
| Suriname | 38.00 | 2018-12 | 38 | 38 | 38 | % | Annual | |
| Zambia | 37.50 | 2018-12 | 37.5 | 37.5 | 35 | % | Annual | |
| Namibia | 37.00 | 2018-12 | 37 | 37 | 37 | % | Annual | |
| United States | 37.00 | 2018-12 | 39.6 | 39.6 | 35 | % | Annual | |
| Armenia | 36.00 | 2018-12 | 36 | 36 | 20 | % | Annual | |
| Croatia | 36.00 | 2018-12 | 36 | 56.1 | 36 | % | Annual | |
| Uruguay | 36.00 | 2018-12 | 36 | 36 | 0 | % | Annual | |
| India | 35.54 | 2018-12 | 35.54 | 35.54 | 30 | % | Annual | |
| Algeria | 35.00 | 2018-12 | 35 | 35 | 35 | % | Annual | |
| Argentina | 35.00 | 2018-12 | 35 | 35 | 35 | % | Annual | |
| Cameroon | 35.00 | 2018-12 | 35 | 35 | 35 | % | Annual | |
| Chile | 35.00 | 2018-12 | 35 | 40 | 35 | % | Annual | |
| Cyprus | 35.00 | 2018-12 | 35 | 40 | 30 | % | Annual | |
| Ecuador | 35.00 | 2018-12 | 35 | 35 | 25 | % | Annual | |
| Equatorial Guinea | 35.00 | 2018-12 | 35 | 35 | 35 | % | Annual | |
| Ethiopia | 35.00 | 2018-12 | 35 | 35 | 35 | % | Annual | |
| Gabon | 35.00 | 2018-12 | 35 | 50 | 35 | % | Annual | |
| Malta | 35.00 | 2018-12 | 35 | 35 | 35 | % | Annual | |
| Mexico | 35.00 | 2018-12 | 35 | 35 | 28 | % | Annual | |
| Philippines | 35.00 | 2018-12 | 32 | 35 | 32 | % | Annual | |
| Sierra Leone | 35.00 | 2018-12 | 35 | 35 | 30 | % | Annual | |
| Thailand | 35.00 | 2018-12 | 35 | 37 | 35 | % | Annual | |
| Tunisia | 35.00 | 2018-12 | 35 | 35 | 35 | % | Annual | |
| Türkiye | 35.00 | 2018-12 | 35 | 40 | 35 | % | Annual | |
| Vietnam | 35.00 | 2018-12 | 35 | 40 | 35 | % | Annual | |
| Venezuela | 34.00 | 2018-12 | 34 | 34 | 34 | % | Annual | |
| Barbados | 33.50 | 2018-12 | 33.5 | 35 | 33.5 | % | Annual | |
| Canada | 33.00 | 2018-12 | 33 | 33 | 29 | % | Annual | |
| Colombia | 33.00 | 2018-12 | 33 | 38.5 | 33 | % | Annual | |
| New Zealand | 33.00 | 2018-12 | 33 | 39 | 33 | % | Annual | |
| Puerto Rico | 33.00 | 2018-12 | 33 | 33 | 33 | % | Annual | |
| Swaziland | 33.00 | 2018-12 | 33 | 33 | 33 | % | Annual | |
| Mozambique | 32.00 | 2018-12 | 32 | 32 | 32 | % | Annual | |
| Poland | 32.00 | 2018-12 | 32 | 45 | 32 | % | Annual | |
| Latvia | 31.40 | 2018-12 | 23 | 31.4 | 23 | % | Annual | |
| Bangladesh | 30.00 | 2018-12 | 30 | 30 | 25 | % | Annual | |
| Congo | 30.00 | 2018-12 | 30 | 30 | 30 | % | Annual | |
| Salvador | 30.00 | 2018-12 | 30 | 30 | 30 | % | Annual | |
| Gambia | 30.00 | 2018-12 | 30 | 35 | 30 | % | Annual | |
| Indonesia | 30.00 | 2018-12 | 30 | 35 | 30 | % | Annual | |
| Jamaica | 30.00 | 2018-12 | 30 | 35 | 25 | % | Annual | |
| Kenya | 30.00 | 2018-12 | 30 | 30 | 30 | % | Annual | |
| Lesotho | 30.00 | 2018-12 | 30 | 35 | 30 | % | Annual | |
| Malawi | 30.00 | 2018-12 | 30 | 30 | 30 | % | Annual | |
| Nicaragua | 30.00 | 2018-12 | 30 | 30 | 30 | % | Annual | |
| Peru | 30.00 | 2018-12 | 30 | 30 | 30 | % | Annual | |
| Rwanda | 30.00 | 2018-12 | 30 | 30 | 30 | % | Annual | |
| Tanzania | 30.00 | 2018-12 | 30 | 30 | 30 | % | Annual | |
| Malaysia | 28.00 | 2018-12 | 28 | 28 | 25 | % | Annual | |
| Brazil | 27.50 | 2018-12 | 27.5 | 27.5 | 27.5 | % | Annual | |
| Samoa | 27.00 | 2018-12 | 27 | 27 | 27 | % | Annual | |
| Azerbaijan | 25.00 | 2018-12 | 25 | 35 | 25 | % | Annual | |
| Botswana | 25.00 | 2018-12 | 25 | 25 | 25 | % | Annual | |
| Dominican Republic | 25.00 | 2018-12 | 25 | 30 | 25 | % | Annual | |
| Ghana | 25.00 | 2018-12 | 25 | 25 | 25 | % | Annual | |
| Honduras | 25.00 | 2018-12 | 25 | 25 | 25 | % | Annual | |
| Myanmar | 25.00 | 2018-12 | 25 | 25 | 20 | % | Annual | |
| Panama | 25.00 | 2018-12 | 25 | 33 | 25 | % | Annual | |
| Slovakia | 25.00 | 2018-12 | 25 | 42 | 19 | % | Annual | |
| Trinidad and Tobago | 25.00 | 2018-12 | 25 | 25 | 25 | % | Annual | |
| Laos | 24.00 | 2018-12 | 24 | 28 | 24 | % | Annual | |
| Liechtenstein | 24.00 | 2018-02 | 24 | 24 | 17.01 | % | Annual | |
| Nigeria | 24.00 | 2018-12 | 24 | 24 | 24 | % | Annual | |
| Albania | 23.00 | 2018-12 | 23 | 25 | 10 | % | Annual | |
| Uzbekistan | 23.00 | 2018-12 | 23 | 29 | 22 | % | Annual | |
| Egypt | 22.50 | 2018-12 | 22.5 | 34 | 20 | % | Annual | |
| Czech Republic | 22.00 | 2018-12 | 22 | 43 | 15 | % | Annual | |
| Singapore | 22.00 | 2018-12 | 22 | 22 | 20 | % | Annual | |
| Syria | 22.00 | 2018-12 | 22 | 22 | 20 | % | Annual | |
| Afghanistan | 20.00 | 2018-12 | 20 | 20 | 20 | % | Annual | |
| Cambodia | 20.00 | 2018-12 | 20 | 20 | 20 | % | Annual | |
| Estonia | 20.00 | 2018-12 | 20 | 26 | 20 | % | Annual | |
| Fiji | 20.00 | 2018-12 | 20 | 31 | 20 | % | Annual | |
| Georgia | 20.00 | 2018-12 | 20 | 25 | 12 | % | Annual | |
| Isle Of Man | 20.00 | 2018-12 | 20 | 20 | 18 | % | Annual | |
| Jordan | 20.00 | 2018-12 | 20 | 25 | 14 | % | Annual | |
| Lebanon | 20.00 | 2018-12 | 20 | 20 | 20 | % | Annual | |
| Madagascar | 20.00 | 2018-12 | 20 | 30 | 20 | % | Annual | |
| Pakistan | 20.00 | 2018-12 | 20 | 30 | 20 | % | Annual | |
| Moldova | 18.00 | 2018-12 | 18 | 20 | 18 | % | Annual | |
| Ukraine | 18.00 | 2018-12 | 18 | 20 | 13 | % | Annual | |
| Angola | 17.00 | 2018-12 | 17 | 17 | 15 | % | Annual | |
| Sri Lanka | 16.00 | 2018-12 | 16 | 35 | 15 | % | Annual | |
| Costa Rica | 15.00 | 2018-12 | 15 | 15 | 15 | % | Annual | |
| Hong Kong | 15.00 | 2018-12 | 15 | 16 | 15 | % | Annual | |
| Hungary | 15.00 | 2018-12 | 15 | 44 | 15 | % | Annual | |
| Iraq | 15.00 | 2018-12 | 15 | 15 | 15 | % | Annual | |
| Lithuania | 15.00 | 2018-12 | 15 | 33 | 15 | % | Annual | |
| Mauritius | 15.00 | 2018-12 | 15 | 30 | 15 | % | Annual | |
| Serbia | 15.00 | 2018-12 | 15 | 15 | 10 | % | Annual | |
| Seychelles | 15.00 | 2018-12 | 15 | 15 | 15 | % | Annual | |
| Sudan | 15.00 | 2018-12 | 15 | 20 | 15 | % | Annual | |
| Yemen | 15.00 | 2018-12 | 15 | 20 | 15 | % | Annual | |
| Belarus | 13.00 | 2018-12 | 13 | 30 | 12 | % | Annual | |
| Bolivia | 13.00 | 2018-12 | 13 | 13 | 13 | % | Annual | |
| Russia | 13.00 | 2018-12 | 13 | 13 | 13 | % | Annual | |
| Tajikistan | 13.00 | 2018-12 | 13 | 13 | 13 | % | Annual | |
| Macau | 12.00 | 2018-12 | 12 | 12 | 12 | % | Annual | |
| Bosnia and Herzegovina | 10.00 | 2018-12 | 10 | 10 | 5 | % | Annual | |
| Bulgaria | 10.00 | 2018-12 | 10 | 50 | 10 | % | Annual | |
| Kazakhstan | 10.00 | 2018-12 | 10 | 20 | 10 | % | Annual | |
| Kosovo | 10.00 | 2018-12 | 10 | 10 | 10 | % | Annual | |
| Libya | 10.00 | 2018-12 | 10 | 15 | 10 | % | Annual | |
| Macedonia | 10.00 | 2018-12 | 10 | 24 | 10 | % | Annual | |
| Mongolia | 10.00 | 2018-12 | 10 | 10 | 10 | % | Annual | |
| Romania | 10.00 | 2018-12 | 16 | 48 | 10 | % | Annual | |
| Montenegro | 9.00 | 2018-12 | 9 | 9 | 9 | % | Annual | |
| Guatemala | 7.00 | 2018-12 | 7 | 31 | 7 | % | Annual | |
| Bahamas | 0.00 | 2018-12 | 0 | 0 | 0 | % | Annual | |
| Bahrain | 0.00 | 2018-12 | 0 | 0 | 0 | % | Annual | |
| Bermuda | 0.00 | 2018-12 | 0 | 0 | 0 | % | Annual | |
| Brunei | 0.00 | 2018-12 | 0 | 0 | 0 | % | Annual | |
| Cayman islands | 0.00 | 2018-12 | 0 | 0 | 0 | % | Annual | |
| Kuwait | 0.00 | 2018-12 | 0 | 0 | 0 | % | Annual | |
| Oman | 0.00 | 2018-12 | 0 | 0 | 0 | % | Annual | |
| Qatar | 0.00 | 2018-12 | 0 | 0 | 0 | % | Annual | |
| Saudi Arabia | 0.00 | 2018-12 | 0 | 0 | 0 | % | Annual | |
| United Arab Emirates | 0.00 | 2018-12 | 0 | 0 | 0 | % | Annual |
Income tax is the main type of direct tax payments. It is charged to both legal entities and individuals. Calculated as a percentage of a person's annual income.
In many countries, income tax is levied exclusively on individuals, that is, people who are employed and not self-employed or shareholders of companies. In such states, legal entities annually pay income tax, which is also calculated as a percentage of the annual profit of the enterprise or organization.
In economics, it is believed that high tax rates in a state reduce the country's competitiveness compared to other states.
Countries with the lowest income taxes for legal entities
| Place in the tax ranking | The name of the country | Tax rates (% of total enterprise income) |
| 1 | Macedonia | 7,4 |
| 2 | Qatar | 11,3 |
| 3 | Kuwait | 12,8 |
| 4 | Bahrain | 13,5 |
| 5 | Lesotho | 13,6 |
| 6 | Saudi Arabia | 14,5 |
| 7 | Zambia | 14,8 |
| 8 | United Arab Emirates | 14,8 |
| 9 | Georgia | 16,4 |
| 10 | Singapore | 18,4 |
| 11 | Croatia | 18,8 |
| 12 | Luxembourg | 20,2 |
| 13 | Armenia | 20,4 |
| 14 | Namibia | 20,7 |
| 15 | Cambodia | 21 |
| 16 | Canada | 21 |
| 17 | Montenegro | 22,3 |
| 18 | Hong Kong | 22,8 |
| 19 | Oman | 23 |
| 20 | Cyprus | 23,2 |
| 21 | Bosnia and Herzegovina | 23,3 |
| 22 | Mongolia | 24,4 |
| 23 | Mauritius | 24,5 |
| 24 | Botswana | 25,3 |
| 25 | Laos | 25,8 |
| 26 | Ireland | 25,9 |
| 27 | Denmark | 26 |
| 28 | Thailand | 26,9 |
| 29 | Bulgaria | 27 |
You can familiarize yourself with the new amendments to the tax code by watching the video below.
The lowest income taxes in different countries of the world for individuals
| Place in the ranking | The name of the country | Income tax rate (in %) |
| 1 | Albania | 10 |
| 2 | Bosnia and Herzegovina | 10 |
| 3 | Bulgaria | 10 |
| 4 | Kazakhstan | 10 |
| 5 | Belarus | 12 |
| 6 | Macau | 12 |
| 7 | Russia | 13 |
| 8 | Jordan | 14 |
| 9 | Costa Rica | 15 |
| 10 | Hong Kong | 15 |
| 11 | Lithuania | 15 |
| 12 | Mauritius | 15 |
| 13 | Serbia | 15 |
| 14 | Sudan | 15 |
| 15 | Yemen | 15 |
| 16 | Hungary | 16 |
| 17 | Romania | 16 |
| 18 | Angola | 17 |
| 19 | Ukraine | 18 |
| 20 | Montenegro | 19 |
| 21 | Slovakia | 19 |
You can find out about the strangest taxes in the world by watching the video.
Table of countries with the highest taxes
Countries with the highest taxes in the world
| Place in the ranking | State name | Total tax rate (in%) |
| 1 | Argentina | 137,3 |
| 2 | Bolivia | 83,7 |
| 3 | Tajikistan | 80,9 |
| 4 | Colombia | 75,4 |
| 5 | Algeria | 72,7 |
| 6 | Mauritania | 71,3 |
| 7 | Brazil | 69 |
| 8 | Guinea | 68,3 |
| 9 | France | 66,6 |
| 10 | Nicaragua | 65,8 |
| 11 | Venezuela | 65,5 |
| 12 | Italy | 65,4 |
| 13 | China | 64,6 |
| 14 | Chad | 63,5 |
| 15 | Gambia | 63,3 |
| 16 | Benin | 63,3 |
| 17 | Tunisia | 62,4 |
| 18 | India | 61,7 |
| 19 | Spain | 58,2 |
| 20 | Costa Rica | 58 |
| 21 | Belgium | 57,8 |
| 22 | Sri Lanka | 55,6 |
| 23 | Ukraine | 52,9 |
| 24 | Austria | 52 |
| 25 | Ivory Coast | 51,9 |
| 26 | Mexico | 51,8 |
| 27 | Japan | 51,3 |
List of countries with the highest income taxes:
- Aruba. The tax rate is 58.95%. This rate includes social tax, which, in turn, includes:
- Pension contribution. Paid by both the employer and the worker. The employee is required to contribute 4%, and the employer pays 9.5%.
- Insurance fee. It is also paid by the employer in the amount of 8.9% and by employees in the amount of 2.6%.
- . The income tax rate is 56.6%, of which 7% is social contribution.
- Denmark. The rate is 55.4%. Until 2008, Denmark had an income tax rate of 62.3%, but the government decided to reduce the tax. It is almost impossible to evade tax payments in the country. Even the church is subject to taxes, which contributes up to 1.5% of income.
- Netherlands. The income tax rate is 52% (previously this tax reached 72%). In addition to the income tax payment, citizens of the country are required to pay a land use tax of 6% and an inheritance tax of 40%.
- Belgium. Tax rates:
- Income - 50%.
- Social contribution - 13%.
- Municipal - 11%.
- Austria and Japan. The income tax rate in these countries is 50%.
- . Previously, the fixed rate was 53.5%, but in 2004, by decision of the government, taxation of individuals was reduced to 49.2%.
- Ireland is one of the countries with the highest income tax rate, which is 48%. Let us remember that this rate is much higher than the average income tax throughout the northern part of Europe, which is currently 40%.
- Great Britain. In 2010, the government of the country decided to increase the rate of income tax payment by 10% (in 2010, the rate taking into account the increase was 50%). But the increase did not justify itself, and since 2013 it has been 45%, that is, it has become 5% lower.
Income tax in different countries
This type of tax payment is calculated differently in different countries.
There are states with a single fixed rate, and there are also those where the amount of funds deducted directly depends on the citizen’s annual income.
Income taxes in countries with a fixed rate:
- Belarus - 13%.
- - 10 %.
- Latvia - 25%.
- Lithuania - 15%.
- Estonia – 20%.
- Russia - 13%.
Taxes in different countries of the world with a “floating” tax rate depending on the citizen’s annual income:
Income tax rates in different countries
| A country | Income tax amount (in%) |
| 56,50 | |
| Zimbabwe | 45,00 |
| 50,30 | |
| 50,00 | |
| Slovenia | 50,00 |
| Ireland | 48,00 |
| Greece | 46,00 |
| Republic of the Congo | 45,00 |
| Luxembourg | 43,60 |
| Papua New Guinea | 42,00 |
| South Africa | 40,00 |
| Chile | 40,00 |
| Guinea | 40,00 |
| Senegal | 40,00 |
| 40,00 | |
| Taiwan | 40,00 |
| Uganda | 40,00 |
| 39,60 | |
| Norway | 40,00 |
| Morocco | 38,00 |
| South Korea | 38,00 |
| Suriname | 38,00 |
| Namibia | 37,00 |
| Algeria | 35,00 |
| Argentina | 35,00 |
| Barbados | 35,00 |
| Cameroon | 35,00 |
| Cyprus | 35,00 |
| Ecuador | 35,00 |
| Equatorial Guinea | 35,00 |
| Ethiopia | 35,00 |
| Gabon | 35,00 |
| Malta | 35,00 |
| Thailand | 35,00 |
| Tunisia | 35,00 |
| 35,00 | |
| Vietnam | 35,00 |
| Zambia | 35,00 |
| Venezuela | 34,00 |
| India | 33,99 |
| Colombia | 33,00 |
| Mauritania | 33,00 |
| New Zealand | 33,00 |
| Puerto Rico | 33,00 |
| Swaziland | 33,00 |
| Mozambique | 32,00 |
| Philippines | 32,00 |
| 32,00 | |
| Congo | 30,00 |
| Salvador | 30,00 |
| Indonesia | 30,00 |
| Kenya | 30,00 |
| Lesotho | 35,00 |
| Malawi | 30,00 |
| Mexico | 30,00 |
| Nicaragua | 30,00 |
| Peru | 30,00 |
| Rwanda | 30,00 |
| Sierra Leone | 30,00 |
| Tanzania | 30,00 |
| Brazil | 27,50 |
| Samoa | 27,00 |
| 25,00 | |
| Malaysia | 26,00 |
| Azerbaijan | 25,00 |
| Bangladesh | 25,00 |
| Dominican Republic | 25,00 |
| Egypt | 25,00 |
| Ghana | 25,00 |
| Honduras | 25,00 |
| Jamaica | 25,00 |
| Panama | 25,00 |
| Trinidad and Tobago | 25,00 |
| Laos | 24,00 |
| Nigeria | 24,00 |
| Sri Lanka | 24,00 |
| Albania | 10,00 |
| Czech Republic | 22,00 |
| Syria | 22,00 |
| Uzbekistan | 22,00 |
| Estonia | 21,00 |
| Liechtenstein | 21,00 |
| Afghanistan | 20,00 |
| Cambodia | 20,00 |
| Fiji | 20,00 |
| Georgia | 20,00 |
| Isle Of Man | 20,00 |
| Lebanon | 20,00 |
| Madagascar | 20,00 |
| Myanmar | 20,00 |
| Pakistan | 20,00 |
| Singapore | 20,00 |
| Moldova | 18,00 |
| Angola | 17,00 |
| 17,00 | |
| Romania | 16,00 |
| Costa Rica | 15,00 |
| Hungary | 16,00 |
| Iraq | 15,00 |
| Serbia | 15,00 |
| Seychelles | 15,00 |
| Sudan | 15,00 |
| Yemen | 15,00 |
| Jordan | 14,00 |
| Bolivia | 13,00 |
| Tajikistan | 13,00 |
| Macau | 12,00 |
| 10,00 | |
| Kosovo | 10,00 |
| Libya | 10,00 |
| Mongolia | 10,00 |
| Guatemala | 31,00 |
In most developed countries, a significant portion of budget revenues is generated from tax revenues. A direct increase in the tax burden is increasingly used as the main tool for obtaining additional funds. Instead, authorities in many countries are trying to optimize tax systems through reforms. Both international corporations and owners of large fortunes who seek to hide their income in tax havens are concerned about their “optimization.” According to various estimates, they hide capital amounting to several tens of trillions of dollars. At the same time, draft dodgers are attracted not only by the Caribbean islands and dwarf states of Europe, but also by such large economies as the United States. In recent years, states have intensified the fight against income hiding at the national and international level. Semi-legal tax evasion schemes actively used by international corporations have come under close attention.
Compiled by: Olga Shkurenko
Artist: Vera Zhegalina
Taxation according to the Brazilian system
Average global tax rates have not changed significantly over the past year. The country with the most bureaucratic system remains Brazil, where companies spend a record 2,600 hours a year paying taxes.
As KPMG experts note, last year the authorities of most countries, trying to increase the flow of funds into the budget in the face of slowing global economic growth, avoided directly raising rates. Other methods were used more often - expanding the tax base, limiting the number of tax deductions and other benefits. The average global income tax rate for the year increased by only 0.41% to 31.53%. An increase in rates was recorded in seven countries, a decrease in eight. The leadership in taxation of personal income continues to be held by the Caribbean island of Aruba. The most significant reduction was demonstrated by Spain, which dropped out of the top 5 countries with the highest taxes. In 2015, as a result of tax reform, the maximum income tax rate (for citizens with high incomes) was reduced from 52% to 47%. However, at the same time, the lower income limit at which the maximum rate begins to apply was significantly lowered - from €300 thousand to €60 thousand.
Over 160 countries have already introduced VAT. In most of them, rates are set at the optimal level of 15% - 20%. Set it higher and there is a risk of the business going into the shadows; set it lower and revenues to the budget will be insufficient.
The change in the global average corporate tax rate from 23.64% in 2014 to 23.68% in 2015 is also quite conditional. The UAE is still in the lead with a rate of 55%. It is noteworthy that it applies only to oil and gas producing companies. Among the 15 countries that changed corporate tax rates, the majority (11) reduced them. Changes in indirect taxes (VAT and similar) at the federal level in 2015 were recorded in only four countries. The global average rate remains at 15.79%. Tim Gillies from KPMG announces the global expansion of VAT - it has already been introduced in over 160 countries around the world. In most of them, rates are set at the optimal level, according to experts, of 15% - 20%. Set it higher and there is a risk of the business going into the shadows; set it lower and revenues to the budget will be insufficient. The most striking exception to this global trend remains the United States, where VAT still does not apply. Most states charge a sales tax instead.
According to PWC estimates, the global average tax burden on a business (the totality of all taxes paid) reaches 40.8% of its profit. On average, companies make 25.6 payments per year, spending 261 hours on it. All three indicators decreased slightly over the year. If we take individual economies, the change in the total load was multidirectional - in 46 countries it increased, and in 41 it decreased. Regionally, it is still easiest for companies to pay taxes in the Middle East, while it is more difficult in South America.
Ideal reforms
States are actively reforming tax systems, trying to find a middle ground between filling the budget and developing private entrepreneurship.
Tax revenues provide a significant portion of government revenue. For example, in OECD countries the share of taxes in GDP exceeds 30%. At the same time, as experts from the Heritage Foundation (HF) note, too high a tax burden negatively affects business activity and forces taxpayers to look for ways to evade taxes. Fiscal freedom is one of the criteria for the overall level of economic freedom, the situation of which is being clarified by HF in different countries of the world. According to the fund, things are best in the Middle East (Qatar, Bahrain, Saudi Arabia), worse in the countries of Northern Europe (Denmark, Belgium, Sweden), where the tax burden is quite high. The most significant decline in fiscal freedom in recent years has been recorded in Zimbabwe (see table).
According to PWC, over ten years of observation (from 2004 to 2014), about 400 different tax reforms were introduced in 149 of the 189 jurisdictions the company studied. Of these, 40 were in 2014. As a result, the average global tax burden on businesses during this period decreased by 11.4 percentage points, the average number of payments by 8.2, and the time to pay taxes by 61 hours. The most reformed regions were Eastern Europe and Central Asia. The most significant reduction in the tax burden in 2004–2014 (by 22.5 percentage points) was recorded in African countries, although this pressure in the region is still heavy and further improvements are required.
Reform of tax systems is proceeding along two main paths - reducing the tax burden and simplifying tax payment. In the second case, a significant part of the changes in recent years is associated with the transition to electronic document management. Thus, 84 countries have already completely switched to filing returns and paying taxes online, which speeds up the process, increases its transparency and reduces the likelihood of errors.
Governments often forget about other measures that can increase budget revenues without raising rates or introducing new taxes. We are talking about improving the collection of existing taxes and reducing the costs of administering the process itself. By the way, according to data for 2013, the ratio of tax debt to the total volume of taxes collected in OECD countries is estimated at an average of 24.2%. In two countries (Italy and Greece), tax arrears exceed the amounts collected. In terms of administration, in OECD countries tax collection costs range from 0.4% to 1.7% of total tax revenue for the year.
Where is it good for capital to live?
There are about fifty offshore jurisdictions in the world. At the same time, not all the money is hidden in the Caribbean islands - the world's leading economies often look more attractive.
Offshores are usually called territories that attract foreign capital with preferential tax treatment and secrecy of financial transactions. There is no generally accepted set of such tax havens. The original OECD list included 47 jurisdictions. The list of offshore zones approved in 2007 by the Ministry of Finance of the Russian Federation included 42 positions (later Malta and Cyprus were excluded). In 2015, the European Commission published a blacklist that included 30 territories. That same year, the US Congressional Research Service published a consolidated list of 50 jurisdictions based on data from authorities and research organizations from various countries. Moreover, most of the positions in all these lists overlap. The centers of gravity in which offshore capital is concentrated are the Caribbean and Europe.
Many of these offshore jurisdictions were also included in the Tax Justice Network's (TJN) Financial Secrecy Index. Its experts note that a whole industry has formed in the world, uniting the largest banks, legal and auditing companies that help large capitals hide from taxes. By determining the share of different countries in this global market, TJN comes to the conclusion that the idea of offshore companies as distant islands with palm trees is not always true. The top 15 countries in terms of financial secrecy included such large developed economies as the USA, Germany, and the UK. The latter ranked 15th, but would have been first if its overseas territories were not counted separately.
The United States is attracting increasingly close attention from experts. The country took third place in the financial secrecy index, ahead of even the Caymans, the famous offshore center. In recent years, the United States has been actively fighting against its tax evaders, forcing the Swiss banks that help them to pay millions in fines and requiring foreign financial organizations to report under the American tax law FATCA. At the same time, the United States is in no hurry to join the new strict standards for the automatic exchange of tax information CRS developed by the OECD. Thanks to this position, the United States has become a much more reliable place for hiding legally earned capital from taxes than Switzerland. As Bloomberg recently noted, everyone from London lawyers to Swiss trusts have begun moving money from their wealthy clients from the Bahamas and Virgin Islands to Nevada, Wyoming, and South Dakota. Managing Director of Rothschild & Co. Andrew Penny recently stated that the US has "essentially become the world's largest tax haven."
Optimized corporations
Large businesses willingly “optimize” their tax burden with the help of offshore companies. Among the draft dodgers are world-famous companies.
According to a study by Citizens for Tax Justice and U.S. PIRG, 358 of the largest American companies from the Fortune 500 list at the end of 2014 registered a total of more than 7.6 thousand “subsidiaries” in offshore jurisdictions. They hold more than $2.1 trillion in accumulated profits while avoiding U.S. taxes. At the same time, 65% of offshore capital ($1.4 trillion) falls on 30 companies from this list. Experts estimate that the average corporate tax rate paid by American corporations abroad is 6%. By withdrawing money from the United States, they actually owed the state about $620 billion.
In particular, Apple is called the largest violator - the corporation holds a record $181.1 billion offshore. If these profits were registered in the United States, Apple would pay $59.2 billion in taxes on them. American Express withdrew $9.7 billion offshore, from which it could have given $3 billion to the United States. Abroad, it paid taxes at an average rate of 4%. Nike, with $8.3 billion in profits settled offshore, would have paid taxes of $2.7 billion, and the average rate abroad was only 2.5%. One of the favorite optimization methods for a sporting goods manufacturer is to transfer the rights to its trademarks to its subsidiaries in Bermuda, to which the head office then pays royalties. In the constellation of companies with a large number of offshore subsidiaries (more than 100), giants such as PepsiCo, Pfizer, and Morgan Stanley shine. Experts are calling for combating evasion by tightening legislation, in particular, forcing corporations to pay taxes on foreign income in the United States.
In Europe, this problem was actively addressed in 2014 after the Lux Leaks scandal, when journalists found out that international corporations were massively using tax evasion schemes in Luxembourg. According to the European Parliament, the actions of evasion companies cost EU countries €70 billion a year. A number of relevant legislative measures are currently being discussed in the European Union. Thus, large companies may be required to publish data on income and taxes. The European Commission has recently initiated a number of tax investigations. And it found, in particular, that Luxembourg provided unjustified tax preferences to the auto giant Fiat, and the Netherlands to the coffee chain Starbucks. Each company was ordered to pay an additional €20–30 million. It also turned out that 35 corporations used illegal tax schemes in Belgium, underpaying €700 million to the treasuries of their states. Investigations are underway against Apple, Amazon, and McDonald’s. Google may also come under the radar of EU authorities. The Internet giant has already agreed to voluntarily pay an additional £130 million at the request of the British tax authorities; Italy and France also have claims against the company.
In October 2014, investigations began into online retailer Amazon, which records most of its European profits through a subsidiary in Luxembourg. The European Commission suspects that a tax agreement concluded in 2003 with the authorities of Luxembourg allowed the company to reduce the amount of taxable income. No decision has been made yet
In October 2015, the European Commission announced the results of an investigation that found that the Starbucks coffee chain received illegal tax benefits in the Netherlands. It turned out that when calculating its profit, it was not market prices that were taken into account, but internal - so-called transfer - prices, which “have no relation to the situation on the market.” Most of the profits of the Dutch company were transferred to foreign divisions, where they were also not subject to taxes. The European Commission ordered the collection of unpaid taxes in the amount of €20–30 million to the Dutch budget
At the same time, in October 2015, the European Commission made a similar decision regarding the taxation of Fiat's financial division in Luxembourg. The automaker also applied transfer prices and paid taxes on unreported profits. He was ordered to pay an additional amount of €20–30 ml to the Luxembourg budget
In December 2015, an investigation began into the division of the American corporation McDonald's in Luxembourg, which collects license fees in Europe and Russia. The European Commission suspects that the fast food chain used a scheme that allowed it to avoid paying taxes on this income in either Luxembourg or the United States. Investigation continues
In January 2016, the European Commission found that 35 corporations received tax benefits in Belgium that were contrary to EU law. The names of the companies were not disclosed, however, according to media reports, among them are Anheuser-Busch InBev, BP, BASF, Pfizer. They took advantage of a scheme that allowed multinational companies to reduce their tax base by 50% to 90% by excluding so-called “excess profits”, which were treated as part of the profits of the entire group, rather than the Belgian division. The European Commission ordered the Belgian authorities to recover unpaid taxes from violators totaling €700 million.
Tax rates in the world are practically not growing, and, despite the worldwide struggle for “fiscal optimization,” there are many places where they are equal to zero.
According to KPMG, in 2006-2013 the average corporate tax rate in the world decreased from 27.5% to 24.08%. The decline was observed in all geographic regions: the largest in Asia (from 28.99% to 22.49%), the smallest in South America (from 29.07% to 27.61%). The record holder in easing the tax burden was Kuwait, which in 2008 switched from a regime with a maximum rate of 55% to a flat 15% scale.
Over the same period, the average global rate of all types of indirect taxes increased slightly (from 15.69% to 15.77%). In Africa, Asia, Europe and Oceania, the indicator increased (ranging from 0.59 to 1.67 percentage points), while in North and South America it decreased (by 2 and 1.59 percentage points, respectively). The most significant increase in rates was shown in Hungary (from 20% to 27%) and Sudan (from 10% to 17%), the largest drop was in Kazakhstan and Sri Lanka (from 15% to 12%).
The average income tax rate for individuals in the world over seven years decreased by 1.24 percentage points (from 32.68% to 31.44%). In Africa, North and South America it became higher (in the range from 0.04 to 2.3 p.p.), in Asia, Europe and Oceania it became smaller (in the range from 0.69 to 2.75 p.p. ). Hungary distinguished itself by reducing its income tax from 36% to 16%. Uruguay, on the other hand, has replaced the zero rate with a progressive scale with a maximum level of 30%.
There are five tax jurisdictions in the world that do not impose either corporate or indirect taxes—the Bahamas, Bahrain, Bermuda, Guernsey and the Cayman Islands. The only country where officially there are no taxes at all is the DPRK.
In terms of the total level of taxation, Gambia is the absolute world leader. A conditional company in this country in the second year of operation must on average pay 283.5% of commercial profits in the form of taxes and mandatory contributions. The most bureaucratic tax administration system is in Brazil. Preparing and submitting reports and making related payments require 2,600 hours per year, that is, more than 108 days, or 325 working days.
Lowest corporate tax rates
|
Source: KPMG
Jurisdictions with zero corporate tax rate
Lowest indirect tax rates*
|
Source: KPMG
Maximum effective rates are indicated.
Jurisdictions with a zero indirect tax rate*
|
*Universal indirect taxes - VAT, sales tax, turnover tax, etc., administered by the central government.
Lowest income tax rates
|
Source: KPMG
Maximum rates indicated.
Lowest average tax level
|
Sources: PricewaterhouseCoopers, World Bank.
The indicator is calculated using the methodology of the Doing Business report.
Least time-consuming tax system
|
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