5 Countries with the Highest Income Tax Rates-Read before you Migrate

Highest Income Tax Rates Around the World

Are you one of those people who are always looking for new ways to lower your tax bill? If so, you may want to think about moving to a country with a high income tax rate. Believe it or not, there are actually quite a few countries out there that charge their citizens quite a bit in taxes. In this blog post, we will take a look at 5 of the countries with the highest income tax rates. So, if you’re thinking about making a move, be sure to read on!

Here are the top countries with the highest average personal income taxes for a single person with no dependents worldwide. Let’s start our top 1 country with the highest income tax rate around the world.

Austria.

Austria
The progressive tax rate in Austria caps at 55%

 

The progressive tax rate in Austria caps at 55% and includes income from fringe benefits and employment. White-collar employees also contribute 18.07% of their income to social security, while blue-collar employees contribute 18.2%. Austria also offers automatic tax credits depending on the number of individuals in the household and additional credits for children and travel to work. Some expenses related to work and child care are also deductible.

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Austria imposes taxes on different sources of income like wages, pensions, dividends, and interest. A resident person is subject to personal income tax, including their other incomes outside Austria. These incomes include profession, employment, investments, and income from trade or business.

Denmark.

Denmark
An average Denmark citizen pays 45%

An average Denmark citizen pays 45%. This is divided into labor market contribution tax (8%), municipal tax (27.8%), healthcare tax (5%), and capital gains tax (27 or 42%). There is also a withholding tax of 27% on dividends and 25% on royalties. Income from sources like interest, real estate rental, annuities, fees, pensions, business income, fringe benefits, bonuses, and employment income are all taxable. Tax deductions are only available for limited contributions to approved Danish pensions, charitable donations, and double households.

Any individual fully tax resident in Denmark will be taxed according to the ordinary tax scheme by up to 52.06% in 2020. However, any individual not subject to a full tax is subject also up to 52.06% on income from sources within the country.

Belgium.

Belgium
Whether your income is from property, investments, or other sources- all of it is taxable!

Like many countries in Europe, Belgium has what is called ‘progressive tax,’ which means those who earn more pay more tax than those who earn less. Whether your income is from property, investments, or other sources- all of it is taxable! The capital gains tax rate depends on the type of capital. On top of that, employees also pay social security tax that amounts to 13.7% of their income. The only deductions allowed for business expenses, social contributions, and only 80% of alimony payment. Find out 9 top countries that are tax-free.

Germany.

Germany
25% withholding tax on interest and dividends and a 15% withholding tax on royalties

This is another country that imposes the progressive tax. Sources of taxable income include business ownership, savings investments, rental property, capital gains, and forestry. There is also a 25% withholding tax on interest and dividends and a 15% withholding tax on royalties. Church members who pay church tax are also tax-deductible. If your income is up to 8,652 Euros, it is not taxable and considered an allowance. Those who want to pursue a future profession can also claim u to 6,000 Euros deduction per year.

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Hungary.

HungaryHungary implements a fixed tax rate, not a progressive one, and that rate is 16%. Although this may sound like a low-income tax rate, the catch is that it applies to all income sources. Even passive income from sources like property rentals and interest is also taxable at the 16% rate. The only tax deductions Hungary offers is for business travel expense, professional training, and child-rearing. Each spouse is considered a separate taxpayer.

As for married couples with kids, the top countries are Denmark, Turkey, Finland, Netherlands, and Norway, with a tax range of 23 to 25.3%. So, where should you go if you want the lowest tax rates possible? Well, the United States is the 21st highest tax rate for married couples at 13.7%. The countries with the lowest average income tax rates for married couples with two children are Ireland (-0.3%), the Czech Republic (1.7%), and Switzerland (4.2%). Check this out the top 10 hilarious taxes around the world.

Conclusion

So before you pack your bags and head to a country with lower income taxes, be sure to do your research! Income tax rates vary drastically from country to country. Some countries have outrageous estate taxes or donor’s taxes, so make sure you know what you’re getting yourself into. As for the Philippines, our income tax is relatively simple and straightforward- so if you’re looking for a stable place to call home with low income taxes, the Philippines might just be it! Have you paid your income tax yet this year?

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