Like Americans and Europeans discussing sports, we at Nomad Capitalist just keep talking, writing, and shouting about taxes.
The word “taxation” is used in a variety of ways in different countries, and while they’re not talking about the same thing, you might say the same thing about it. Although the name is similar, it can mean very different things in different countries.
You could be paying the government half of your income or nothing at all.
One-size-fits all tax systems are not possible.
Paying more taxes than necessary, if you pay any, is an expensive mistake that is more than possible to avoid in today’s connected and globalized world.
The 4 Types of Taxable Income
Zero taxation, residential taxation, citizenship-based taxation, or territorial taxation are the four most common forms of taxation in countries around the world.
To put it another way: If you spend longer than the authorized number of days in the country, you’ll have to pay taxes on your international income.
In other circumstances, simply having a place of residence in a country makes you liable for the taxation of that country’s worldwide revenue.
Only Eritrea and the
citizenship-based taxes, which is the most punitive kind of taxation. United States employ
While citizens of these two countries can’t avoid the taxman’s demands, people who live outside of the country have the option to remove some of their overseas income from the stringent taxation of their respective countries.
It’s a good thing that there are countries that only
borders – a system known as a territorial tax system (i.e., income you have earned in Singapore is only subject to tax IN Singapore.) tax money that is generated within their
Knowing how each country’s system differs and which countries employ which system is critical.
It’s possible to maintain your nationality while working, living, and earning money in more than one country without having to pay taxes in any of them.
Tax Haven or Tax Hazard?
Most people have no idea that there are nations with low tax rates, so they just accept the system that their own country imposes on them, even if they make money online and have the majority of their customers in another country.
Others, while acknowledging the existence of “tax havens” and “hidden gems,” maintain that high tax rates are unavoidable if one wishes to enjoy a certain standard of living.
It is clear to anyone who follows me on social media or reads my writings about my travels that I am a huge fan of high-quality services.
I can vouch for the fact that even in places you wouldn’t expect it, you’ll find a great standard of living.
Taxes are not always correlated with a country’s quality of life.
Flag theory helps people decide which countries to live in, work in, and become citizens of.
People I assist on a monthly basis are encouraged to relocate to a tax-free nation where the government will not attempt to seize their hard-earned cash.
Think about where you’ll get the greatest care.
Cities in low-tax
quality of life and happiness indices can be found all over the world. countries with excellent
Nearly one-hundred and sixty nations exist beyond the Western Hemisphere. Many of these countries are highly developed.
The West’s high-tax countries don’t have a monopoly on progress, well-being, or contentment. They can, in fact, have the opposite effect.
This is why I’ve taken the liberty of labelling countries with the highest tax rates “tax risks,” as low-tax nations are commonly referred to as such. You may already be residing or planning to relocate to one of these “tax dangers,” in which case I’m here to give you some advice on where to go instead.
Here are the 15 countries with the highest tax burdens.
Yes, France is a formidable country because to its abundance of cheese, wine, and “je ne sais quoi” street feel.
According to purchasing power parity, France is the EU’s second-largest economy, despite its third-largest population in Europe and membership in the G7.
Tax rates are some of the highest in the world at 45 percent for the top marginal bracket.
A low-tax country located on the French Riviera, Monaco, has no income tax and is one of the world’s wealthiest countries.
are likely a contributing factor to the fact that nearly a third of the population is French. tax rates
Who wouldn’t want the same (or better) standard of living without the burden of tax obligations?
The Golden Visa program in Spain is one of the most appealing in Europe. Spain is a hotbed of activity, with golden beaches, tapas bars, and high-quality living all over the place.
However, this comes with a cost.
If you live in Spain for more than six months a year, you’ll become a
47% tax rate. tax resident and pay a whopping
If that’s not awful enough, Spain taxes all of your income.
That’s possible to get around it, but that just adds layers of difficulty that you don’t need. You can do things in a more efficient manner.
When it comes to customer service and the general kindness of the people, Ireland gets my vote (so much so that I decided to have our Nomad Mastermind Event in Dublin this year).
GDP per capita ranks Ireland as one of Europe’s wealthiest countries and one of the twenty-five wealthiest countries on Earth. After the 2008 global financial crisis, it was one of the best demonstrations of how growth and progress could still occur.
In addition to the hard work and innovative spirit of the Irish, companies like Google and Apple benefited from Ireland’s low corporate income tax rates. However, Irish residents are not so fortunate and must pay a marginal income tax rate of up to 40.4 percent.
Despite the fact that it does not have the highest tax rate in Europe, it is still high enough to be included on this list.
All properties, profits, and gains are subject to taxation. People who live and work in Ireland are subject to Irish income tax on all of their worldwide earnings.
Low- and middle-income earners
, whereas middle- and high-income earners pay a high rate. pay little or no income tax
During the 15th and 16th centuries, Portugal was the spot where a major chapter in world history began with the New World discoveries by Portugal’s great fleet.
Portugal played a key part in world history as they were the first worldwide empire.
It is also the only European country that had its capital, for some time, outside of Europe in Rio de Janeiro.
Today, Portugal is a developed and high-income
the world with a top marginal tax rate of 48 percent . country with the 46th largest economy in
Portugal employs taxes to increase equality between high-income earners and low-income earners in the country. Employment money earned is subject to a progressive income tax that applies to those who are in the working.
A vast number of
count as tax deductions, including a general deduction, health expenditures, life and health insurance, and education expenses. tax allowances can
For those who establish up home in Portugal via the Golden Visa program or other residence choices, it is possible to circumvent these high taxes altogether under Portugal’s non-habitual residence tax structure. But it only lasts ten years.
11. THE NETHERLANDS
In the European economy, the Netherlands has played a significant role for many centuries.
Later, it was a founder member of the EU, which would become the European Union in the future.
the 17th most populous
, according to GDP per capita. country in the world
The port of Rotterdam, Europe’s largest, is located in the Netherlands, giving it easy access to the UK and Germany’s markets.
For a lengthy period of time, Holland was one of the world’s wealthiest countries.
On any income over €66,000 for persons under the age of 65, there is a 49 percent income tax rate (income tax plus mandatory pensions, social security, and state-funded medical care contributions, all of which are a percentage of income up to a maximum) for those under the age of 65.
Slovenia, despite being one of the smallest countries in Europe, yet imposes a 50% tax on its citizens, despite its size. Slovenia is a cultural crossroads, straddling the Germanic, Latin, and Slavic worlds at the same moment.
The communist world’s most advanced state was located in this small former Yugoslav republic. Melania Trump, the first lady of the United States, was born and raised there, thus it’s currently a hot topic.
Slovenia has a population of under 2.5 million people, making it one of the EU’s tiniest members.
A top marginal tax rate of 50 percent is the highest among its fellow ex-Communist republics, making it one of the few former Communist countries to join the European Union.
To be fair to Poland and Russia, though, Slovenia has a sophisticated economy and is the richest Slavic country in nominal GDP per capita.
This small Middle Eastern country has a remarkable rate of innovation. As a country with a population of just 8.8 million, Israel is among the few non-European countries to make the top 10.
It also boasts the 13th most startup companies in the world.
It’s safe to say that Israel’s economy remained one of the most resilient in 2008, a year known as the “Great Recession.”
Israel’s GDP per capita is currently comparable to that of southern European countries, such as Spain.
There are several factors that have contributed to Israel’s high-tech boom and quick development, including its long history, strategic location, and world-class university education system.
All of this, however, comes at a cost: a 50% top marginal tax rate.
There are two major linguistic groups in this country: Flemish Dutch speakers and Walloon French speakers.
The European Union and NATO both have their headquarters in the country. The highest
in Western Europe is also found in Belgium, which has a tax rate of 53.7 percent. tax rate
Both the country’s economy and its transportation system are deeply interconnected with the rest of Europe in this highly globalized age. Location in an industrialized zone helped it rise to the 15th largest trade nation in the world.
Due to its pioneering role throughout the Industrial Revolution, Belgium has always maintained its position as a world leader.
As a result, Wallonia’s unemployment rate is now more than double that of Flanders, and the country has become more politically divided than in the last century or so.
If you’re looking for a tropical vacation, Aruba is a must-visit island.
The island is also one of the safest in the Caribbean if you exclude some petty crimes, but that certainly doesn’t excuse the country’s staggering personal income tax rate of 59% in 2022.
The personal income tax rate is expected to decline to 52% in 2023.
any better as a result? Not to us, at least. People paying more than half of their hard-earned income in taxes is a concept that we find offensive. tax rate
According to GDP per capita, Sweden ranks 20th in the world.
Life expectancy is among the greatest in the world, while the country’s income disparity is quite low.
Sweden is a mature post-industrial civilization with an advanced welfare state and the highest income tax rate in the world, with 52.9 percent of annual income eliminated.
Swedish workers pay both income tax and social security contributions (employer contributions) when they receive a salary from their jobs. This is the country’s system of taxation. Swedes pay high taxes, yet home
laws. sales are free from the country’s tax
One of the very few German-speaking
is also one of the world’s most developed. countries in the world
That privilege comes at a price, though; Austrians are
of 55%. taxed at a rate
Additionally, it has a social security tax rate of 18 percent, bonus payments are taxed at a rate of 6 percent, and capital gains taxes are 25 percent.
According to GDP per capita, Austria ranks 12th in the world and has a well-developed social market economy.
You must question yourself, “At what cost?””
In terms of quality of life, most of what you may find in Austria can be found in nations with lower tax rates.
Visit Austria, but don’t make it your permanent tax domicile.
Danish GDP per capita is 18th in the world, and its nominal GDP per capita ranks 6th.
The welfare state in Denmark is based on the idea that all residents should have equal access to the many
services that are funded by taxes..
Danish citizens are taxed at 55.9 percent of their per capita income because the country has a relatively small population.
Many consider this as a justification for its high tax rates, which also allow for greater access to social programs for the citizens of Denmark.
Perhaps this explains why the Danes are regarded as among of the world’s happiest people.
Alternatively, it could be because they promote the Hygge notion, in which a sensation or time is described as “cozy, lovely, or wonderful” when experienced by oneself or in
or out in the world. company of others in one’s house
When it comes to measuring a country’s happiness, I prefer to look at its mindset rather than its tax structure.
After the United States and China, Japan has the world’s third-largest nominal GDP. It is the world’s fourth-largest economy in terms of purchasing power parity, after the United States, China, and India.
population in the world, this is quite a feat. country with the 11th-largest
Work ethic has long been cited as a major factor in Japan’s success. Japan is the only Asian country among
of 55.97 percent, despite the fact that its capital, Tokyo, is home to the most millionaires in the world. high-tax countries with a top marginal income tax rate
In Asia, Japanese firms dominate a wide range of high-tech products and autos, so the government has a lot of money to tax.
One of the few
that can be likened to Western ones in terms of popularity around the world is also one of the few. countries that has a culture
A high-tax Nordic country, Finland, was previously known as “the country at the end of the earth.” Summer is a long time there, but “winter is constantly approaching and a long night with it,” says the narrator.
Also keep in mind that, despite having one of the world’s highest standards of living and welfare, Finns have a high prevalence of suicide and depression. This could be due to the country’s extremely high tax rates.
By virtue of its top marginal tax rate of 56.95 percent, this little country of 5.5 million inhabitants ranks 8th on this list.
The capital gains
in Finland is among the highest in the world. tax rate
According to the Tax Administration, everyone who has been in Finland for more than six months is considered a resident. And every resident’s international income is taxed in Finland, regardless of where it came from.
1. IVORY COAST
People in Ivory Coast are handing over a stunning 60% of their income to the government, and that doesn’t have to be the case.
Ivory Coast, a long-troubled country in west Africa, has the world’s highest income tax rate.
Despite the fact that this is a frontier market with a distinctive profile, we can’t think of a single reason why anyone would choose to pay their government majority of their revenue.
WHY PAY MORE?
In spite of the fact that I’d love to go out to Vienna, Paris, or Tokyo for a few days, I’d advise you to think hard about becoming a permanent resident of one of these countries, which would expose your income to high tax rates.
There are several 2022 tax brackets in most of these countries, as stated.
It’s important to note that you’ll only be paying taxes on half of the money you make above the marginal tax level. Your effective tax rate could be as low as 35% even if the top marginal tax rate is 50%.
But even putting it in writing is ridiculous.
Why spend 35% when you could pay ZERO for the same service? Furthermore, your effective tax rate may reach as high as 50% in some areas.
If you live in California, for example, your effective tax rate might be as high as 54% after factoring in state and local taxes, federal income taxes, payroll taxes, and other fees.
Because of your
bracket, of course. federal income tax
The top marginal income tax rate is obviously not the only factor to consider when making an international move. As a result, we offer comprehensive offshore planning that considers more than just your taxes, but also where you live, where you invest, where you conduct business, and more.
This list isn’t the only place you can go if you’re looking for a location that will treat you well.