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Top 10 Low Income Tax Countries

As a UK, Eurozone or US resident you are unlikely to see your personal tax rate decrease materially unless you head into lower income brackets.

The best bet then for cutting your personal tax burden is relocation, particularly if you are fortunate enough to occupy an upper tier income bracket.

Immigration, relocation and 'tax efficiency' specialists Bradley Hackford have published their 2014 rankings of the 10 top destinations to establish a physical and tax residence.

These countries impose neutral or low tax rates on individuals.

The rankings are established based on 5 criteria:

  • The rate of tax for individuals residing in the country
  • The nation's quality of life
  • Legal and physical security of destination country
  • The quality of the economic investment program developed by the local government to encourage new residents in the country to invest.
  • Document processing speed is also taken into account in this criterion.
  • The country's geographical location, its accessibility, and its recreational opportunities

10: Switzerland: Lump Sum Taxation

Switzerland remains an attractive country for its quality of life and its central geographic position, as well as for its excellent infrastructure.

Swiss taxation may be attractive, especially when opting for the Lump Sum Taxation. Although the latter may one day disappear, currently it is still in place and allows for the benefit of a predictable tax, since it is a flat rate, without having to disclose the amount of annual revenue.

Note that for people with international operations, neighbouring Liechtenstein is also interesting with a tax rate of 12.5% on companies and a maximum of 24% on individuals.

Personal income tax rate: Flat rate, the flat rate amount is currently negotiating between 150,000 and 200,000 Swiss Francs on average.

cayman islands tax

9: The Cayman Islands

The Caymans are a well-known destination with a 0% tax rate for corporations and individuals.

The Caymans have set up a special economic zone allowing active people to obtain residency fairly easily, by forming a company in this area.

Personal income tax rate: 0%

 guernsey income tax rate

8: Guernsey

Guernsey, located close to the United Kingdom and France, has low taxation, with a maximum of 20% on individuals and a ceiling of £110,000 to £220,000 depending on the type of income.

Local companies also enjoy a 0% tax rate, which attracts people who have international operations.

In addition, note that among the Channel Islands, Jersey is also attractive.

Personal income tax rate: 20% with a maximum tax of £110,000 to £220,000 depending on the type of income.

 uae income tax rate

7: United Arab Emirates - Dubai

The possibility of establishing a company in one Dubai's many free zones and then obtaining residency in the country allows Dubai to attract more and more expatriates.

Companies established in free zones can be 100% foreign-owned. The tax rate for corporations is 0%. The same rate applies to the incomes resident individuals, who are not subject to any tax.

Personal income tax rate: 0%

 income tax destination mauritius

6: Mauritius

The island of Mauritius, where French and English are the languages in use, is very popular with the French, who appreciate the use of French on the island and the country's low tax rates.

International investors also appreciate Mauritius because of the simple residency process and the tax benefits related to residency.

The main procedure for obtaining Mauritian residency occurs with the purchase of real estate on the island, approved by the local program called IRS, with a minimum value of $500,000 US.

Personal income tax rate: 15%

panama income tax rate

5: Panama

The various residency programmes in Panama are attractive to retirees and people with international operations. The principle of territoriality applies to taxation in Panama.

Therefore, only locally sourced income is taxed. All foreign earnings are completely exempt from taxation. A simple new process allows for residency to be obtained rather quickly, with a low investment requirement for a number of nationalities, which currently makes Panama very attractive.

Personal income tax rate: 0% on foreign sourced revenue, and 15 to 25% on locally sourced revenue.

income tax bulgaria

4: Bulgaria

There has been a significant trend to relocate to countries in Eastern Europe. For non-Europeans, it corresponds to the desire of settling in Europe.

For Europeans, the attraction comes from wanting to remain in Europe while enjoying very attractive tax rates. Bulgaria has one of the lowest tax rates in Europe.

Non-Europeans living in Bulgaria can then freely travel throughout Europe. For non-Europeans, the residency process occurs through an investment of 511,295 euros in Bulgarian state bonds. The investment must be maintained for five years. Europeans do not have to make this investment.

In addition to Bulgaria with a 10% income tax, also note the increase of Hungary (16%), Lithuania (15%), and Romania (16%).

Personal income tax rate: 10%

monaco income tax rate

3: Monaco

The Principality of Monaco, with its upscale recreational opportunities and its recognised security, attracts many residents from various countries, especially Italy, Russia, and more recently from Switzerland.

Obtaining residence requires being able to demonstrate significant financial wealth. Living in Monaco allows people to benefit from the total absence of income taxes (except for people of French nationality who continue to pay their taxes in France).

Personal income tax rate: 0%

andorra income tax rates

2: Andorra

A small principality located between France and Spain, Andorra is an ideal destination to establish residence in Europe.

Andorra attracts both French and Spanish border residents due to its very favorable taxation. It also draws non-European foreigners, particularly Russians, who appreciate the country's geographic location as well as its high level of security. Obtaining residence requires making a minimum investment of 350,000 euros in the country and making a deposit of 50,000 euros.

Personal income tax rate: 0 to 10%

bahamas personal tax rates

1: Bahamas

The country's location in the immediate vicinity of the United States, as well as its tax rate of 0% on individual income, make the Bahamas the first jurisdiction of choice for establishing physical and fiscal residence.

Moreover, the country offers an excellent quality of life and political stability that makes it completely satisfactory.

Obtaining residence requires making a local real estate investment, with a minimum value of $500,000 US (minimum value of $1,500,000 US for the accelerated process).

Personal income tax rate: 0%