Are you satisfied with the personal income tax rate you pay in your country of residence? Most people are not. The good news is that you can change the situation! You may be interested to find out that the personal income tax rate may vary from about 60% (in Scandinavian countries) to about 40% in the United States of America and zero rate in some jurisdictions. And it’s up to you to decide where you want to find yourself on this scale.
Most people would like to pay less, and this is the normal course of things. In this post, we will look at the countries that offer income tax exemption. We invite you to our portal called International Wealth to read the full article where we list all the top tax-free countries and find much more information on taxes, business, and life in different countries.
At our portal, you will find qualified specialists who will help you with tax optimization and offer absolutely legal ways of reducing the tax burden. We work with international businesses and individuals, helping them to relocate, re-domicile, find the best tax and accounting solution, obtain tax residency, and much more. Some of our services are free, so do not miss a chance!
And now let’s look at the countries that offer low income tax rates.
It is easy to guess that most of the state income comes from oil and gas production (70%), so there is no need to impose a personal income tax here. There are other taxes, though: 6.5% is payable as social contributions, and you will also have to pay a 3% stamp duty if you purchase real estate in Oman.
Though the country’s revenues are quite high, it often faces civil unrest: the locals demand to change the situation with the jobs as about half of all vacancies in Oman are occupied by foreigners. The government makes regular attempts to reconsider its employment policy to give more priority to the locals.
The Bahamas is one of the wealthiest Caribbean countries, and the lion’s share of income to the state budget is brought by tourism, offshore banking services, and import duties.
The personal income tax here equals zero – however, local workers pay 3.9% as social contributions (the amount should not exceed 31,200 US dollars). The amounts payable to the state insurance fund make up 5.9% for employees and 8.8% for the self-employed. If you own real estate on the islands, you will be liable for 1% of the respective tax.
Foreigners who do not want to pay personal income tax back home can retain their citizenship and acquire tax residence in the Bahamas (which requires them to reside in the country for at least 90 days).
Kuwait is the 6th country in the world by the estimated oil deposits, so no wonder half of its GDP comes from oil extraction.
As a result, no personal income tax is payable here. However, social contributions still need to be paid, amounting to 7.5% for the employees and 11% for the employers.
The country is one of the world’s leaders if we look at its income per capita, and still, there are a lot of dissatisfied citizens that want an increase in wages. The government agreed to give a 25% increase despite the fact that the external economic regulators bid lower economic stability as a result of this move.
The IMF gave Kuwait recommendations on introducing VAT and a transparent taxation system, but Kuwait remains true to its time-proven regulations.
This is yet another country rich in oil whose budget mainly relies on income from its extraction (70%).
You will not be liable for personal income tax here, but social security contributions will amount to 7% if you are a local and 1% if you are a foreigner. Employers pay 12% for each local worker and 3% for each foreign one.
If you possess real estate in the country, you will need to pay a 3% stamp duty.
Despite high revenues from oil export, the country’s budget still experiences a high pressure of social liabilities, which makes the government look for ways of lowering Bahrain’s dependence on raw materials.
Saudi Arabia is a leader in global oil exports, and its tax residents do not pay a personal income tax. And still, if you are a self-employed foreigner, you will have to contribute about 20% of your income to the country’s budget.
Social security contributions make up 9% for employers and 9% for employees, and you will also have to pay a capital gains tax of 20%.
The state budget is mainly replenished by revenue from oil export (75% according to OPEC estimates).
This is the only Asian jurisdiction that does not impose personal income tax! All other countries are located in the Middle East or tropical regions.
Employees pay 5% as social security contributions and 3.5% to the pension fund. If you are a non-resident, you will have to pay a withholding tax of 20% from your salary.
Oil and gas export yields the most profit here for the state budget, like in the majority of the countries mentioned above 90% of exports are made up by hydrocarbons.
However, the country is on the verge of major reforms and its oil and gas reserves are being depleted little by little. As a result, the government is thinking of ways to diversify its economy and strengthen its banking and tourism sectors.
By Way of Conclusion
We at the International Wealth portal often deal with customers who come for advice on tax optimization. The economic situation is currently changing, and the rates that were good a few years ago may seem too high today. Our experts keep their fingers on the pulse and analyze all the best solutions on the market that are currently available. And if you need to find the best solution for your income or business, do not hesitate to contact us for help.
We invite you to our portal which contains a lot of articles where practical specialists share their experience and give advice. And if you want to ask any questions or dispel any doubts, contact us in any way convenient to you and find out everything you need to know to make an informed decision. Opportunities come and go, but we are here to offer you the best of those available!