They say only death and taxes are certain: the folks living in 10 countries with the highest tax rates in the world know all about that. Taxes are the backbone of every country’s social policy, but they can be even more, especially in undeveloped countries with otherwise weak economies. This is where taxes amount to a large percentage of country’s total available funds. Some countries have higher tax rates than others, thus procuring more funds for various government services and projects, but higher taxes don’t necessarily have to yield better results. Lower taxes can and usually do attract various potent economic partners which find it more economical to pay their taxes there than in their native countries. Here’s a list of 10 countries with the lowest tax rates for the rich which should clarify which of world’s countries are most profitable for establishing businesses – tax-wise.
Taxes come from several sources, and we’ll use both personal and corporate tax rates, together with VAT, GST and sales tax rates in order to present you the countries which will take the largest chunk of your income. We’ll find an average percentage for highest and lowest personal and corporate tax rates, and then pull out the average with VAT, GST and sales tax rates for the final figure.
But first, let’s explain what each one of these taxes means. Personal taxes are government taxes aimed at individuals. If you have a job with a steady income, you’ll pay a certain tax (a portion of that income) which will be calculated based on your personal gain. The more you earn – the bigger the tax, usually. Corporate or company taxes follow a similar pattern but are imposed on companies. They also have their minimal and maximum values. Finally, VAT, GST and sales tax rates represent taxes on goods and services. VAT (value-added tax) or GST (general sales tax) are taxes that end-users (buyers) pay for purchased services, products and materials. This is a tax which only affects the buyer and is generally a fixed percentage which might differ depending on the type of product. For the purpose of this article, we only used standard rates and disregarded all special ones. Sales tax, unlike VAT or GST, doesn’t apply to all goods and largely varies depending on their type. Furthermore, sales tax is imposed on retail sales at the moment of purchase, thus also only affecting the final consumers. VAT or GST also affects the end-users, as we have seen, but unlike sales tax, it is imposed on each and every stage of the supply chain, thus adding value along the way to the retailers. We have found the info on Trading Economics and EY and then compiled the list of 10 countries with the highest tax rates in the world in an above-described manner.