Not every country in the world has the same complex tax system that is used by the United States. Reform to corporate and individual income taxes has led to lower rates on the international level. Instead of layers of taxation, simplified tax systems have been implemented. Here is a countdown of countries that have discovered a way around high taxation to corporations and individuals (excluding oil-rich nations). Starting with number 10 below! Here’s a spoiler, number 1 has a 0% income tax rate!
Latvia has an individual tax rate of 23%. There are some exemptions granted depending on the type of income. Tax rates for corporations are 15% as are individual capital gain taxes.
Singapore operates on a sliding income scale in determining its individual income tax. Any income above S$320,000 is figured at 22% while any income below S$22,000 has a tax rate of 0%. Singapore does not have an inheritance tax or a capital gain tax. The corporate tax income rate is 17%.
Ukraine holds its income tax rate at 18%. There may also be a 1.5% temporary tax imposed during times of military aid. Most capital gains are further taxed at a rate of 1.5%.
Romania holds an income tax rate of 16%. Their corporate tax rate is also 16%. This is a significant decrease from 1995 when the corporate tax rate was at 38%. However, the social security rate for companies is 23.45% and 16.5% for working individuals.
Lithuania has a flat tax of 15% on all individual income. There are also tax credits which are given for housing, education, moving and cost-of-living increases. This country makes up for the low tax by implementing a VAT tax of 21% with some reduced rates allowed.
The flat income tax rate of 13% in Bolivia can be misleading due to other forms of taxation. Luxury items, like cars, alcohol and perfume have taxation ranging from 18% to 50%. There is also a VAT tax set at 13%.
Bulgaria has a flat tax of 10% on all personal income. The Bulgarian corporate tax rate is a flat 10%. For this reason, they are a magnet for attracting new business.
Guatemala has an individual tax rate of 7% today compared to 31% in 2008. The corporate tax rate, however, sits at 25% and the sales tax rate comes in at 12%.
2. The Bahamas
The Bahamas have a 0% income tax rate. They are also exempt from the first $50,000 of assessed value on property tax. Duties and tariffs are their main source of government revenue.
1. Cayman Islands
Cayman Islands imposes 0% domestic taxation. There are no taxes to file and the only source of government relies on import duties and various stamp duties.
International income tax percentages vary per country. All taxation methods should be taken into consideration when comparing the lowest income tax.