If you can’t stop complaining about how many deductions you get for every paycheck, you might want to start counting your blessings. Many countries worldwide have outrageous taxes, so before deciding to migrate, make sure you get your facts straight. Unlike VAT, estate tax, or donor’s tax, income tax is paid depending on your income alone in the Philippines. Income tax has a whole new story in other countries depending on income level, marital status, and even dependents. Two people with the same income but different status pay different taxes. Do you want to know the top countries with the highest income tax rate around the world?

Here are the top countries with the highest average personal income taxes for a single person with no dependents worldwide. Let’s start our top 1 country with the highest income tax rate around the world.

Austria.

 

The progressive tax rate in Austria caps at 55% and includes income from fringe benefits and employment. White-collar employees also contribute 18.07% of their income to social security, while blue-collar employees contribute 18.2%. Austria also offers automatic tax credits depending on the number of individuals in the household and additional credits for children and travel to work. Some expenses related to work and child care are also deductible.

Austria imposes taxes on different sources of income like wages, pensions, dividends, and interest. A resident person is subject to personal income tax, including their other incomes outside Austria. These incomes include profession, employment, investments, and income from trade or business.

Denmark.

An average Denmark citizen pays 45%. This is divided into labor market contribution tax (8%), municipal tax (27.8%), healthcare tax (5%), and capital gains tax (27 or 42%). There is also a withholding tax of 27% on dividends and 25% on royalties. Income from sources like interest, real estate rental, annuities, fees, pensions, business income, fringe benefits, bonuses, and employment income are all taxable. Tax deductions are only available for limited contributions to approved Danish pensions, charitable donations, and double households.

Any individual fully tax resident in Denmark will be taxed according to the ordinary tax scheme by up to 52.06% in 2020. However, any individual not subject to a full tax is also subject to up to 52.06% on income from sources within the country.

Belgium.

Like many countries in Europe, Belgium has what is called ‘progressive tax,’ which means those who earn more pay more tax than those who earn less. Whether your income is from property, investments, or other sources- all of it is taxable! The capital gains tax rate depends on the type of capital. On top of that, employees also pay social security tax that amounts to 13.7% of their income. The only deductions allowed for business expenses, social contributions, and only 80% of alimony payments. Find out 9 top countries that are tax-free

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Germany.

This is another country that imposes a progressive tax. Sources of taxable income include business ownership, savings investments, rental property, capital gains, and forestry. There is also a 25% withholding tax on interest and dividends and a 15% withholding tax on royalties.

Church members who pay church tax are also tax-deductible. If your income is up to 8,652 Euros, it is not taxable and considered an allowance. Those who want to pursue a future profession can also claim u to 6,000 Euros deduction per year.

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Hungary.

Hungary implements a fixed tax rate, not a progressive one, and that rate is 16%. Although this may sound like a low-income tax rate, the catch is that it applies to all income sources. Even passive income from sources like property rentals and interest is also taxable at the 16% rate. The only tax deductions Hungary offers is for business travel expense, professional training, and child-rearing. Each spouse is considered a separate taxpayer.

As for married couples with kids, the top countries are Denmark, Turkey, Finland, Netherlands, and Norway, with a tax range of 23 to 25.3%. So, where should you go if you want the lowest tax rates possible? Well, the United States is the 21st highest tax rate for married couples at 13.7%. The countries with the lowest average income tax rates for married couples with two children are Ireland (-0.3%), the Czech Republic (1.7%), and Switzerland (4.2%). Check this out the top 10 hilarious taxes around the world.

Final Thoughts

Under the new Train Law, individuals with an income below 250,000 pesos a year are exempted from paying income tax. On average, individuals pay a rate of 20% to 32% depending on the income bracket. If you think of it, this is far from the rates other countries are paying. Also, keep in mind that each country offers different benefits to its citizens, greatly impacting the tax imposed. Just because a country seems to have an extremely high or low tax rate doesn’t mean you won’t survive living there. Overall, taxation is not a reasonable benchmark for determining how you would fare in that country. Do you want to reduce your taxes? Check this out on how to minimize your taxes legally in the Philippines.

“If you know other countries with the highest income tax rate not on the list above, let us know by the comments below”