Tax rates mapped: Cheapest Income Tax around the world revealed – where do you pay most?

In the UK, Income Tax applies at different rates to different portions of taxable income. The Personal Allowance is a tax-free amount, which in the 2019 to 2020 tax year is a standard amount of £12,500, which means taxable income in this band is not taxed. In addition to other types of tax which may be payable, those in the UK are usually required to pay VAT (value-added tax) on things such as most goods and services. The standard VAT rate is 20 per cent, however there are some instances where some goods and services are subject to a reduced rate of five percent, and others zero per cent.

Some Britons may think about moving overseas, be that for the sunnier climes, different culture, or proximity to family.

When making the move, it may be that prospective expats consider certain countries particularly for their low tax rates.

Now, travel experts from MyBaggage.com have taken a closer look at some of the highest and lowest tax rates across the globe, using figures from July 2019.

They have found that Sweden has the highest tax rate, being approximately 61 per cent in practice, MyBaggage.com said.

Another location with tax rates noted by the team for being high was the Netherlands, where top rate tax is 51.75 per cent.

Meanwhile, workers in the UAE and Saudi Arabia are not subject to any direct tax on their taxable income from their job.

According to the baggage delivery company’s research, Australia has one of the lowest standard sales tax rates among popular destinations for Brits.

In this country, the Goods and Services Tax is 10 per cent – while the standard VAT rate in the UK is 20 per cent.

A spokesperson for MyBaggage said: “The cost of living is usually an important consideration for emigrants and it’s hard to organise a move to a new country without all of the facts.

“Brits planning to start a new life abroad need to know the rates of tax in different countries around the world as it directly determines how much cash will be left in your pocket every month.

“Potential expats can then weigh up the overseas opportunities and consider which location might provide them with the best value for money and quality of life.”

A look at different tax rates across the world, according to MyBaggage.

1. Australia

Income tax: 45 per cent top rate, plus two per cent Medicare levy.

Corporation tax: 27.5 per cent for ‘small businesses’ – 30 percent otherwise.

Sales tax: 10 per cent.

2. Sweden

Income tax: Up to 61 per cent, in practice.

Corporation tax: 21.4 per cent.

Sales tax: 25 per cent.

3. USA

Income tax: 37 per cent top rate.

Corporation tax: 27 per cent.

Sales tax: 0 per cent to 10 per cent per state.

4. UAE

Income tax: Zero per cent.

Corporation tax: Discretionary up to 55 per cent (in practice, this is generally only applied to foreign banks and oil, gas and petrochemical companies – zero per cent otherwise).

Sales tax: Five per cent.

5. Ireland

Income tax: 40 per cent top rate.

Corporation tax: 12.5 per cent.

Sales tax: 23 per cent.

6. Brazil

Income tax: Up to 27.5 per cent.

Corporation tax: 34 per cent.

Sales tax: 17-19 per cent depending on location.

7. France

Income tax: 45 per cent top rate.

Corporation tax: 31 per cent.

Sales tax: 20 per cent.

8. Japan

Income tax: 45 per cent top rate.

Corporation tax: Around 30 per cent.

Sales tax: 8 per cent.

9. Cyprus

Income tax: 35 per cent top rate.

Corporation tax: 12.5 per cent.

Sales tax: 19 per cent.

10. New Zealand

Income tax: 33 per cent top rate.

Corporation tax: 28 per cent.

Sales tax: 15 per cent.

11. Argentina

Income tax: 35 per cent top rate.

Corporation tax: 30 per cent.

Sales tax: 21 per cent.

12. India

Income tax: 30 per cent top rate.

Corporation tax: 30 per cent.

Sales tax: Around 12 per cent.

13. Malta

Income tax: 35 per cent top rate.

Corporation tax: 35 per cent.

Sales tax: 18 per cent.

14. China

Income tax: 45 per cent top rate.

Corporation tax: 25 per cent.

Sales tax: 9 to 13 per cent.

15. South Africa

Income tax: 45 per cent top rate.

Corporation tax: 28 per cent.

Sales tax: 15 per cent.

16. Saudi Arabia

Income tax: Zero per cent.

Corporation tax: 20 per cent.

Sales tax: Five per cent.

17. Russia

Income tax: 13 per cent.

Corporation tax: 20 per cent.

Sales tax: 20 per cent.

18. Germany

Income tax: 45 per cent top rate.

Corporation tax: 30 per cent.

Sales tax: 19 per cent.

19. Canada

Income tax: 33 per cent top rate (federal).

Corporation tax: 26.5 per cent.

Sales tax: Five per cent to 15 per cent by province.

20. Netherlands

Income tax: 51.75 per cent top rate.

Corporation tax: 25 per cent.

Sales tax: 21 per cent.