One of the major factors that affect the disposable income of high salary individuals is their personal income tax rate. If you feel that you are paying too much tax in your home country, then you might want to consider relocating to a lower tax destination. In this article, TaxClimate.com has compiled a list of countries where income tax rates are zero or very low…
Countries That Have Low Personal Income Tax Rates
Earning a high annual salary is a double-edged sword. On the one hand, the income allows you to live a comfortable lifestyle. The downside, however, is that your income is often taxed at the highest rate, meaning the percentage of your salary that you get to keep is lower overall.
Fortunately, there are options. Here is a list of countries that impose zero or very little personal income taxes, leaving you to keep more of your hard earned money…
1. The Cayman Islands
The Cayman Islands is a well-recognized place for offering favorable tax laws. Not only is the personal income tax rate zero percent, corporations are not taxed on income either.
Obtaining residence in the Caymans is a relatively easy process. In fact, the country has defined a specific economic zone for foreign individuals to form a company, and obtain residence by doing so.
The lump sum taxation that Switzerland uses is what makes this country attractive to those who are looking for lower personal income tax rates. This is because it is a flat rate, and you are not required to disclose your annual income to the government. The flat rate is negotiable and is, on average, typically between 150-200k swiss francs.
In addition to the tax benefits, Switzerland also offers the benefit of its central location, quality infrastructure and quality of life.
3. UAE (Dubai)
The “Free zones” of Dubai allow expats to obtain residence in the region, by establishing a company in one of these zones. The personal incomes of individuals who have residence in these Free zones are not taxed at all.
In addition, there is no corporation tax for companies that operate in these free zones too.
The Bahamas has zero personal income tax and corporation tax. Its proximity to the United States, political stability and quality of life make it an attractive choice for expats to lower their tax burden.
This is another location that offers the advantage of zero personal income tax. If you are able to demonstrate that you have significant financial wealth, you will be able obtain residence in this location.
Real estate and general cost of living in Monaco is at a significant premium, and as such this location tends to attract the ultra rich.
For those with high incomes, the options for minimizing your personal income tax are many. However, you may need to consider other factors such as lifestyle, location, and culture in your decision to relocate. Nonetheless, you will be able to better reap the benefits of keeping more of your hard earned money by obtaining a residence in one of these locations.