17 countries where to live without the dreaded income taxes

Index [Hide] [Show]

For many countries, collecting personal income tax has become the first source of income. Benjamin Franklin once said: "In this life there are only two certain things: death and taxes". However, in our world there are places where half of this statement can be easily challenged.

In this article we are going to talk about the 17 countries with 0% income tax. These countries and their governments have shown that a state can grow and develop without applying this tax, countries where citizens are not required to work half the year for the budget and only another half for their own benefits.

Throughout our lives we are forced to pay taxes. Some are deducted directly from our salaries, others have to present the declaration and within a short period pay what the fiscal agency claims. But where does this money go? Why can't we decide in what this money would be spent, since we have generated and gained it? More and more people are asking themselves this question and when not finding a satisfactory answer, begin to consider the option of moving to other countries.

17 countries where to live without income taxes

Of course, not all of these countries with no income tax would be of great interest to most people. Some of them are small islands and in reality, there is practically nothing only few universities and businesses, in other countries the civil situation is very dangerous for living with the whole family and be calm for your children. Other jurisdictions that, on the contrary, attract many workers and investors from around the world, take advantage of the interest and establish a strict list of the requirements that must be met in order to be able to obtain permit of residence and benefit from the tax advantages. What happens in these cases? That sometimes one of the requirements is a large investment and a middle-class worker cannot face this expense.

However, there is nothing impossible and therefore we have prepared a practically complete list of countries where residents do not pay income tax. And you never know, maybe in it you will find your future country of residence.

British Virgin Islands

British Virgin Islands is one of the best-known offshore financial center in the world. Therefore, income tax, capital gains, corporate tax, inheritance tax and taxes on sale of asset do not exist. The only taxes that finance the state of BVI are those paid by companies on the payroll and social security of employees. Small businesses and those that generate less than USD 300,000 take advantage of a special regime and instead of paying 14% they pay 10%.

Despite all the tax advantages offered by the Virgin Islands, it is very difficult to obtain a residence permit in this offshore jurisdiction. The government authorizes only 25 residence permits per year and there is a minimum limit of 270 days of permanence in the islands per year.

Vatican City

Despite the absence of a tax system, Vatican revenues reach a fairly significant amount. This is a consequence of the donations of believers who come from all over the world, profits from the sale of own printed materials to tourists and income from investments in large companies, companies, banks. All this guarantees the development of the state without income taxes. Unfortunately, moving to the Vatican looking for the favorable tax regime will never be the option for most of us.

Brunei

Brunei is the only Asian country on the list of countries with no income taxes. Like most countries where this type of tax does not contribute to the development of the state, oil and gas are the resources to finance most of the government's revenues. However, neither gas, oil, nor tourism can fully provide the state, therefore, citizens of these countries pay alternative taxes: 5% of their salary goes to the social security trust fund and 3.5% to the fund of pensions.

Before considering Brunei as the option for permanent residence, it must be borne in mind that it is a Muslim country and many customs that form the basis of daily life can be a bit shocking for the residents of Europe.

The Bahamas

Being one of the richest countries in the Caribbean, the economy of the Bahamas depends heavily on tourism and the offshore banking sector.

Approximately 70% of government revenues come from import taxes and duties. Although the citizens of these islands do not have to pay the income tax, employees are subject to 3.9% (a maximum of $ 31,200 per year) in favor of a social security fund called State Insurance.

In order to obtain a residence permit in The Bahamas it is necessary to make an investment in a business or buy a property for a minimum amount of USD 500,000 and a maximum of USD 1,500,000. The higher the amount, the faster the residency approval process will be. The permission requested for a person gives him the right to move to the offshore territory with his whole family. At the same time, government regulations do not impose on investors any obligation to remain in the Bahamas for a minimum number of days or weeks to maintain resident status.

Turks and Caicos Islands

The Turks and Caicos Islands are an attractive place for investors around the world, since the state does not require the payment of direct taxes. The citizens of the islands are exempt from income tax, as well as inheritance and donation taxes. For legal persons, companies, only compulsory license fees are obligatory. Import taxes are withheld from both legal and physical persons and employers and workers on joint terms pay social security premiums.

Since life on these islands is very expensive, the government has a favorable program for those who want to obtain permanent residence. With the payment of 1,000 USD per year you can obtain a temporary residence that can be changed by permanent residence after 5 years.

Monaco

Monaco - the capital of world wealth. The most famous and fortunate people live and spend their vacations in the small territory of this country. The secret of this unconditional love for Monaco is clearly its tax system that frees its citizens from income taxes, capital gains, donations and inheritance taxes that have been significantly reduced.

An exception to this rule is the citizens of France, with whom Monaco has signed a special bilateral agreement. According to it, the French, who have lived in Monaco for less than 5 years, must pay the income tax.

The only tax imposed on absolutely the entire active population of the principality, regardless of whether it is the employer or an employee, is the social security fund tax, which varies between 19 and 40%. Thanks to the recollection of this tax, pensions in Monaco are one of the highest in the world.

In order to obtain permanent residence in this country it is necessary to make an investment in the form of a deposit in total for EUR 500,000 or buy a property for the same amount. In addition, it is mandatory that you spend more than 6 months and one day in the territory of Monaco to maintain your residence status.

Bermuda

Bermuda is one of the richest tax havens in the world. The local economy of these islands depends largely on financial services for the companies that have established their own businesses in the country and carry out commercial activities throughout the world. Although the income tax is not charged, companies have to pay 15.5% on the payroll of employees. Workers also have to pay $ 30.40 per week in the form of a social contribution.

The best way to become a tax resident in Bermuda is to make an investment, establishing a business there or obtain a working visa. However, you have to make sure you have enough funds to be able to have a comfortable life in this country and be able to face all the expenses.

Oman

In Oman, as in many other countries on this list, most of the country's revenue for development and growth comes from the sale of oil. The monthly export income exceeds $ 8 billion, which allows citizens to be freed from a tax burden and eliminates the need to establish income tax. In addition, the level of inflation in Oman is very low, only 1.1% and the sales tax (VAT) is equal to 0%.

Although Oman's welfare base is oil, now investors from all over the world come to the country to invest and work in other financial areas.

However, it is worth mentioning that if you cannot live without a Coca-Cola or glass of white wine, Oman is not a country for you. The country's government has introduced a 100% tax on energy drinks, 50% on soft drinks and 100% on tobacco. Thanks to these measures, the government of Oman intends to receive additional revenues of $ 260 million and reduce the economy's dependence on oil.

Saint Kitts and Nevis

Saint Kitts and Nevis has an optimized and very favorable tax system that allows to eliminate income tax and tax on capital gains from operations abroad. This feature motivates investors with international businesses to place their capital in the country and become tax residents. Those who do not seek to set up a business in Saint Kitts and Nevis have the option of buying a working permit that costs little more than $ 600.

Alternative taxes in Saint Kitts and Nevis include payment to the social security fund of 5% of total earnings. An additional fee is also charged for construction and housing development. The tax rate varies according to the amount of annual earnings.

The passport of Saint Kitts and Nevis gives to its holder an access to 130 countries and making an investment of USD 250,000 per person or USD 400,000 per couple anyone who is over 18 can apply for it. Also, there is an option to sell the property after 7 years and recover this money.

Qatar

Qatar - the richest country in the world in terms of GDP per capita where the main income for infrastructure development comes from gas production: the gas reserve is estimated as the third largest in the world.

Companies involved in the extraction and processing of gas and oil in Qatar pay up to 35% of the income tax. However, the government does not apply personal income taxes, taxes on dividends, royalties and profits. The only tax obligation of citizens is the payment of 5% for social security fund.

For several years Qatar has become a very attractive place for expatriates who come to work in international companies and take advantage of this favorable tax regime. Many of them stay in Qatar for a few years and then with the profits generated they return to their home countries.

Another advantage of Qatar that can be very attractive for permanent residence is the crime rate, which is quite low. The country is considered one of the safest in the world and many residents do not close the doors of their houses and cars.

Vanuatu

Vanuatu offers one of the most loyal tax systems in the world. The tax conditions on the island are equally favorable for residents and non-residents. There is no income tax, tax on wealth generation, inheritance, profits and capital export. Also, offshore companies (IBC) are exempt from any tax during the first 20 years.

For those seeking to obtain a residence permit in Vanuatu there are quite cheap investment programs. With the purchase of property worth USD 80,000 and having a minimum income of USD 2,000 per month, anyone can turn this island into their home.

Kuwait

Kuwait is the sixth largest oil exporter in the world. In this country, 95% of the state budget is financed with revenues from the sale of oil. Thanks to its natural resources Kuwait has become one of the richest countries in the world with the highest per capita income.

Despite the absence of income tax, Kuwaiti citizens pay 7.5% of their wages in the form of a social security contribution, and their employers pay up to 11%.

Despite the stability in the financial sector, the political situation in Kuwait is not quite stable. In the last 5 years the country's parliament has been replaced six times due to corruption and distrust by citizens.

The Maldives

The economy of the Maldives is growing thanks to tourism and most taxes go to the budget through import tariffs and tourism taxes.

For many years the citizens of the Maldives were exempt from income taxes. However, due to the financial problems that the country had accumulated over las years and the lack of income to finance the state budget, on December 4, 2019, the Maldives parliament approved the income tax law.

In accordance with current legislation, citizens of this jurisdiction pay income tax only when they carry out business activities, and the income of foreign workers is subject to income tax for a total of 3% when transferring funds abroad.

In accordance with the approved law, the income tax rates will be as follows:

up to 43,000 EUR - 0%

from 43,000 EUR to 72,000 EUR - 5.5%

from 72,000 EUR to 108,000 EUR - 8%

from 108,000 EUR to 143,000 EUR - 12%

from 143,000 EUR - 15%

In addition, the list of taxes for non-residents is expanding.

Nauru

Nauru is a small state located on a small coral island in the Pacific Ocean, with a population of only 10,000 people living in an area of 21 km2.

Many years ago Nauru was compared with Monaco, a small tax haven for people with high purchasing power. However, after phosphate rock mines ran out of resources, the island experienced a serious environmental disaster, and in an attempt to increase money flow, in the early 1990s it was decided to turn Nauru into an offshore jurisdiction. As the result, it became so popular that American financial institutions fighting money laundering were forced to ban the creation of offshore banks on the island. However, the government has maintained the income tax exemption program and to this day, the corporate tax rate in Nauru remains one of the lowest in the world of only 10%.

The United Arab Emirates

The United Arab Emirates has one of the highest levels of per capita income, reaching almost $ 49,000. In this country there is no income tax or capital gains tax, which makes it very attractive for foreign and expatriate investments seeking favorable tax regime and salary improvements.

The country's tax system, instead of imposing income taxes on natural persons, replenishes its budget thanks to the duties of oil companies that pay up to 55% of total profits in the form of corporate tax. As a result, and because the country ranks 7th in the world in terms of reserves of crude oil and gas, 80% of the budget of the United Arab Emirates is financed with money related to oil industry. Foreign banks also pay up to 20% in taxes.

It should be mentioned that expats do not pay social taxes in the country, while citizens of the Arab States must pay around 5% of their income to social security. Employers must also pay an average of 13% in the form of contributions to the social fund, pensions and social services.

Cayman Islands

Cayman Islands is a true tax haven and one of the best-known places in the world for offshore schemes. In this country there are no taxes on income and earnings, there is no VAT, nor payments in favor of mandatory state insurance. The only indirect taxes that exist in Cayman Islands are tariffs on imported goods, which can reach 25%. In this way the financing of the country's budget is based on import taxes, the payments that employers make in favor of the employee's pension fund and the annual registration and renewal fees of all international companies, and there are many.

For all those who want to make the Cayman Islands their permanent residence and enjoy its Caribbean beaches all over the year, the government offers the possibility of making an investment of 500,000 EUR, of which half have to go for the purchase of the house.

Bahrain

Bahrain is the smallest Arab state located in the Persian Gulf. Having no income tax, Bahrain receives revenues from oil exports, which provide the country with up to 70% of budget revenues.

However, to maintain the country's economy, the government imposes various types of municipal and social taxes. For example, natural and legal persons who rent real estate pay a municipal tax of 10% of the total rental price. The monthly deductions paid by the employers to the Social Security Organization represent 4% of the salary of each foreign worker and 12% of the salary of each Bahraini citizen.

Becoming a citizen of Bahrain is quite difficult for a foreigner since it is required to live in the country for at least 25 years. However, it is quite easy to obtain a residence permit. For this, it is necessary to meet at least one of the following conditions: to own real estate in the territory of Bahrain, to have a work visa or to carry out a commercial activity by registering a local company.