We all have read and heard a lot about income tax, but many of us don’t know that there are few countries Countries without income tax. yes, it is true few countries are not charging income tax from their citizens and residents. this is because of many reasons. for example UAE, The UAE is the global leader of Oil production so the country is naturally rich. so they are not charging tax from the people. also, the government aims to encourage business and startups from other citizens in the UAE. so there are many reasons like this behind the no income tax rule in different countries. in this post, we will discuss the counties that are not charging income tax from its citizens and residents.
7 countries that have no income tax
- The United Arab Emirates
- The Bahamas
United Arab Emirates
UAE is very rich in natural resources like oil and its free trade zones that are open to foreign ownership and zero taxes make this country a popular destination for global investments.
The UAE has zero income taxes for individuals granting them the privilege of tax-free salaries. Corporate tax in the UAE is levied only on foreign banks and oil companies, leaving other industries tax-free. for a handful of goods and services, excise duty is levied whereas Value Added Tax is imposed on a bulk list of goods from 2018. also, UAE allows a concession on Double Taxation on overseas investment to all public and private companies and other companies operating in the country under the Double Taxation Agreements (DTA).
The Caribbean country Bahamas has tax-friendly laws that make the county an attractive destination for business and investments also the Bahamas is a favorite place for foreign financial institutions. This tax haven country is not collecting any taxes on personal income or corporate income. Corporate taxes are charging on the international companies operating and doing business in the Bahamas only if the revenue is generating locally. Other tax-free areas of the country bahamas include wealth, inheritance, capital gains, etc. irrespective of getting citizenship, the residents of the country can enjoy the benefits of taxfree income.
Qatar allows tax-free personal income to individuals. but, commercial activity is subjecting to company taxation that entails 10 % of the company’s total state income and has to be paid annually. A 10 % fixed tax rate is exacting from rental income too. the country’s tax rules and high-class infrastructure is attracting a number of foreign business to this country. but, foreigners from specific countries including the US, UK, Australia, Canada, Ireland, and South Africa are subject to taxes according to the tax laws.
Irrespective of nationality, anyone residing in Kuwait, is granting the advantage of tax-free personal income. This essentially means that Kuwait’s tax law does not define the concept of resident and non-resident. However, a corporate tax is levied on foreign corporates in the country. but these foreign companies have to pay 15 % of their income to the Kuwaiti government.
Monaco’s personal and business laws related to taxes make it a well-known tax-haven. It does not collect taxes from the personal income of its residents. also, A person residing in Monaco for six months or more becomes a resident and is thereafter exempted from paying income tax.
This city-state also does not collect taxes on capital gains and net wealth. Residents can enjoy tax-free property ownership in Monaco, however, a 1 % tax is collecting from rented properties annually. Monaco also does not have a general corporate tax. Only certain types of companies whose profits are 25 % or more on their operations existing outside the country get subject to taxation.
These tax laws along with a high regard for financial secrecy and data privacy makes this country a highly appealing destination for expatriates and foreign investors.
This Gulf nation has lenient and business-friendly tax laws. It does not collect taxes on the personal incomes of residents or non-residents. Wealth, capital gains along property all come under the ambit of these tax-free laws. Businesses and companies are subjecting to a 15 % tax collection on their taxable income. However, companies involved in petroleum operations have to pay a 55 % tax. An income tax can be imposed on expatriates.
The Panama is one of the ‘tax haven’ countries in the world with a flexible legal structure and tax-friendly laws. Panama is not imposing any income taxes on individuals and offshore companies. Offshore companies that are doing business outside the country are allowed zero income tax and corporate tax. but, offshore companies doing business locally will be subject to minimal local taxes.
Most of us pay income tax. but many of us are unaware of tax rules. and other important facts about the income tax. in this post, we discuss the 7 countries that are not charging income tax from its citizens and residents. i hope this post will help you to get an idea about income tax-free countries.