Top Ten Countries With the Highest Tax Rate

Benjamin Franklin said that nothing could be certain in life except death and taxes. Franklin and the other founding fathers took exception to the English tax rate of approximately 7%-10%, one of the reasons prompting the American Revolution. However, by modern standards 7% is considered exceptionally low.While many of us may complain about taxes, America does not rank in the list of the top ten countries with the highest taxes. So, here we’ll look at what countries have the highest tax rate. 

Slovenia:

While it may be one of the smallest European countries, Slovenia has a massive 50% tax rate. The 2.1 million citizens can pay between 16% and 50% income tax, but there are also capital gains and inheritance taxes. However, Slovenia does have a well developed economy and imposes a moderate rate of corporate income tax of 19%. This could explain why Slovenia is the richest of the Slavic nations. 

Israel:

Israel has a small population of just 9 million citizens, but it has a resilient economy with the 13th number of startups globally who can expect to pay a reasonable 23% corporate income tax. However, citizens can pay 10% to 50% in income taxes, making it the highest taxed nation in the Middle East. 

Belgium:

Belgium is considered to be at the heart of the EU, with much of the committee meetings and activities taking place in Brussels. For this reason Belgium has forged a highly globalized economy and a ranking of the 10th largest trading nation in the world. However, this does come at a cost, as citizens can pay 25% to 50% income tax. Additionally, non citizens get hit with a 50% tax bill for operations within Belgium. 

Aruba:

Aruba is a bucket list destination for many people who dream of visiting this Caribbean Island. While there is some petty crime, Aruba is considered one of the safest destinations in the Caribbean. However, what you should be concerned with is the government picking your pocket! If you live in Aruba, the government imposes up to a massive 52% personal income tax rate. 

Sweden:

In terms of GDP per capita, Sweden just misses out in the top ten list of richest countries in the world. With a ranking of 11th, the country has a high standard of living with low income inequality. However, this post industrial society does have an advanced welfare state that comes at a cost for Sweden’s tax payers, with personal income tax rates of up to 55%. Sweden’s taxation system combines local and federal taxes, but sales of residential properties are exempt from taxation. 

Austria:

Like its other German speaking siblings, Austria is one of the most developed countries in the world, but the government demands payment for this privilege. The personal income tax rate is up to 55% and there is also an 18% social security rate, 27.5% capital gains tax and a 6% taxation rate for bonus payments. 

Denmark:

Denmark is highly ranked in the World Happiness Report, just missing out on the top slot with Finland piping them at the post. It also ranks 9th in the GDP per capita world rankings. The country has a population of just under 6 million and the Danish welfare state is based on the concept that all citizens should have equal access to services. This does mean that taxpayers can expect to pay up to 56% of their income to meet the needs of the people.

Japan:

In terms of nominal GDP, Japan is the third largest economy in the world behind the U.S and China, despite only having the 11th largest population. Many speculate that Japan has achieved this success due to its impressive work ethic. In fact, Japan’s capital city Tokyo is home to more millionaires compared to any other city around the world. Japan is also known for its innovation with Japanese corporations dominating Asia with their sophisticated automobiles and technology. This has created an abundance of income for the Japanese government to tax. The income tax rate in Japan is up to 55.97%, but there is also a corporate tax of 23.2%, capital gains tax, inheritance tax and gift tax. 

Finland:

Despite being ranked number one in the World Happiness Report, Finland has the highest taxes of all European countries and the second highest in the world. The population of 5.5 million people is subject to an income tax rate of up to 56.95%. Interestingly, even if you’re not a citizen, if you stay in Finland for more than six months, you are considered a resident from the view of the Tax Administrator. Additionally, any resident is subject to the Finnish tax rate with no distinction between where in the world your income is sourced. 

Ivory Coast:

With its stunning beach resorts, beautiful rainforests and amazing scenery, the Ivory Coast appeals to many people. However, before you even consider relocating, you need to know that the Ivory Coast has the highest income tax rates in the world. Residents can expect to pay up to 60% of their income to the Ivory Coast government. Countries with the highest tax rate often prioritize social security, education, healthcare and welfare programs. This requires substantial funding, provided by income tax and other taxation. In some countries, this is viewed as well worth the cost. For example, Denmand and Finland have some of the highest income tax rates in the world, yet they are ranked first and second, respectively, in the World Happiness Report. However, not all high taxation countries have the same attitude and many residents complain about paying over half of their salary to the government. While it may be tempting to dream of getting away from it all and starting a new life somewhere else in the world, you need to think twice before becoming a resident. While there are some places in the world that have lower tax rates compared to your home state, as we’ve just demonstrated, there are plenty of countries around the world with high tax burdens.