Home Money Top 10 Tax Free Countries In The World!

Top 10 Tax Free Countries In The World!

tax free countries
countries with no taxes

No Income Tax – something which everyone wants to hear! We always discuss about tax rates in many countries like 39.6% in USA etc. However, there is the other side of the world, where people have never heard about income taxes. That means, there are some tax free countries in the world, where there is no tax on personal income! So, let us look into the list of those tax free countries in the World.

List of Tax Free Countries in the World:

1. Qatar:

Qatar has no system of personal income tax, no value-added or sales taxes and no capital or wealth tax.  

However, there are other taxes. Those taxes payable are:

– Corporation Tax, applied mainly to foreign companies.
Import duties on essential items, imposed at 4% of the value of most products.
Service tax of 10% and government levy of 5% on restaurant and hotel bills

2. Oman:

Oman is like many other Gulf States in that there is very little taxation applied to residents. There is no income tax applied to salaries or the earnings of those who are self employed but there are deductions made from salaries for social security contributions.

Those who work in the private sector are expected to make contributions of 6.5% of their salary to the social security fund for benefits and old age pensions. These contributions are added to by employers at a rate of 9.5%. Also, the employer will contribute a further 1% for industrial illness and injury benefits schemes.

3. United Arab Emirates (UAE):

If you are working in the United Arab Emirates, you are not subject to income tax. You will, therefore, enjoy the benefits of a tax-free salary while earning income from the UAE. That said, you need to check with your country of origin as you may be liable to declare your income on your country’s tax returns. 

However, as of January 1st, 2018, value-added tax (VAT) has been introduced by the UAE government. The rate of the value-added tax is 5%. VAT is now applied to a few select retail products as well, with a 5% retail sale tax on products purchased in the UAE.

4. Saudi Arabia:

Saudi Arabia has been the ideal destination to work, save money, and enjoy a nice work-life balance. With little to no taxes, many expats find it a perfect place to really begin putting some savings away for future plans.

So, foreigners working in Saudi Arabia are exempt from income tax, property tax, VAT, vehicle tax, inheritance or gift tax, license fees, etc., which are quite widespread in many western countries.

As of January 1, 2018, the first time ever VAT will be applied to all goods and services in Saudi Arabia. The value-added tax (VAT) is 5%. Also, a 20% tax rate applies to foreign companies, which are paid by the owner or liable shareholders. Depending on the type of business, tax rates may differ across sectors.

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5. Bahrain:

The issue of taxation in Bahrain is relatively straightforward. There is no income tax system as there is in other countries such as the US or the UK. However, tax applies to all workers and amounts to 1% of the total salary earned. This has been implemented in order to fund a scheme for the unemployed. Some groups are exempt from this tax including military personnel and elected officials.

Also, Municipal tax is one that must be paid by all those in rented property and expats will have to pay a 10% fee (based on the value of the property) to the local authorities. There is no equivalent of Value Added Tax except on the sale of fuel, and a charge of 12% is made.

6. Kuwait:

There is currently no income tax in Kuwait. Also, Kuwait does not have sales tax for any goods or services. Kuwaiti nationals pay social security taxes, but expats do not. So, this makes Kuwait one of the tax free countries.

Also, foreign businesses in Kuwait pay a flat corporate income tax rate of 15%. However, Kuwaiti owned businesses are exempt from this tax.

7. Bermuda:

There is no direct income tax in Bermuda and there is also no capital gains tax. There are no income tax returns to file and as the country has no wealth taxes either this has led to Bermuda becoming one of the tax free countries in the world.

However, there is a system of payroll tax where employees pay a minimum of 4.75% of their salary and is added to by the employer. These deductions are made directly by the employer and passed to the tax office. 

Also, one of the few taxes levied is that of stamp duty which is applicable on certain property transactions. This includes that of inheritances and a rate of 5% is applied on property valued between $50,001 and $200,000, a rate of 10% from $200,001 up to $1 million and 15% on anything in excess of this.

8. Bahamas:

There is no personal income tax in the Bahamas, although residents do have to pay other forms of taxes. All employees and those who are self-employed will have to pay national insurance from their salaries and this applies to all, even non-residents.

However, Stamp duty is a tax that may be payable in a number of circumstances. Most individuals will find that they will need to pay stamp duty on real estate purchases and if they need to send large amounts of currency abroad. The lowest rate of stamp duty is 2%, but the highest is 8% on property transactions over $100,000. And, these fees are normally divided between the buyer and the seller. A 1% charge is applied to mortgages and paid by the borrower. Charges for sending money abroad are calculated at 0.25%.

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