If you ask anyone which country has the highest taxes, he would say it’s own country. We all must pay taxes; there is no way around it. Taxes are put into place to improve the quality of life of taxpayers as well as to develop and maintain a country’s infrastructure. And there are many types of taxes, from income and capital gains to corporate and property. However, the most important may be personal income tax. While Australia does have a high personal income tax rate, there are other countries with an even higher personal income tax rate.
Top Six Countries with a High Personal Income Tax Rate
- Aruba — This paradise comes with a price — an income tax rate of 59%. This rate has remained consistent for the past 8 years. The main source of revenue is tourism, and it is not the tax haven many believe it to be.
- Sweden — It requires its citizens to pay 57% of their income in taxes. The taxation system is a combination of income tax and social security contributions by employers. The good news is that the sale of a residential property is tax-free.
- Portugal — This nation has enjoyed recent startup growth, particularly in Lisbon. However, it has the second highest income tax rate at 56%. Portugal’s tax system promotes equality between the high and low-income earners, and has a progressive income tax ranging from 14.5% to 48%. Portugal is a great place to retire tax-wise because pension distributions and foreign income aren’t taxed. However, U.S. citizens will still get taxed back home.
- Japan — With an economy heavily based on technology, Japan’s income tax rate is 55.95%, and has three tax categories depending on your resident status: resident, non-permanent and non-resident. This small island has the 10th largest population in the world and the fourth largest economy.
- Denmark — As a “happy” country, Denmark’s income tax rate is 55.80%. It provides equal access to social programs for all its citizens, which is one of the factors for its high tax rate. Its highest income tax rate reached its peak in 1997 at 65.90% and the lowest in 2010 at 55.40.
- Austria — This central European country is home to 9 million people and has a high income tax rate of 55%. The rate has remained the same for the past three years. It also has a high capital gains tax at 25%.