Did you know that for most individuals around the world, the biggest yearly expense is taxes? Sure, some tax payments make sense, as they go to funding public services like schools, roads, hospitals, and infrastructure. However, you might live in one of the countries where taxes are extremely high and take away earnings from your hard-earned work.
While no one would ever advocate for moving based on tax status alone, this could play a decisive role if you are already considering moving. If you are ready to pack your bags and open to a new adventure, consider these 5 tax-friendly countries.
Monaco
Monaco is known for its glitz and glamour. But did you know it’s also considered a tax haven thanks to its lenient tax laws and regulations? The country doesn’t have any income taxes for its residents (except for French nationals). There are also no property taxes and only a 1% tax on rental properties. Monaco is also attractive to businesses, with no corporate tax and no taxes on dividends through companies in the country.
Yet, Monaco is an expensive place to live, and most people can’t afford the lifestyle in the country with only about 39,000 people. So, the tax haven that Monaco provides has historically been reserved for the ultra-wealthy.
UAE
Another nation that doesn’t have any income taxes is the United Arab Emirates (UAE). It’s a growing Asian country with vast resources, thanks to its oil reserves. If you are living in the UAE, you won’t even have to file an income tax return, not only eliminating the costs associated with it but the headache that often comes with filing taxes as well. The UAE could be an excellent place for self-employed or freelance workers, as the 0% income tax applies to these individuals as well.
However, if you are going to the UAE to visit, you might find yourself footing the bill for the nation’s residents. The UAE has high tax rates on its tourism industry, which induce 10% service charge, 10% municipality fee, and 6% tourism fee.
Jersey – UK
Not to be confused with New Jersey in the United States, Jersey is an island nestled between England and France, and one that has its own government while still being considered under the rule of the UK. Those with high incomes are subject to a 20% income tax, which is still well below that of other neighboring countries. Other benefits include no inheritance tax or tax on capital gains.
Jersey might be an excellent option for those already living in Western Europe. It not only provides its own tax advantages, but it’s not a far move for those already living in the UK, France, and other countries in the region. There is a social security tax, which amounts to 3.9% for employees and 8.8% for self-employed people.
Estonia
Estonia has created a booming technology industry with the help of its government. Its tax-friendly policies have helped attract innovative companies and motivated employees along with them.
In this same spirit, we aim to make getting the tax report for your Go & Grow as easy as possible.
Employers in Estonia must withhold all applicable taxes from employee paychecks, making the tax process as easy as possible for employees. Therefore, individuals don’t have to worry about making their own tax payments at year’s end. Tax returns can easily be filed online in just a few minutes. And, with a 20% income tax rate for everyone, Estonian workers keep most of their earned income.
It’s no wonder many businesses like Bondora have decided to house their corporate headquarters in Estonia. We think our employees would agree!
Bahamas
Not only is it a beautiful island off the coast of the United States, but the Bahamas is also considered a tax haven by many. The country offers no taxes on income, inheritance, or wealth. As a result, many wealthy individuals have moved to the island to keep their fortunes. But this doesn’t just apply to the wealthy—it applies to everyone that moves to the island nation.
So how do the Bahamas make revenue from tax? The government imposes a pretty hefty value-added tax (VAT) of 12% on all purchases, except consumer staples like groceries and medicine, which are exempt. This means the tax laws of the Bahamas are the most advantageous for those who want to live in a beautiful island nation and are happy not to spend money on unnecessary purchases.
Is it time to relocate?
It’s not uncommon for individuals and families to move in search of a better financial life. In fact, the process of geoarbitrage, as it’s called, has become much more common in today’s day and age when many employees have moved to work in different countries and cities.
When deciding where to relocate, these tax-friendly countries can serve as a jump-start, especially if you are flexible and open-minded about moving somewhere new. Remember, though, just because a country is tax-friendly doesn’t necessarily mean it’s right for you, so make sure to consider the other factors that play a role in your decision to relocate before taking the leap.
