Who Doesn’t like Being Rich? But Being Rich Comes with a Lot of Responsibilities, like Paying Hefty Taxes.
It’s like a modern-day Robin Hood, taking from the rich and instead of giving it to the poor, the money goes into the country, its infrastructure and day to day running costs. Here are the Top 10 Countries with the Highest Taxes for the RICH.
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10
Croatia
Taxes are high in Croatia. If you are a foreigner living in Croatia and receive most of your income from within the country, you will also pay taxes.
Croatians are taxed on their worldwide income with the highest tax charged being 30%.
Nationally, the country derives most of its revenue from taxes, social security contributions, VAT, and corporate tax. The government can also collect up to 18% surtax.
As recently reported by total-croatia-news.com, Croatia have lowered their taxes. As they explain, “Croatia has lowered its income tax rate and there are hopes that the move might attract a few Croatian emigrants’ home from Ireland.”
Hopefully the news will be good for Croatia, as each year emigration and demographic trends bring worse news for the country.
9
Finland
Finnish citizens have made headlines recently because of their exorbitant taxes on cars. According to the helsinkitimes, “Drivers pay car tax, vehicle tax, fuel tax, propulsion tax and even insurance premium tax, for traffic insurance is a compulsory purchase for car owners. On top of all this, there is the value-added tax of cars and fuel.”
Right, so if you thought that was excessive, their taxes are rather high as well. They have progressive tax, but their tops out at 31.25%. Added to that is social insurance contributions and a public broadcasting tax.
Finland’s Tax Administration has recently ruled that they will provide the media with a list of the highest-income Finns’ tax data. If a citizen does not want their name and tax information on the list, their name is still made public.
8
Ireland
When the Irish Times reported that when asking expats if they’d ever return to Ireland, their stock answer was, “we would, if it weren’t for the weather and taxes.”
How is the tax calculated?
In Ireland, they work on a Pay As You Earn system or PAYE. There are two rates on which tax liability is calculated: The standard rate at 20%, which applies if you’re earning less than €35,300 a year and anything over that yearly figure is taxed at 40%.
So, if you earned €45,300 a year, you’d be taxed 20% on the €35,300 and then 40% on the remaining €10,000.
As the Irish Times brought forward, earning just over the minimum threshold is still a low salary, and then to be hit with 40% tax on that is not ideal. Anne Gunnell, director of tax policy at the ITI, added, “The higher tax rate kicks in much quicker, at an earlier stage, at a more modest salary.”
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7
Australia
Covid has had a crippling effect on millions of people globally, yet billionaires around the world have managed to cash in on the crisis. In Australia, the wealth of billionaires rose substantially between December 2019 and December 2020.
Housing has reached record levels and stock markets are reaching new heights, which means the wealthier keep getting wealthier.
Australia relies heavily on direct income taxation. There they have a sliding scale of tax… lowest being 19c for each $1 over $18,200 earned and the highest being $51,667 plus 45c for each $1 over $180,000.
Unfortunately, not every country has been as lucky as Australia during the pandemic. Check out 15 Countries That Are Going Bankrupt Because of COVID.
6
Germany
Germany also has a progressive tax. This means that the more a person earns, the more tax they will pay. The tax caps out at 45%. There’s a small saver’s allowance of €801, then a 25% withholding tax on interest and dividends and a 15% withholding tax on royalties.
Anyone in the following industries is taxed – own business, self-employed, employed by someone else, agriculture, forestry, any savings or investments, income from rental property and capital gains.
Some Germans are taxed between 8 and 9% depending on what church they belong to. Although everyone pays a church tax, they can choose to give it to a church or to the state.
Anyone earning €9,408 or below does not pay taxes.
If you like how Germany does their taxes, have a look at our video 15 Best Performing Governments in the World to see what else they’ve got right… or if you disagree, let us know.
5
The Netherlands
The Dutch are taxed on the following:
– Salaries, wages, benefits in kind, pensions, and property income.
– Income from business holdings.
– Savings and investments.
Each category has its own tax rates. Expatica.com highlights that “higher earners can expect substantial taxation on their salary.” High earners pay up to 49.5% in taxes, which is where its capped.
Here is the breakdown of the taxes in each category:
Earnings up to €68,507 are taxed at 37.1%, anything over is at 49.5%. They do have a tax credit of €2,837.
Substantial interest has a 25% tax imposed on it and lastly, savings and investments have a maximum tax rate of 31%.
Over and above national taxes, all citizens pay local taxes which include the following:
– property tax
– waste collection charges
– street cleaning/maintenance
– tourist tax
– sewerage tax
– movable property tax (e.g., houseboats, portable kiosks)
4
Belgium
Tax rates in Belgium are among the highest in Europe and has a top progressive rate of 50%. Any income derived, is taxable.
Included in that tax figure is the social security tax of 13.07% of their income.
Other taxes include property tax, gift tax, and inheritance tax.
Due to taxes being so high, Belgium has more than 90 agreements in place with other countries to prevent expats from having to pay even more taxes in their home country. They’ve also been upping their game in eradicating tax avoidance, and in 2019 managed to recoup €400 million in unpaid tax.
Municipal taxes are at 9% which is part of an individual’s income tax.
3
Slovenia
Income tax in Slovenia ranges from 16% to 50%. Residents get taxed on their worldwide income while expats get taxed on the income they source solely from Slovenia.
Here, there are 6 areas that get taxed including employment; business; agriculture and forestry; rent and royalties; dividends, interest, and capital gains; and “other.”
Taxes range from 16% for lower income earners right up to 50% for higher income tax earners.
Just recently, published on total-slovenia-news.com, it was mentioned that Slovenia would lower the “Tampon Tax” from 22% to 9.5%. This so called “Pink Tax” is one we’ve also covered extensively in our video, 15 Reasons Why It’s More Expensive to be a Woman, so be sure to check it out.
2
Denmark
This is one of the few countries where the citizens are happy to pay their high taxes. That should come as little surprise, considering they’re always in the top 5 happiest countries in the world.
So, why are the Danish happy to pay their high taxes, and why don’t the rich complain?
According to USnews.com, “people in the European country see taxes as an investment in their quality of life.”
In a country where happiness is how progress is measured, it’s important for the government to reduce risks and insecurities in people’s lives.
The average Dane pays around 45% tax. Danes pay national income tax, municipal tax, regional tax, labour market tax, and church tax.
According to Investopedia, Denmark’s progressive income tax tops out at 55.9%.
If you’re keen to spend a few nights in one of the happiest countries in the world, be sure to have a look into some of the most surreal accommodation options on Airbnb.
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1
Sweden
Aluxers, topping our list today is Sweden where tax tops at 60.1%.
As reported by the Guardian, “Swedes’ personal income tax can be as little as 29 per cent of their pay, but most people (anyone earning over £32,000) will pay between 49 and 60 per cent through a combination of local government and state income tax.”
When speaking to locals, the Guardian affirms how residents are happy to pay their high taxes. They quoted several taxpayers who said things like, “Most people trust the state to manage taxes well. There’s a broad, deep faith that the money going into the welfare state will be employed usefully,” or “I am very happy to pay high taxes because I know I am getting value for the money later on.’
Income above 675,700 kronor gets taxed 60.1%.
The beauty about income tax in Sweden is that education is free, and there are many other factors that also add value to the tax system.
Question:
Would you feel happy paying as much as $60.1% in income tax? We’d love to hear your thoughts.
