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Highest Income Tax Rate Countries – Top 10 List

In this world, nothing can be said to be certain – except death and taxes.  —>  Benjamin Franklin

This sardonic proverb is well known and appreciated all over the world, especially by those who are paying taxes on their income. That the tax man (or woman – why not!) is compared to the grim reaper is a tribute enough to the fear and resignation that income taxes have inspired in the minds of one and all. Most of the otherwise honest tax payers have great difficulty in understanding the rationale of parting with their hard earned money for whatever purpose income taxes purport to fulfill.

Most of the countries impose some form or other of taxes on the income of their denizens – be they citizens or residents, or ordinarily residents, non-ordinarily resident or non-residents (or how ever the tax authorities chose to describe heir hapless victims!). However, there are some countries where the income tax rate are zero. Yes, you heard that right – ZERO!! I will publish a list of zero income tax countries too – very soon. Just remember to come back here!

Income Tax Rates

Another class of countries exists, which are called tax havens or tax haven countries. They are almost heaven for those who are earning a great deal of money, and are, therefore, liable to pay a great deal of taxes. In a tax haven country, the rate of income tax is very low, sometimes zero. This means that if you are based in a tax haven, you can take home most of what you have earned in whatever way – that tax man won’t bother you at all – or not much, at any ‘rate’!

This article is not about those tax havens, or about zero income tax countries. This article is about those countries which impose the MAXIMUM amount of taxes on the income of their denizens. Wherever you live, you will certainly hear people complaining about how the income taxes are killing them, how the income taxes are usurious, how the income taxes are taking away most of their hard earned income and so on. Even you, yourself,  might be one of those doing the complaining – I do so frequently! In that case, you can take consolation from reading this list. And, if you you are LIVING in one of the countries that figure in this list, then well, what can I say!

Before I give you the list of countries with highest income tax rates, I will like to clarify the following points -

>> These are the highest marginal tax rates – most of the countries have progressive taxes, i.e., lower tax rates at low income level, and increasing gradually with increasing income.

>> The rates mentioned here are the individual tax rates – there are other types of taxes on income also – such as corporate income taxes and VAT etc. To get a complete picture about the taxation level in a country, you should know all the different types of taxes in force there.

>> The income tax rates mentioned in the article are as of 2009. They may change from year to year.

>> High income taxes do not always imply BAD, and conversely, low income tax rates do not always imply GOOD.

Highest Income Tax Countries List

So, ladies and gentlemen, now that I have rid myself of the caveats, here is the list. The list is arranged in the reverse chronological order, going from lowest to highest.

10. Australia, Cape Verde, China, Croatia  —–> 45%

9. Israel ——> 46%

8. Canada ——> 48.25%

7. Austria, Belgium, Cuba, Senegal ——> 50%

6. Finland ——> 51.5%

5. Netherlands —–> 52%

4. Aruba —–> 58.95%

3. Denmark —-> 59%

2. Sweden —-> 59.17%

1. Chad —-> 60%

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4 Responses

  1. @Siddharth Singh
    Your correlations are pretty decent, but its flawed for one country. Chad is probably one the most poorest and corrupt countries in the world.

  2. @vicky, JWR,

    Thanks for your comments.

    To put things in proper perspective, I must point out that there is another side to the apparently high tax rates. Let me explain.

    Take a closer look at the list – what do you notice?

    Almost all of the countries (except maybe one or two) in the list are also the most highly developed countries, not only on economic parameters, but also on the more qualitative Human Development parameters. So, is there a correlation?

    To complete the picture, one should also consider what a tax payer gets in return for such high rates. OK, say I am taxed at 50%, but in return, I get excellent roads, assured electricity supply, clean water supply, good public transport, good policing (law and order), social security and good public healthcare, I will be happy to pay.

    But if I am taxed at 30%, and do NOT get any of these things, I will be compelled to arrange for them on my own. OK, I can’t get a decent police, so I am forced to pay for watchmen and security guards, I do not get clean water in taps, so I am forced to purchase bottled water, and so on.

    In the end, who is to lose?

  3. thank god i am not living in any of the top taxing counteries….paying 50-60% of ur income as tax…Unbelievable

    • Heheh yhea that is kinda odd to work for 6 months for the government and after that start working on your own income. However there are a lot of deducts that make life bearable like I get also 52% of my mortgage back and that is good news. In general after all the deducts it is usually only 30% one pay in taxes. But than again that is only if you got yourself a good tax adviser