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What countries have the lowest taxes?
Check out our top 10 least taxed countries in the world. The most attractive destinations to save, live and work from abroad.
If you’re planning your next trip and wondering which are the least taxed countries in the world and those destinations where the tax burden is high, check this list and find out with Holafly which are the best options to live and work in terms of benefits and tax burdens, as this directly affects your income and wealth.
Top 10 Lowest Taxed Countries in the World
The attractiveness of lower tax countries lies in the possibility of saving on tax contributions, as well as the benefits they offer to digital nomads and travellers, such as special visas and quality of life.
At Holafly, we’ve prepared this material where we tell you about the tax systems of ten countries with the lowest tax rates and how their policies can favour remote workers.
10. Costa Rica
Costa Rica has implemented a territorial tax system, where residents are only taxed on income earned within the country. Personal tax rates range from 10% to 25%, and those with foreign income are exempt from taxation.
If you’re a digital nomad generating income on-line and want to reside in a tropical country with high standards of sustainability, quality of life, low tax rates and a friendly environment this is a desirable place for you.
9. Ecuador
Ecuador is a country that has a simplified tax regime for small businesses and entrepreneurs, promoting economic activity; it offers an affordable cost of living and a favourable tax policy for foreigners.
Residents, including digital nomads, aren’t taxed on income earned outside the country.
The tax rate in Ecuador varies from 5% to 35% for income above certain thresholds. For residents earning income outside Ecuador, the rate is 0%, i.e. they aren’t obliged to declare global income.
8. Croatia
Croatian personal income tax rates can reach up to 30% depending on the level of income. However, for digital nomads under their special visa, the tax on income earned outside Croatia is 0%, which makes it easier to live and work in a European environment without the pressure of a high tax burden.
7. Curaçao
Income tax rates may vary, but digital nomads and foreign residents have an exemption on global income. Rates for locally generated income can be as high as 10-25%, but don’t apply to most remote workers operating from outside the island.
This policy seeks to encourage the flow of foreign professionals and capital to the island, and the government has facilitated residency programmes to further attract remote workers attracted by the Caribbean beaches.
6. Dominica
Dominica doesn’t tax global income, which means that digital nomads pay nothing on their earnings outside the country. For income generated within Dominica, the rates are relatively low at around 15-25%.
5. Cape Verde
Cape Verde is an archipelago in the Atlantic where income tax rates range from 10% to 30%, but foreigners are exempt from paying taxes on foreign income.
This tax system, coupled with residency programmes that promote investment and skilled immigration, positions Cape Verde as an emerging destination for those seeking to work in a sunny, multicultural environment without worrying about high taxes.
4. Monaco
Monaco is famous for not imposing income tax on its residents. Although the cost of living is high, the lack of income taxation makes the tiny principality a magnet for businessmen and celebrities.
For digital nomads who can afford to live here, Monaco offers the opportunity to save huge sums of money thanks to its tax policies.
Monaco finances its economy through other means, such as tourism and luxury industries, allowing its residents to enjoy high quality services without the burden of personal taxation.
3. Bermuda
Bermuda doesn’t impose personal income or capital gains taxes. However, there are high living costs and import tariffs that can influence overheads.
The island also offers work permit programmes designed to attract remote workers.
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2. United Arab Emirates
The United Arab Emirates, with prominent cities such as Dubai and Abu Dhabi, are well known for their zero personal income tax policies.
This tax system has been set up to attract both corporate and high-profile expatriates. The UAE has diversified its economy beyond oil, encouraging foreign investment and offering high-quality services and business opportunities.
Despite this, in 2023, they introduced a 9% corporate tax on corporate profits above certain thresholds. For digital nomads who don’t have a corporate income, the personal income exemption remains an important advantage.
1. Bahamas
The Bahamas stands out as one of thelowest taxed countries in the world. The main reason for this is that the tax rate on income and capital gains is 0%.
This tax approach applies to both local and foreign residents, making it an ideal tax haven for digital nomads seeking to protect their entire income.
Residents and workers don’t have to pay tax on income generated inside or outside the country. This tax policy allows individuals to keep more of their earnings without the burden of direct income taxes.
Although the Bahamas relies on indirect taxes to finance its operations, such as the 12% Value Added Tax (VAT) , as well as some property taxes, these are lower than the direct taxes levied in other countries.
| Country | Income Tax | Corporate tax | Notes |
| Bahamas | 0% | 0% | No income and capital profits taxes are levied. |
| United Arab Emirates | 0% | 9% | Zero personal taxes; corporate taxes apply to large companies. |
| Bermuda | 0% | – | There are no taxes on personal income or capital gains. |
| Monaco | 0% | – | No personal income tax is levied. |
| Cape Verde | 10% – 30% | – | Tax exemption on foreign income for foreign residents. |
| Dominica | 0% | – | No taxes are levied on the overall income. |
| Curaçao | 10% – 25% | – | Tax exemption for income generated outside the country. |
| Croatia | Digital Nomad Visa | – | Tax exemption for income earned outside the country. |
| Ecuador | 5% – 35% | – | Global income tax exemption. |
| Costa Rica | 10% – 25% | – | Territorial tax system that doesn’t tax foreign income. |
Top 10 Highest Taxed Countries in the World
Now that we’ve shown you some of the countries with the lowest tax rates, it’s time to get to know the countries with the highest tax rates as well.
If any of these destinations are on your list of future trips, it’s important that you’re well informed about the tax conditions to which you may be subject, so that you can better plan your budget and avoid surprises.
10. Ireland
Ireland stands out for its high personal income tax rate (52%) at the highest levels, which helps fund advanced social services and quality education.
9. Finland
The tax system in Finland is progressive and supports a welfare system that includes free education and robust health care. Tax rates are around 51.6%.
8. Sweden
Sweden is known for its high taxes, which are one of the highest tax burdens in Europe, with a top income tax rate of 57%.
In return, the country offers universal public services, a robust social infrastructure and access to high-quality health care and education.
Taxes in Sweden are intended to finance a comprehensive social welfare system that covers everything from child care to pensions and unemployment benefits.
Taxes are applied progressively: The higher the income, the higher the rate. This creates a more equitable distribution of wealth, while ensuring that citizens have access to essential services at no additional cost.
7. Denmark
Denmark has one of the most comprehensive and highest tax systems in the world. The top tax rate of 55.8% is a reflection of the country’s high tax burden, which finances its generous welfare state.
Residents of Denmark enjoy social benefits such as free education, housing subsidies, assistance for people with disabilities and a universal health care system.
Most taxes are spent on social security, pensions and a quality health care system, which makes the high percentage justified by citizens.
Taxes include both personal income tax and corporate income tax.
6. The Netherlands
In the Netherlands, the tax system is progressive, which means that taxes increase as income increases. The maximum income tax rate is 49.5%, which applies to higher incomes.
This system makes it possible to finance a variety of public services, such as compulsory health insurance, student subsidies, and social support for the unemployed.
Taxes are also used to maintain a transport infrastructure and a social safety net.
Despite high tax rates, the country remains very attractive to digital nomads and expatriates due to its high quality of life and top-notch social services.
5. Japan
Japan has a tax rate of up to 55% for the highest income earners, which allows it to finance a robust social security system.
This system includes pensions, universal health care and unemployment benefits. In addition to income taxes, Japan also has a corporate tax system, as well as property taxes.
Japan’s also known for its high standards of social welfare and commitment to sustainable economic development.
4. Austria
In Austria, income taxes can be as high as 55%, which is one of the highest rates in Europe.
Austria’s social welfare system is financed through these taxes as well as housing subsidy and social assistance programmes.
Although the tax burden is high, Austrians enjoy an excellent quality of life and first-class public services.
3. Belgium
Belgium has a top tax rate of 50% for the highest income earners, which helps finance an extensive welfare system.
This system includes pensions, free medical care and social welfare services. In addition to income taxes, Belgium also levies taxes on capital gains, property and commercial transactions.
The high tax burden can be a challenge for those seeking to optimise their income. Nevertheless, the country remains one of the most advanced in terms of quality of life and social benefits.
2. Germany
In Germany, the tax system includes a maximum income tax rate of 47.5%, which applies to the highest income earners.
This tax burden is used to finance a far-reaching social welfare system that includes free higher education, universal health care and a robust pension system.
Germany also has value added tax (VAT) and capital gains tax. Despite the high tax burden, the country offers high quality public services and maintains one of the strongest economies in Europe.
1. France
France ranks first in Europe in terms of high personal and corporate taxes, and spends this revenue on a comprehensive welfare system that includes public health, unemployment benefits and pensions. The maximum income tax rate is more than 55%.
France’s tax model, although one of the most burdensome, reflects a philosophy of social support and economic redistribution.
Social security contributions are another important factor in France’s high level of taxation. These contributions, which can amount to as much as 20-25% of gross income, are essential to finance the health care system, pensions and unemployment benefits.
France also applies a Value Added Tax (VAT) of 20%, which is common in Western Europe. This tax is levied on most goods and services and represents an important source of revenue for the government, financing everything from public infrastructure to social development programmes.
Corporate tax is also significant, although it’s been reduced in recent years. In 2024, the general corporate tax rate in France is approximately 25%.
In the same vein, France has implemented a “Fortune Tax” that taxes high net worth individuals, although in 2018 it was replaced by the Real Estate Fortune Tax, which only applies to high-value properties.
| Country | Income Tax | Corporate tax | Notes |
| France | More than 55% | 25% | High welfare system with high personal and social security taxes. |
| Germany | 47.5% | – | High taxes that fund education and universal health care. |
| Belgium | 50% | – | Strong social welfare system, including pensions and public health. |
| Austria | 55% | – | Social benefits financed by high taxes. |
| Japan | 55% | – | Welfare system financed by high taxes. |
| The Netherlands | 49.5% | – | Progressive tax system that funds health, education and subsidies. |
| Denmark | 55.8% | – | Welfare state financed by high taxes. |
| Sweden | 57% | – | High welfare system and public benefits. |
| Finland | 51.6% | – | Financing of public services such as education and health. |
| Ireland | 52% | – | High taxes that support a social welfare system. |
High taxes in Europe and Japan may seem prohibitive, but they translate into significant benefits in terms of social services and quality of life.
As a digital nomad it’s very necessary for you to assess the impact of these fees on your overall income, especially if you plan to reside more than 183 days in a country, which could imply a full tax liability there.
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Frequently Asked Questions about countries with lower taxes
Low tax countries include the Bahamas, the United Arab Emirates, Bermuda and Monaco, where personal income and capital gains taxes do not apply. Costa Rica and Ecuador are also attractive options, with low tax rates for income earned within the country, and tax exemptions for foreign income.
A country’s tax system impacts the income and wealth of digital nomads. Countries with low or zero taxes, such as the United Arab Emirates or the Bahamas, allow remote workers to keep more of their earnings.
Low tax countries, such as Monaco or Bermuda, offer advantages such as the possibility of saving more money due to income tax exemptions.
Countries such as France, Sweden and Denmark have some of the highest taxes in the world, with rates exceeding 50%. In return, these countries fund advanced social welfare systems that include universal public health care, free education, generous pensions and unemployment benefits.
Residing in a high-tax country, such as France or Sweden, could mean that digital nomads are taxed on their global income if they spend more than 183 days a year in the country.
