15 Countries Ruining Their Citizens With Really High Taxes
One of the responsibilities of a citizen is paying taxes. In exchange for residency and employment, the government requires all citizens to pay their taxes to sustain the needs of the country and support all its projects financially.
Taxes serve their purpose, most of the time. They are used to budget the construction of infrastructures such as bridges, roads, buildings, power plants, transportation systems, etc. Usually, these are for the medical, social, and education benefits of the less fortunate. Taxes are also paid service our fellow citizens.
Though, where was the origin of these taxes? According to the Association of Municipal Assessors of New Jersey (AMANJ), the earliest record of taxes was found in Iraq. It was written on tablets made of clay, kept to a minimum just for everyone to contribute to society, yet it was increased in times of struggle and hardship.
Taxes have three major types, namely income taxes, property taxes, and sales taxes. Income taxes are imposed based on an individual’s salary. The property taxes are for the land where the property is located. Lastly, the sales taxes are for the goods sold and services offered.
However, there are countries, especially flourishing ones, that demand higher taxes to keep their dreams afloat and stabilize their economy. Despite the high costs, the money of the citizens, gained from hard work, is put to good use since the innovation and improvement can be witnessed in these countries. Most are first and second world countries. Here are 15 countries around the world where citizens pay the highest taxes.
15. Belgium: Pays for More then Just Chocolate
Belgium has one of the highest tax rates in Europe. Residents who earn 53,000 dollars and above have a tax rate of around 54 percent. They are compelled to pay property, sales, gift, and inheritance taxes. Though, who are classified as residents in Belgium? For one, you are already a resident when your family’s home or workplace is in Belgium. Or, if you have lived at least six months in the country and registered, you are also considered residents of Belgium. However, if you have only resided for less than six months, you will only pay the taxes earned in Belgium. It seems as if you are not exempted from paying taxes whatever your social status in Belgium!
14. Portugal has em’ High
To be a taxed resident of Portugal, you must stay for more than 183 days in the country. Yet, there are other factors to become a taxed resident, like you have permanent residence in Portugal on December 31st in that tax year, the head of the household is a taxed resident, and you work for the Portuguese government. What kind of “benefits” can you get from being a taxed resident? Well, when your income is more than 80,000 Euros, you must pay taxes at 48 percent whereas when it is less than 7,035 Euros, you need to pay 14.5 percent. There is a consideration when one is underprivileged since he or she will pay fewer taxes.
13. You Can’t Hide from The Tax of France
French workers pay the most taxes among other European workers. In France, the collection of taxes can reach a rate up to 45 percent when the income is more than 151, 261 Euros and none when the income is 9, 710 Euros or less. Your income in France and abroad are both taxed. As an expatriate, you also need to file a French tax return. For non-residents, the French tax rate is at 20 percent. As a result, there are around 10,000 workers who decided to move to countries that impose lower taxes. President Emmanuel Macron assured that he will change some tax policies for people to stay in the country and not look for greener pastures.
12. Israel Trying to Give Back
Israel imposes a maximum income tax rate of 50 percent that starts at 10 percent. The 10 percent tax rate is applied to those who make 62, 640 and below New Israeli Shekel (NIS) when one NIS is equivalent to 0.29 US Dollar. When you earn 803, 521 NIS or more, you need to pay a 50 percent tax rate.
The Israeli government considers this tax negotiation to provide services and benefits to its residents. It is a partnership between the residents and the government to sustain the needs of the country and its people. This is also to redistribute the wealth and share with the less fortunate.
11. More of the Same in Slovenia
Like other countries, Slovenia has a policy that you are a tax resident when you have lived in the country for more than 183 days. Those with a 8,021 Euros income only have 16 percent tax rate whereas those earning more than 70, 907 Euros of income are subjected to 50% tax rate.
Also like other countries, because of the amount of taxes collected, Slovenia provides free education up to Ph.D. degree, if possible. The government also prioritizes the health of residents with health care insurance available in other countries. There are also paid maternity and paternity leaves and 30 days or more of paid vacation.
10. Italy: Too Many To Keep Track
A few years ago, the Italian treasury minister Vincenzo Visco planned to categorize the income rates into two – 23 percent for incomes that are less than 120,000 dollars and 33 percent for more than 120,000 dollars. However, it was not successfully executed, especially when he quit. Presently, for high-earners in Italy, the income tax rate can reach up to 43 percent!
As a recommendation before starting a business, one must seek a tax accountant for there are many taxes in Italy, such as the imposta sul reddito (income tax), the imposta sulle società (corporate tax), the imposta sul valore aggiunto (VAT or sales tax), the imposta sui servizi (tax on services), and the accise (excises).
9. Turkey’s Trying to Keep it Simple…
Turkey has its own tax policies like other European countries. Income taxes in Turkey are divided into two categories, namely individual income tax and corporate income tax. Income taxes are applied to business profits, agricultural profits, salaries, wages, rental income, etc. The individual income taxes range from 15 percent to 35 percent. For non-residents, only money earned in Turkey is subjected to income tax. As for corporate income taxes, these are defined as capital companies, cooperatives, joint ventures, public economic enterprises, etc. Though, Turkey has other types of taxes including special consumption tax, banking, and insurance transaction tax, and stamp tax.
8. Denmark is the Cleanest for a Reason!
Denmark is a member of the Organization for Economic Cooperation and Development (OECD). It is an organization with 35 developing and advanced countries including Germany, Japan, Korea, the United States of America and the United Kingdom.
In 2012, Denmark surpassed Belgium and Sweden in the ranking of top income rates in the OECD with a 60.2 percent tax rate if the income is over 55,000 dollars. According to a Gallup survey, almost nine out of ten Danish people pay their taxes without remorse. This is because paying greater taxes means investing in a better quality of life. For instance, free education at the university level and stipends are provided to students. Also, there is free health care to residents.
7. It Pays to be Poor in Austria
Sometimes, we get the idea that we should just earn less in a country like Austria, even if it goes below the poverty line. In Austria, there is no income tax when you only earn 11,000 Euros. When you earn more than that but less than 1,000,000 Euros, you should expect a tax rate between 25 to 50 percent. When you receive an income of over 1,000,000 Euros, you have a 55 percent tax rate. Moving on to corporations, they are automatically subjected to a 25 percent tax rate. As for Value Added Tax (VAT), the standard rate is 20 percent and 13 percent is for the rent of land and buildings in 2016. There is no tax applied to traded goods and services.
6. Big in Japan?
Japan has different types of taxes, namely income, enterprise, property, consumption, vehicle-related, liquor, tobacco, and gasoline taxes.
The national income tax rates range from 5 percent up to 45 percent. Focusing more on income taxes, Japan has divided the residents or visitors into three categories: non-residents, non-permanent residents and permanent residents. Each category consisted of restrictions and rules. For non-residents, they are only required to pay taxes based on their income in Japan. For non-permanent residents, they pay taxes based on all incomes, but not those that do not enter Japan. For permanent residents, they pay taxes based on incomes in Japan and overseas.
5. Fuelling the Fire of the United Kingdom
The United Kingdom has the longest tax code since 2009, but let us make it simpler. The UK government is mostly fueled by income taxes, followed by national insurance contributions, value-added tax (VAT), and cooperation taxes.
The income tax rate can reach more than 45 percent for those that make more than 150,000 pounds, but there is a “personal allowance” of 11,500 pounds that is tax-free. It goes back to the Napoleonic wars in the 1800s and presented in 1842 again for the benefit of the country and its people. However, it is a bit risky for the UK to raise its tax rates for it may increase poverty in the country and unemployment.
4. Luck of the Irish?
Ireland centers around corporate taxes more than other taxes with a 12.5 percent tax rate. In 2016, the government collected around 46.6 billion dollars from corporate taxes. There is an additional 6.25 percent for the patent and intellectual property of the corporation. Nevertheless, they also fund other projects such as researches from the taxes. For instance, residents must pay 25 percent tax more to develop and work on start-ups. Because the Industrial Development Agency (IDA) supports the foundation of corporations and businesses, Ireland is considered pro-business and not bureaucratic. Also, it offers one of the lowest costs of living, which includes the rent, salaries, insurances, and materials costs in Europe.
3. The Netherlands Are Heavily Organized
The Netherlands is well known for encouraging residents to be cyclists. However, bicycles are not the only things that whirl around in the country, so do taxes that reach up to 52 percent tax rate.
Taxes in the Netherlands are divided into categories, namely income taxes, municipal taxes and levies, waste collection levy, water taxes, road taxes, parking taxes, boating taxes, tourist taxes for short-term rentals, and dog taxes. For income taxes, there are even three (3) boxes for work and dwellings, substantial interest rates, and savings and investments. However, there is a 30 percent ruling that states that expatriates are exempted from Dutch tax since the government usually charges 30 percent of their salary. Thus, if permitted, the employer shall pay the 30 percent and give you 100 percent of your salary.
2. Sweden’s Taxes Give Back
Starting from their birth, they are already given a short introduction in paying taxes since residents of Sweden are given personal identification numbers that they will use in the future.
Sweden composes of around 10 million people who pay a local tax rate of around 29 percent to 35 percent, but residents are not bothered since they know that their taxes are also for their benefit. As long as their taxes contribute to a well-functioning and high-class society, they are okay with it because they can use its facilities efficiently and they know that they are safe. In fact, tax or skatt means treasure. Surely, the residents tolerate paying taxes, especially when the progress and innovation of their country can be witnessed evidently, being one of the happiest countries in the world.
1. Finland: Do the Benefits Justify the Amount?
Residents of Finland are subjected to 34 percent income tax on capital income when their income exceeds 30,000 Euros whereas non-residents need to pay the same taxes at 34 percent when their income tops 40,000 Euros. Just like other countries on this list, Finland offers a wide variety of efficient services and benefits. For example, the government provides free education, health care, bus services, disability benefits, and maternity and paternity leaves. Though they must improve some of their services due to the complaints of residents, their government still provides the least stressful ways to live as compared to countries that are drowning in poverty and corruption.