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Income taxes are collected by most governments, to generate revenue in a given country. This revenue is then used to provide services and build infrastructure for the country's citizens. But no one wants to pay more tax.
To rank the countries with the lowest income tax rates in the world, Yahoo! Finance considered three metrics: personal income tax rate, corporate income tax rate, and GDP per capita (PPP). The key metric is, of course, the personal income tax rate. But where countries have a similar rate, they are ranked based on their corporate income tax rate. If both of these metrics are also the same between countries, the country’s GDP per capita, as of 2024, has been used to rank them.
Intrigued? Click on to discover the countries with the lowest income tax rates in the world.
Personal Income Tax Rate: 10%
Corporate Income Tax Rate: 20%
GDP Per Capita: US$34,480
With a 10% top personal income tax rate and a 20% top corporate income tax rate, Kazakhstan opens the list at #20. Its economy is one of the fastest growing in Central Asia.
Personal Income Tax Rate: 10%
Corporate Income Tax Rate: 16%
GDP Per Capita: US$43,750
The renewable energy, transportation, finance, and IT sectors greatly contribute to Romania's high GDP per capita.
Personal Income Tax Rate: 10%
Corporate Income Tax Rate: 10%
GDP Per Capita: US$3,710
Timor-Leste, in Southeast Asia, has one of the lowest rates of income tax and corporation tax in the world.
Personal Income Tax Rate: 10%
Corporate Income Tax Rate: 10%
GDP Per Capita: US$16,270
One in four people is poor and two out of three workers have no social protection in Paraguay, where both the income and corporation tax rates are low.
Personal Income Tax Rate: 10%
Corporate Income Tax Rate: 10%
GDP Per Capita: US$16,760
Limited tax revenues hamper the government's ability to address economic cycles in Kosovo, according to the World Bank.
Personal Income Tax Rate: 10%
Corporate Income Tax Rate: 10%
GDP Per Capita: US$20,730
Those earning low wages face a high relative tax rate in comparison to workers earning average wages in this Balkan nation.
Personal Income Tax Rate: 10%
Corporate Income Tax Rate: 10%
GDP Per Capita: US$22,580
Favorable income taxation has been designed to attract foreign investment to North Macedonia.
Personal Income Tax Rate: 10%
Corporate Income Tax Rate: 10%
GDP Per Capita: US$35,850
At 10%, Bulgaria has one of the EU's lowest personal income tax rates, significantly lower than the average rate across the trading bloc.
Personal Income Tax Rate: 10%
Corporate Income Tax Rate: 8%
GDP Per Capita: US$20,550
In Turkmenistan, the personal income tax system involves a flat tax rate of 10% for individuals, while the standard corporate tax rate for resident companies is just 8%.
Personal Income Tax Rate: 7%
Corporate Income Tax Rate: 25%
GDP Per Capita: US$11,000
The tax system of Guatemala is a unitary system. This means all kinds of individual income, other than capital gains, is lumped together and subject to a single tax of 7%.
Personal Income Tax Rate: 0%
Corporate Income Tax Rate: 55%
GDP Per Capita: US$76,860
Brunei does not currently levy any income tax on individuals. There is no sales tax or value added tax (VAT), while corporations are taxed at the rate of 22% or 55%.
Personal Income Tax Rate: 0%
Corporate Income Tax Rate: 20%
GDP Per Capita: US$71,370
Saudi Arabia has a zero personal income tax rate and a 20% corporate income tax rate, making it one of the most favorable regimes in the world for individuals and businesses.
Personal Income Tax Rate: 0%
Corporate Income Tax Rate: 15%
GDP Per Capita: US$40,020
There's currently no personal income tax rate law enacted in Oman, where the statutory rate of tax for corporations sits at 15%.
Personal Income Tax Rate: 0%
Corporate Income Tax Rate: 15%
GDP Per Capita: US$53,760
A small island country, Kuwait has one of the world's strongest economies. The country has a zero personal income tax rate and a flat 15% corporate income tax rate.
Personal Income Tax Rate: 0%
Corporate Income Tax Rate: 10%
GDP Per Capita: US$118,150
Qatar is one of the richest countries in the world. The GDP per capita is US$118,150, where individuals pay zero income tax. Headline corporation tax is at a rate of 10%, however, petroleum companies are subject to a minimum 35% tax rate.
Personal Income Tax Rate: 0%
Corporate Income Tax Rate: 9%
GDP Per Capita: US$92,950
One of the wealthiest countries in the world, the UAE has a flexible tax rate that has attracted many start-up businesses in recent years.
Personal Income Tax Rate: 0%
Corporate Income Tax Rate: 0%
GDP Per Capita: US$46,300
There are no taxes on personal or corporate income in the Bahamas, where GDP per capita is US$46,300.
Personal Income Tax Rate: 0%
Corporate Income Tax Rate: 0%
GDP Per Capita: US$62,750
Bahrain ranks third in this countdown of the lowest income tax rates in the world. Individuals and non-oil sector corporations do not pay taxes in the country. However, oil companies operating in Bahrain must pay a minimum corporation tax of 46%.
Personal Income Tax Rate: 0%
Corporate Income Tax Rate: 0%
GDP Per Capita: US$99,624
With no tax on individual or corporation income, and a GDP per capita of US$99,624, the Cayman Islands ranks second on this list.
Personal Income Tax Rate: 0%
Corporate Income Tax Rate: 0%
GDP Per Capita: US$118,774
The top spot goes to Bermuda, whose zero rate of taxation on individual and corporation income is further offset by a GDP per capita of US$118,774.
Sources: (Yahoo! Finance) (Insider Monkey) (World Bank) (OECD iLibrary) (IMF) (PwC)
See also: The 30 freest countries in the world
These are the countries with the lowest income tax rates
Where the gap between gross and net pay is smaller
LIFESTYLE Taxation
Income taxes are collected by most governments, to generate revenue in a given country. This revenue is then used to provide services and build infrastructure for the country's citizens. But no one wants to pay more tax.
To rank the countries with the lowest income tax rates in the world, Yahoo! Finance considered three metrics: personal income tax rate, corporate income tax rate, and GDP per capita (PPP). The key metric is, of course, the personal income tax rate. But where countries have a similar rate, they are ranked based on their corporate income tax rate. If both of these metrics are also the same between countries, the country’s GDP per capita, as of 2024, has been used to rank them.
Intrigued? Click on to discover the countries with the lowest income tax rates in the world.