Taxation may be necessary from government’s perspective, but it is often a burden for taxpayers. Taxation takes away your hard earned money and is usually a complex, cumbersome process. Taxpayers usually have to hire a certified accountant to fulfill their tax obligations.
Ask taxpayers and most would be quite happy if their tax burden can be eliminated. Can that be done? Well, most nations in the world favor taxation. However, there are a few countries that have a tax-free governance structure. Here are some examples of countries where you don’t have to pay any taxes.
UAE – A federation of seven emirates, UAE comprises Abu Dhabi, Dubai, Sharjah, Umm Al Quwain, Ajman, Fujairah, and Ras Al Khaimah. One of the best things about UAE is that citizens don’t have to pay any income tax. So, how does the government generate revenue? Well, funds for the government are generated through corporate tax imposed on foreign banks and oil companies. UAE also levies excise tax on certain goods that are considered harmful to health and environment. Another income source for government is Value Added Tax (VAT), which is imposed on most goods and services.
Brunei – Located in Southeast Asia, Brunei is governed by a mix of Islamic practices, sharia law and English common law. There is no personal taxation for individuals. This rule applies to both residents and non-residents. However, individuals do have to contribute 5% of their salary income to Tabung Amanah Perkerja (TAP), which is a state managed provided fund system. Citizens and permanent residents of Brunei also need to part with 3.5% of their salary income to Supplemental Contributory Pension Scheme (SCP).
Bermuda – Considered a tax haven, Bermuda does not levy any income tax on individuals. Even companies incorporated in the country do not have to pay any corporate income tax. However, other taxes such as payroll tax, custom duties, import tax, land tax, and stamp duty have to be paid, as per applicable rates.
Bahamas – Another tax haven, Bahamas has provided exemption from various taxes such as personal income tax, corporate tax, inheritance tax and capital gains tax. This is why many high net-worth individuals have moved to Bahamas and settled there permanently. The government in Bahamas collects revenue from other sources such as import tax, property tax, consumption tax and license fees.
Monaco – Located along the French Riviera in Western Europe, Monaco does not charge income tax on its residents. People from other nationalities and French nationals have to pay taxes, as per applicable rates. For businesses also, there is no direct tax. However, they are required to pay tax on profits. Other sources of revenue for the government include fiscal stamps and registration fees.