This article will examine 5 countries with the highest taxes on high incomes. If you want to go through our detailed analysis on the taxation trends and outlook, you can go through a more extensive list and head straight to our article on 15 Countries That Have The Highest Taxes on High Incomes.
5. Sweden
Top income tax rate: 52.3%
In Sweden, employment income is taxed based on rounded taxable income amounts. For the year 2023, there is no national income tax for taxable income up to approximately $60,122, but a 32% municipal income tax applies. Taxable income exceeding the above-mentioned amount is subject to a 20% national income tax and 32% municipal tax.
Non-residents working in Sweden for a Swedish or foreign employer with a permanent establishment are taxed at a flat rate of 25%. Non-residents working for a non-Swedish employer without a permanent establishment are liable for a 25% tax rate, with exceptions for short-term stays.
4. Austria
Top income tax rate: 55%
All individuals residing in Austria must pay Austrian income tax on their worldwide income, including income from trade or business, profession, employment, investments, and property. Non-residents are taxed on income from certain sources in Austria only. Non-residents are subject to income tax on Austrian-source income at normal rates.
3. Denmark
Top income tax rate: 55.9%
Taxation in Denmark can be categorized into full tax liability, limited tax liability, special expatriate rules, or rules related to workforce hiring. Residents in Denmark fall under full tax liability, meaning they are taxed on their global income unless they are considered tax residents of another country under a double taxation treaty (DTT).
2. Japan
Top income tax rate: 55.97%
In Japan, permanent residents are taxed on their worldwide income, while non-residents are taxed only on their Japan-sourced income. A surtax of 2.1% is imposed on an individual’s national income tax. Local governments levy local income taxes of 10% based on the previous year’s income.
Non-residents pay a flat 20.42% national income tax on Japan-source compensation, including the surtax. If registered as residents, they may also be subject to a 10% local inhabitant’s tax.
1. Finland
Top income tax rate: 56.95%
In Finland, residents are taxed on their worldwide income, while non-residents are taxed only on their Finnish-source income. There is a public broadcasting tax of 2.5% on income exceeding $15,690.
Non-resident individuals are subject to various tax rates, including 35% on employment income and 30% on dividends, interest, and royalties. The foreign expert tax regime provides a flat 32% rate for eligible foreign employees. Non-residents can choose between fixed tax at source or progressive taxation. Artists and sportspeople face a 15% tax on their earnings. Rental income is taxed at rates of 30% or 34%.
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