These 17 Countries Pay Less in Taxes Than Americans

There’s no denying that taxes can take a big bite out of your income in the United States. In fact, the top individual and corporate tax rates in America are higher than the rates in many other countries. To pinpoint where the tax bite is smaller, GOBankingRates used data from tax advisory service KPMG on individual and corporate tax rates around the world.

Click through to find out which countries have lower tax rates than the U.S.

U.S. Tax Rates

In 2017, the top marginal tax rate for individuals was 39.6 percent, and it hit single taxpayers with an income of $418,400 and higher and married taxpayers with a combined income of $470,700 or higher, according to the Tax Foundation.

However, the Tax Cuts and Jobs Act lowered the top rate to 37 percent in 2018. And that rate applies to single taxpayers with a taxable income of $500,000 or higher and married couples filing jointly with an income of $600,000 or higher, according to the Tax Foundation.

For the purposes of this study, 2017 tax rates were used. The top corporate tax rate in the U.S. in 2017 was 35 percent, according to Forbes. The new tax law lowered the corporate tax rate to 21 percent starting in 2018, according to the Tax Foundation. Keep reading to see how these U.S. taxes compare to other countries’ taxes.

Chile

Individual income tax rate: 35 percent

Corporate tax rate: 25.5 percent

Chile’s highest individual tax rate isn’t much lower than the top rate in the U.S. However, like the U.S., Chile has a progressive tax rate, and the lowest rate is 0 percent, according to KPMG. The lowest individual income tax rate in the U.S. is 10 percent. Chile is also one of the countries where residents pay less for healthcare than Americans.

Mexico

Individual income tax rate: 35 percent

Corporate tax rate: 30 percent

America’s neighbors to the south pay less in both individual and corporate taxes. Residents of Mexico also pay less for healthcare than Americans do.

Thailand

Individual income tax rate: 35 percent

Corporate tax rate: 20 percent

Thailand’s corporate tax rate in 2017 was nearly half the U.S. rate. The country’s individual tax rate ranges from 0 percent to 35 percent, which is only slightly lower than the top U.S. individual rate. Thailand’s income tax rate was about 5 percentage points higher than the average rate in Asia, according to KPMG.

Canada

Individual income tax rate: 33 percent

Corporate tax rate: 26.5 percent

America’s neighbors to the north face a smaller tax bite. Canada’s top individual tax rate is about 7 percentage points lower than America’s top rate. However, the lowest rate is 15 percent, compared with America’s 10 percent.

In addition to benefiting from Canada’s lower tax rate, the country’s residents have a lower cost of living than Americans do, another GOBankingRates study found.

New Zealand

Individual income tax rate: 33 percent

Corporate tax rate: 28 percent

Although nearby Australia has a higher tax rate than the U.S., New Zealand taxpayers have a lower tax rate than Americans do. Plus, residents don’t have to file an annual tax return if their income is from employment, interest or dividends and the correct amount of tax was withheld during the year, according to KPMG.

Poland

Individual income tax rate: 32 percent

Corporate tax rate: 19 percent

One of the cheapest countries to live in, Poland’s top individual and corporate tax rates are lower than America’s. The Polish also pay less in taxes than many of their European neighbors. The average individual income tax rate in Europe in 2017 was nearly 35 percent, compared with 32 percent in Poland. In the European Union, of which Poland is a member, that number was just more than 38 percent.

Kenya

Individual income tax rate: 30 percent

Corporate tax rate: 30 percent

As in the U.S., Kenya’s lowest individual income tax rate is 10 percent. But the African nation’s top rate of 30 percent was significantly lower than America’s top rate of 39.6 percent in 2017.

Slovak Republic

Individual income tax rate: 25 percent

Corporate tax rate: 21 percent

The top tax rate in this central European country that once was part of Czechoslovakia is nearly 15 percentage points lower than the top rate in the U.S. However, the country’s lowest tax rate is 19 percent.

Find Out: Top 10 Most Expensive States to File Taxes

Nigeria

Individual income tax rate: 24 percent

Corporate tax rate: 30 percent

Nigeria is the only country on our list with a corporate tax rate that’s higher than the individual income tax rate. The country’s 30 percent corporate tax rate also is higher than the average rate in Africa, which was about 28 percent in 2017. But it still was lower than the America’s corporate tax rate in 2017.

Albania

Individual income tax rate: 23 percent

Corporate tax rate: 15 percent

Not only is Albania’s corporate tax rate lower than America’s, it is lower than the worldwide average of nearly 23 percent, according to Tax Foundation. The top individual rate in Albania is significantly lower than the top rate in the U.S., and the lowest rate is 0 percent.

Latvia

Individual income tax rate: 23 percent

Corporate tax rate: 15 percent

Once part of the Soviet Union, Latvia now is part of the European Union. But its individual income and corporate tax rates are lower than the EU average rates — not to mention the U.S. rates.

Singapore

Individual income tax rate: 22 percent

Corporate tax rate: 17 percent

This Asian country is more tax-friendly than the U.S. It’s also considered one of the most notorious tax havens in the world. Plus, its individual and corporate tax rates are lower than the average rates in Asia.

Czech Republic

Individual income tax rate: 22 percent

Corporate tax rate: 19 percent

The Czech Republic has a 15 percent flat-tax rate on individual income. However, it also assesses a 7 percent solidarity tax on income.

Estonia

Individual income tax rate: 20 percent

Corporate tax rate: 20 percent

Estonia’s 20 percent individual income tax rate is a flat-tax rate. So, unlike in the U.S., where lower rates apply to lower income brackets, Estonia’s rate applies to all income.

Ukraine

Individual income tax rate: 18 percent

Corporate tax rate: 18 percent

This former Soviet republic has a lower individual income tax rate than both the United States and the average rate in Europe. But its neighbor, Russia, has an even lower rate — 13 percent.

Did You Know? These Are the Most (and Least) Tax-Friendly States for Retirees

Serbia

Individual income tax rate: 15 percent

Corporate tax rate: 15 percent

Not only does Serbia have an individual tax rate that is significantly lower than America’s, it is one of the countries with the lowest taxes. Its corporate tax rate is lower than America’s and the worldwide average of 22.96 percent, according to Tax Foundation.

Hungary

Individual income tax rate: 15 percent

Corporate tax rate: 9 percent

Hungary has one of the lowest corporate tax rates in the world, according to Tax Foundation. It’s about one-fourth of the corporate tax rate in the U.S., which had one of the highest rates in the world in 2017. Hungary also is one of the countries with the lowest taxes for individuals.

Up Next: These 15 Countries Pay More in Taxes Than Americans

Methodology: All individual income and corporate tax rates assume the top marginal tax rate for 2017. All tax rates were sourced from KPMG.

About the Author

Cameron Huddleston

Cameron Huddleston is an award-winning journalist with more than 18 years of experience writing about personal finance. Her work has appeared in Kiplinger’s Personal Finance, Business Insider, Chicago Tribune, Fortune, MSN, USA Today and many more print and online publications. She also is the author of Mom and Dad, We Need to Talk: How to Have Essential Conversations With Your Parents About Their Finances.

U.S. News & World Report named her one of the top personal finance experts to follow on Twitter, and AOL Daily Finance named her one of the top 20 personal finance influencers to follow on Twitter. She has appeared on CNBC, CNN, MSNBC and “Fox & Friends” and has been a guest on ABC News Radio, Wall Street Journal Radio, NPR, WTOP in Washington, D.C., KGO in San Francisco and other personal finance radio shows nationwide. She also has been interviewed and quoted as an expert in The New York Times, Chicago Tribune, Forbes, MarketWatch and more.

She has an MA in economic journalism from American University and BA in journalism and Russian studies from Washington & Lee University.

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