These 10 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.

See: How To Avoid Paying Taxes Legally — and the 11 Craziest Ways People Have Done It

Find out which countries have lower tax rates than the U.S.

US Tax Rates

In 2017, the top marginal tax rate for individuals was 39.6%, 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% 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.

The top corporate tax rate in the U.S. in 2017 was 35%, but the tax law lowered the corporate tax rate to 21%, and it’s stayed that way since. Keep reading to see how these U.S. taxes compare to other countries’ taxes.

Get the Details: What Are the 2020-2021 Federal Tax Brackets and Tax Rates?

Chile

• Individual income tax rate: 35%
• Corporate tax rate: 25.5%

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%, according to KPMG. The lowest individual income tax rate in the U.S. is 10%. Chile is also one of the countries where residents pay less for healthcare than Americans.

Check Out: The 50 Cheapest Countries To Retire To

Mexico

• Individual income tax rate: 35%
• Corporate tax rate: 30%

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.

Read: 9 Legal Tax Shelters to Protect Your Money

Thailand

• Individual income tax rate: 35%
• Corporate tax rate: 20%

Thailand’s individual tax rate ranges from 0% to 35%, 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%
• Corporate tax rate: 26.5%

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%, compared with America’s 10%.

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%
• Corporate tax rate: 28%

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%
• Corporate tax rate: 19%

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.

Singapore

• Individual income tax rate: 22%
• Corporate tax rate: 17%

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%
• Corporate tax rate: 19%

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

Ukraine

• Individual income tax rate: 18%
• Corporate tax rate: 18%

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%.

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

Hungary

• Individual income tax rate: 15%
• Corporate tax rate: 9%

Hungary has one of the lowest corporate tax rates in the world, according to Tax Foundation. It’s also one of the countries with the lowest taxes for individuals.

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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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