Income tax is a tax that governments impose on income generated by businesses and individuals. Typically this is taken out from an individual’s paychecks or paid out by a business throughout the year. Most countries and their governments use income tax as a way to fund themselves and programs for the public. However, some countries do not charge any income tax to their citizens or businesses.
Here are 5 countries around the world with no income tax charged.
5 Countries Around the World with No Income Tax
Taxes are important for driving the economy of a country forward. However, some countries do not fund their economies with income taxes on individuals. Instead, they’ll fund their economies through other means, such as the trade of natural resources that the country is rich in.
Here is a list of 5 countries that do not charge income tax, and how they choose to fund most of their government and economy instead:
- Qatar: There is no income tax in Qatar for an individual’s wages, salaries, and other allowances. Since the country is rich in resources such as oil and gas, they make most of their funds in trading these resources in the global market.
- The Bahamas: As one of the richest tourism destinations in the world, the Bahamas does not charge income tax on its citizens. Its economy is one of the fastest growing in the world due to its tourism rates every year. Additionally, those who invest in the Bahamas and live there long term are typically treated better by Immigration, hence where more funds come in for the country.
- Kuwait: Similar to Qatar, Kuwait is rich in resources, primarily due to its oil industry. However, foreign citizens also contribute to the economy as well as the population, making up over 50% of people in the country.
- Monaco: Monaco is a country where the top 1% often love to vacation or even move to. Because of this, the country charges zero income tax. Corporations within the country also have favorable tax treatment.
- United Arab Emirates: The UAE’s mixture of tourism and oil exports makes it one of the richest and freest economies. Residents can live in the UAE tax-free, and the country is extremely friendly to foreign investment. Because of these factors, the country is one of the more popular Gulf nations to visit and live in.
These countries are highly favored to live in due to their lack of imposing income tax.