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20 countries with highest income tax rate!

by CA Karishma

While many in the Indian salaried class think that a good portion of their money goes into paying taxes, the truth is that income tax in India is much lower than many countries across the world.

Let us have a look at top 20 countries with highest income taxes, according to a KPMG study.

1. Sweden

Income tax rate: 56.6 per cent

Sweden has a comprehensive social security system including retirement pension insurance, health insurance, parenthood insurance, survivor’s pension insurance, rehabilitation insurance and occupational accident insurance.

Both employers and employees contribute to the social charges.

2. Denmark

Income tax rate: 55.4 per cent

Gifts to unrelated parties are treated as personal income in the hands of the recipient, while gifts over a certain threshold to certain close relatives are subject to 15 per cent gift tax.

3. The Netherlands

Income tax rate: 52 per cent

Married couples (fiscal partners) file tax returns as separate individuals, however unmarried couples living together on the same address for more than half a year, can elect to be treated as fiscal partners too.

4. Austria

Income tax rate: 50 per cent

There is no inheritance and gift tax in effect since July 31, 2008. There are, however, reporting requirements if the value of the gifted/inherited amount exceeds certain limit.

5. Belgium

Income tax rate: 50 per cent

Expatriate tax concessions are available for executives temporarily assigned to Belgium or directly recruited from abroad. These concessions provide for substantial income tax relief.

6. Japan

Income tax rate: 50 per cent

In addition to health insurance, those aged 40 or older are required to contribute to the nursing care insurance (0.75 per cent capped at JPY9,075 per month).

7. The United Kingdom

Income tax rate: 50 per cent

Although 50 per cent is the top rate of tax, the phase out of personal allowances on income over 100,000 pounds can result in a marginal tax rate of 60 per cent.

8. Finland

Income tax rate: 49.6 per cent

Employee social security rate is 0.4 per cent for unemployment insurance, 2.4 per cent for sickness insurance, and 4.5 per cent (5.7 per cent if employee is 53 years or older) for pension insurance.

9. Norway

Income tax rate: 47.8 per cent

The employee must pay 7.8 per cent (uncapped) on gross income to the social security scheme. The contribution is included in the general tax assessment.

10. Ireland

Income tax rate: 47 per cent

Employee social security has two components: Pay Related Social Insurance is 4 per cent up to an earnings cap of 75,036 euros; health levy is 4 per cent on the first 75,036 euros, 5 per cent on remainder.

11. Iceland

Income tax rate: 46.3 per cent

Employees do not make separate social security contributions. However, employers pay social security contributions on all remuneration paid for dependent personal services.

12. Portugal

Income tax rate: 45.9 per cent

Portuguese resident and non-resident employees are liable for social security contributions at a rate of 11 per cent on their gross remuneration.

13. Germany

Income tax rate: 45 per cent

Employee social security rate for pension and unemployment contributions is about 11.6 per cent capped at monthly income of 5,300 euros.

Contribution to health and long-term care is about 9 per cent capped at monthly income of 3,600 euros.

14. Australia

Income tax rate: 45 per cent

Generally, all non-cash fringe benefits provided to employees are subject to Fringe Benefits Tax, which is a tax payable by the employer, with the value of such benefits being exempt from income tax in the hands of the employees.

15. China

Income tax rate: 45 per cent

Chinese social security contributions are mandatory for individuals of China domicile employed in China. Rates vary by local government.

Generally, social security is assessed against salary, and the maximum salary assessed is capped at three times the average city salary of the prior year.

16. Greece

Income tax rate: 45 per cent

Greece does not have a uniform social security system. There are many different social security funds covering various sectors of the population.

In addition to the basic social security funds, employed persons must also be covered by a supplementary retirement fund.

17. Israel

Income tax rate: 45 per cent

Married couples may elect to file tax returns jointly or separately, and receive a joint or separate tax calculation.

18. Italy

Income tax rate: 43 per cent

The employee social security rate ranges from 9.19 per cent to 10.19 per cent of taxable compensation, depending on the classification of the employee (worker, executive, or manager) and depending upon the employer’s activity.

19. Spain

Income tax rate: 43 per cent

Employee social security rate is upwards of 6.35 per cent but annual contribution caps out at about 2,436 euros.

20. Papua New Guinea

Income tax rate: 42 per cent

Where the only income derived by an individual is salary or wages, and salary or wages tax has been paid, an income tax return is not required to be lodged.


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Gaurav November 10, 2011 - 11:30 pm

ma’am- do these countries follow progressive or regressive taxation?
Also, y do they hav such high standards n lavish lifestyles even after paying soo much tax??

Trupti Sharma November 20, 2011 - 10:42 pm

Hehe tax evaders must read this !! They’ll have some urge to pay i guess !! :p :p :p :p At least i’d!! :p:p


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