Finding the Best Country for Value: Top Tax Policies and Benefits

[Don]

Which country offers the best value for money? What is the best tax policy?

Countries with the Highest Personal Income Tax Rates

1) Belgium 79.5%
2) Finland 66.75%
3) Portugal 64%
4) United Kingdom 63.25%
5) Switzerland 59.7%

Did you know that a tax haven can also be a country with the highest personal income tax rate? (note some countries listed above are regarded as tax havens)

Countries that offer very low tax rates for foreign investors are called tax havens. Tax havens generate government revenue by attracting a generous amount of capital inflow and imposing fees, charges, and low tax rates. The world's top ten tax havens are Luxembourg, Cayman Islands, Isle of Man, Jersey, Ireland, Germany, the Netherlands, England, Switzerland, and the Bahamas.

Source: Highest Taxed Countries 2024

Laffer championed supply-side economics and gained prominence serving as a top adviser to then-President Reagan. He established what is known as the "Laffer Curve," which showed that increases in tax rates will eventually cause government revenue to decrease at a certain point. The model has been cited to argue for the benefits of tax cuts. Critics of supply-side economics argue that it has contributed to inequality and disproportionately benefits the wealthy.

 

[Alonzo]

Countries with the Highest Personal Income Tax Rates

1) Belgium 79.5%
2) Finland 66.75%
3) Portugal 64%
4) United Kingdom 63.25%
5) Switzerland 59.7%

Insanely inaccurate

 

[Don]

Insanely inaccurate

I was also wondering how they came up with these numbers.

 

[JohnLocke]

Sorry but I find it strange that you repost data.

There was earlier this day the below thread where you also keep telling that Switzerland has this high rates. I think we are a few people around here living in Switzerland at least part time who can confirm that these figures are totally wrong.

Question - Best offshore jurisdiction for 2024 and 4 years ahead?

I'm wondering which offshore jurisdiction is the best in 2024 if one aims to pay as little tax as possible, maintain privacy, and at the same time wants to protect one's assets? - I'm considering Delaware, New Mexico, Dubai, and Switzerland - are these bad choices?

www.offshorecorptalk.com

It's a shame that you're doing this because I know you are professional enough in other respects, but I just don't understand why this is necessary. Maybe you can explain it?

 

[Don]

There was earlier this day the below thread where you also keep telling that Switzerland has this high rates. I think we are a few people around here living in Switzerland at least part time who can confirm that these figures are totally wrong.

It's a shame that you're doing this because I know you are professional enough in other respects, but I just don't understand why this is necessary. Maybe you can explain it?

It depends on how your business (or income) is structured.
Indeed, for some individuals, it's relatively low tax and considering the high quality of life in Switzerland, it could be one of the best places in the world to reside.

But I am not making anything up, noting the following:

• As a general rule, the overall approximate range of the maximum CIT rate on profit before tax for federal, cantonal, and communal taxes is between 11.9% and 21.0%, depending on the company’s location of corporate residence at a specific capital of a canton in Switzerland.
• As soon you want to distribute dividends from a Swiss company, there is a 35% withholding tax
• So take the maximum CIT rate of 21% + 35% WHT (not precisely low tax, in my opinion)
• Despite the above, Switzerland is regarded as a tax haven, and it offers amazing incentives that attract businesses and individuals.

Another example: In Luxembourg, the effective corporate tax rate for higher-earning businesses in 2022 was 24.94%, according to PwC. Still, it is regarded as one of the top tax havens in the world because it provides certain incentives and special types of structures with potentially very low overall effective taxation.

 

[JohnLocke]

Still, you wrote:
Countries with the Highest Personal Income Tax Rates
and put
5) Switzerland 59.7%
Now you mix it with CIT and various other terms to get on this rate.

Then I would suggest that you rephrase everything and clarify how you arrive at those figures. Because the income tax alone as an employee never reaches that level.

 

[Don]

Still, you wrote:
Countries with the Highest Personal Income Tax Rates
and put
5) Switzerland 59.7%
Now you mix it with CIT and various other terms to get on this rate.

Then I would suggest that you rephrase everything and clarify how you arrive at those figures. Because the income tax alone as an employee never reaches that level.

I appreciate your calling this out. It appears the number is indeed incorrect (it's not correct to summarize percentages disregarding the tax base), but note that it also takes into account the taxes on consumption. I had included the source in the original post where it was copied: Highest Taxed Countries 2024

 

[Marzio]

In Vaud they have fucked up PIT rates

https://www.credit-suisse.com/media/assets/private-banking/docs/ch/privatkunden/eigenheim-finanzieren/taxmonitor-ch-2023-en.pdf

 

[daniels27]

Still, you wrote:
Countries with the Highest Personal Income Tax Rates
and put
5) Switzerland 59.7%
Now you mix it with CIT and various other terms to get on this rate.

Then I would suggest that you rephrase everything and clarify how you arrive at those figures. Because the income tax alone as an employee never reaches that level.

I think, he took the number from this Wikipedia page:

List of countries by tax rates - Wikipedia

en.wikipedia.org

It was me who made this contribution 5 October 2021. The data is valid for the village of Avully and Chancy of the canton of Geneva for a roman catholic or protestant and includes the 10.6% AHV that is payable for all personal income without cap and without any benefit above 70k CHF.

If you move to Baar, you will pay substantially less than in those two villages. In the best case 34.2% (if you are not Christian and do not hold any Heimatort in the canton of Zug).

The main problem with Switzerland and personal income tax is the AHV which is uncapped (unlike Germany etc.) and adds a hefty 10.6% to what you totally pay. On the other side, the progression in Switzerland starts fairly late.

 

[Cloudbanck]

I looked up Baar in the official tax calculator for 2024, and assumed single person 35 year old, no religious affiliation, earning a decent 240,000 CHF gross income, but not enough wealth to hit the wealth tax. Total federal + cantonal + municipal tax would be 48,206 or 20%.

ESTV Steuerrechner

Mit diesem Online-Tool kann man Individuelle Steuerberechnungen, historische Steuerbelastungsstatistiken und kantonale Steuerdaten interaktiv generieren.

swisstaxcalculator.estv.admin.ch

Also note that corporate dividends would be treated as income if you live in Switzerland, so these would also be taxed at the average 20% rate. (The 35% is deducted at source but then you declare in your tax return it and get it back.)

 

[JohnLocke]

Thank you guys for clarification about Switzerland, it's good to have the proper facts here.

We can resume to the rest of the countries so we don't turn this into a Switzerland thread and make a lot of noise.

 

[daniels27]

For the value part:
Many countries are very good if you live remote, but when you have kids, you may want to have schools and when you are old, you may want to have hospitals.

For the money part:
Many countries do offer great tax incentives like flat rate taxation in Switzerland, Italy, Gibraltar, etc. for which some may be eligible while natives most likely are not.

For your part:
What is your personal income? If you are very rich, you may find Switzerland flat rate taxation at 500k USD cheap, while others won't even accept Gibraltar's 40k GBP flat rate. And then, there are those with nothing, which definitely benefit the most in Finland, Sweden or Switzerland as the other tax payer are forced to pay for the services you consume pretty well.

Of the ones you mention, I would say for decent 150k income:

• with kids and a taste for cold => Finland
• without kids =>Switzerland
• with a taste for warm weather => Portugal
• with a taste for bad weather => UK

Belgium, I personally have not heard many going there, I think Luxembourg would be better in any case, but it there are different tastes. UK is dangerous in case they scarp non-dom but good if you prefer an English speaking country.

 

[Marzio]

Gibraltar's 40k GBP flat rate

I never heard about that 40K GBP flat rate, what's the name of this program?

I looked up Baar in the official tax calculator for 2024, and assumed single person 35 year old, no religious affiliation, earning a decent 240,000 CHF gross income, but not enough wealth to hit the wealth tax. Total federal + cantonal + municipal tax would be 48,206 or 20%.

Do the same math for Wollerau and you'll discover the place with the lowest PIT in Switzerland. Roger Federer used to live there.

 

[JohnLocke]

So let's hear it, which country offers the best "value for money" – I simply can't see where this is leading! There must be concrete suggestions for this?

 

[Marzio]

The answer is that there's no clear answer because what you value could be different from what i value. Taxation is only one the the value elements.

Think it like an 10 band EQ where each band is an element of value:
- corporate taxation
- personal taxation
- weather
- lifestyle
- good schools for kids
- nature
- people
- and so on

Depending on how you move any of those bands based upon your priorities the end result changes.

For somebody that cares more about nature than overall taxation, country X could be a better of choice than Dubai for example.

 

[Don]

So let's hear it, which country offers the best "value for money" – I simply can't see where this is leading! There must be concrete suggestions for this?

daniels27 hit the nail, noting that it depends a lot on how much wealth you currently have and how much income you generate.

I mean, if you are raised in Dubai and have a very low income, you will not be able to afford education or healthcare. The poor people in some countries (like UAE) can not even read or write, so for them, it may be challenging to get out of poverty unless they move to countries where access to relevant services would be free for them (say Finland)

I guess it could be possible to devise a guide based on different income brackets and when to make a move, which could, in turn, help to move up or stay on a higher level:
With a few inputs from my side, below you may find an example of what the GPT generated:

What's your opinion about the tiers? Which jurisdictions would be winners for each "tier"?

1. s**t Tier - Up to $10,000 Income / $10,000 Net Worth​

Objective: Gain access to basic needs, education, and opportunities for growth.

Recommended Action:​

• Lose your passport, get on a boat and move to Finland or similar countries with strong social support and high-quality public services.

Rationale:​

• Basic Needs: Access to food, clean water, and healthcare.
• Education: Opportunities to learn to read and write, and pursue further education.
• Social Support: Comprehensive welfare systems to support basic living.

Steps:​

1. Relocate: Move to Finland or a country with similar benefits.
2. Utilize Social Services: Take advantage of the country's social safety net for housing, food, and healthcare.
3. Focus on Education: Learn the local language and pursue basic education and vocational training.

2. Low Tier - $10,000 to $70,000 Yearly Income​

Objective: Advance education, start a small business, or climb the professional ladder.

Recommended Action:​

• Move to Germany, Canada, or Australia for higher education and business opportunities.

Rationale:​

• Advanced Education: Access to world-class universities and vocational training programs.
• Business Opportunities: Supportive environments for small business startups.
• Professional Growth: Robust job markets with opportunities for career advancement.

Steps:​

1. Pursue Education: Enroll in higher education programs or vocational training.
2. Start a Business: Utilize local government incentives for small businesses.
3. Professional Development: Seek job opportunities and professional growth in established industries.

3. Mid Tier - $70,000+ Yearly Income / $200,000 Net Worth​

Objective: Optimize tax efficiency, enjoy a high quality of life, and maintain career/business growth.

Recommended Action:​

• Become a Digital/Tax Nomad: Consider countries like Georgia, Panama, or Thailand with favorable tax policies and vibrant expatriate communities.

Rationale:​

• Tax Benefits: Many countries offer tax incentives for digital nomads.
• Quality of Life: Access to good healthcare, education, and lifestyle amenities.
• Cost of Living: Reasonable cost of living relative to income.

Steps:​

1. Research Visa Options: Look for countries offering digital nomad visas or similar programs.
2. Set Up Remote Work Infrastructure: Ensure reliable internet and work setup.
3. Network: Join local expatriate communities and professional networks.

4. Top Tier - $500,000-1M Net Worth (above 1M, consider yourself a winner, you must know better and not need to refer to some sort of guide).​

Objective: Minimize taxes and protect wealth through advanced financial strategies and favorable jurisdictions.

Recommended Action:​

• Consider UAE, Bahamas, or Other Low-Tax Jurisdictions: Leverage tax structuring and financial privacy.

Rationale:​

• Tax Efficiency: No personal income tax, capital gains tax, or wealth tax in many of these jurisdictions.
• Asset Protection: Strong laws protecting personal assets and investments.
• High Quality of Life: Luxurious lifestyle options, high-end services, and global connectivity.

Steps:​

1. Tax Planning: Consult with a tax advisor specializing in cross-border tax structuring.
2. Residency and Citizenship: Look into residency by investment programs or other options for long-term stay.
3. Asset Management: Set up trusts, offshore accounts, and other mechanisms to protect and grow wealth.

Summary​

• s**t Tier: Move to Finland for basic needs, education, and social support.
• Low Tier: Move to Germany, Canada, or Australia for advanced education and business opportunities.
• Mid Tier: Become a digital nomad in countries like Georgia, Panama, or Thailand for tax benefits and a good quality of life.
• Top Tier: Optimize tax efficiency and protect wealth in UAE, Bahamas, or similar jurisdictions.

 

[Marshal]

For the value part:
Many countries are very good if you live remote, but when you have kids, you may want to have schools and when you are old, you may want to have hospitals.

For the money part:
Many countries do offer great tax incentives like flat rate taxation in Switzerland, Italy, Gibraltar, etc. for which some may be eligible while natives most likely are not.

For your part:
What is your personal income? If you are very rich, you may find Switzerland flat rate taxation at 500k USD cheap, while others won't even accept Gibraltar's 40k GBP flat rate. And then, there are those with nothing, which definitely benefit the most in Finland, Sweden or Switzerland as the other tax payer are forced to pay for the services you consume pretty well.

Of the ones you mention, I would say for decent 150k income:

• with kids and a taste for cold => Finland
• without kids =>Switzerland
• with a taste for warm weather => Portugal
• with a taste for bad weather => UK

Belgium, I personally have not heard many going there, I think Luxembourg would be better in any case, but it there are different tastes. UK is dangerous in case they scarp non-dom but good if you prefer an English speaking country.

Agree with you when you compare Belgium to Luxembourg. What about the UK and Ireland? Do you see any differences at this point and which one would you choose if you had to?

 

[daniels27]

Agree with you when you compare Belgium to Luxembourg. What about the UK and Ireland? Do you see any differences at this point and which one would you choose if you had to?

Sark, UK would be my choice. UK vs. Ireland is a hard one. I personally have never really considered paying taxes in the UK for more than necessary. It is fairly expensive for really not much. Ireland, I have never really looked into. but taxes seem to be lower, so I would chose Ireland. In any case, I would stay away from urban areas.

 

[Don]

Sark, UK would be my choice. UK vs. Ireland is a hard one. I personally have never really considered paying taxes in the UK for more than necessary. It is fairly expensive for really not much. Ireland, I have never really looked into. but taxes seem to be lower, so I would chose Ireland. In any case, I would stay away from urban areas.

Why not Jersey or Guernsey?

 

[daniels27]

Why not Jersey or Guernsey?

Yes, also an option. Taxes are 20% though. But definitely an option I would recommend considering.