The IP Taxation Index evaluates and assesses the relative tax burdens of over 180 of the world’s most important cities. The extent to which individuals and businesses are subject to taxes is the primary determinant of how tax-friendly a jurisdiction is. Cities that score at the top do not impose taxes or levy a very small amount. Tax rates are typically the same across the country but might change from one city to the next. The Taxation Index considers issues from the point of view of those with high incomes because tax rates are frequently evaluated compared to the highest tax band.
In most cases, an individual’s level of taxable income will be significantly impacted by the amount of wealth that they have. The index considers various parameters, including but not limited to wealth tax, social security tax, and inheritance tax. Obviously, the Cayman Islands have a taxation structure that is more advantageous for affluent people than France, but between France and Denmark, it is possible to make an argument for both countries. In addition, proper tax planning has the potential to significantly reduce the amount of money an individual is required to pay in taxes. Even if you reside in a nation with a high overall tax burden, there are ways that you may be able to dramatically reduce the amount of tax that you are required to pay.
All of the data was collected in January 2021. This data indicates the rates in effect throughout the fiscal year 2021. A tax resident is subject to all of the rates.
The source is derived from the three primary classifications of taxation systems. A tax with a territorial foundation only applies to revenue earned inside a certain region. When a tax has a residential base, it is collected on the inhabitants’ total income from all sources. A tax charged on citizens’ worldwide income is said to have a citizenship base. In most cases, the taxes system will classify income as domestic or international.
The term “tax residency” refers to the circumstances under which an individual might be designated a tax resident of a certain location.
The personal income tax rate applied on a jointly filed yearly salary of one hundred thousand United States dollars is the income tax of 100K. It assumes no tax deductions were claimed to get a lower tax rate. In the case of nations that impose a supplementary tax, both the exemption and the social security deduction were computed. Some jurisdictions impose tax at several federal, regional, and local levels.
Income tax for $1,000,000 is calculated using the same approach as income tax for $100,000; however, the tax rate applies to a jointly filed yearly salary of USD 1,000,000 or more.
Large companies are required to pay corporate tax. Unless something else is specified, it is a tax on the profit (see notes). Rates for corporations might vary significantly from one sector to the next. In the instance of the incremental tax rate, we decided to go with the highest possible tax rate. Some jurisdictions impose corporation taxes at federal, regional, and local levels.
A general sales tax, often called a consumption tax or value-added tax (VAT), is a tax applied to purchasing products and services that fall under a broader category. The average sales tax rate for alcoholic beverages and cigarettes is rather high, whereas the average rate for food is relatively low. Some jurisdictions have the authority to levy taxes at the federal, regional, and local levels.
The amount shown for the Social Security Total column indicates the combined contributions the employer and employee made towards social security. The rates are frequently capped and might differ according to age, income level, and occupation. The rate may include a variety of benefits such as a pension, medical care, unemployment insurance, and so on.
The tax charged on the estate via the inheritance received by the children (linear) of the dead person is referred to as the inheritance tax (children). The rate is an estimate of the maximum rate that applies to the inheritance of a real estate property and represents the rate that applies to the inheritance of a real estate property. Stamp duty may be imposed on the transfer of assets in places that do not have an inheritance tax but do have a tax on the transfer of assets.
The term “capital gain on locally publicly traded shares” refers to the tax imposed on a person’s capital gains generated from selling locally publicly listed shares on a stock exchange after the individual has held onto the shares for more than three years. The rate differs for each individual following their proportion of firm ownership. The price that you see mentioned is for a fractional portion of ownership.
The tax rate that applies to dividends people collect from publicly traded corporations on the local stock exchange is the dividend tax on local publicly traded shares. The price that you see mentioned is for a fractional portion of ownership.
The phrase “dividend tax on foreign shares” refers to the tax applied on dividends paid to an individual by a foreign firm. The dividends are counted towards the total amount of revenue from abroad.
An individual’s total net worth is subject to yearly taxation based on the wealth tax. The highest possible rate of taxes that applies is used to arrive at an assessment of the assets’ net worth.
When a person leaves a nation, they are subject to an exit tax, also known as an expatriation tax. This tax is applied in the usual course of events. When one leaves a country, unrealized capital gains are subject to taxation in many situations, but in many cases, the taxation of these gains can be postponed until the assets in question are sold.
Special tax regime. In several parts of the world, affluent people are exempt from paying taxes at a rate that is considered to be excessive. It may be to the taxpayer’s advantage to participate in one of these schemes, such as giving up a large payment or claiming non-domiciled tax status.
China’s tax treaty determines whether or not the nation in question has signed a tax treaty with China. If you are a Chinese national, you may use this to your advantage to avoid paying double taxation on money earned outside of China.
Most of the tax rates were obtained from official government sources, most of the time coming from the website of the tax department or the ministry of finance. Because rates can be imposed at the federal, regional, and local levels, many tax rates result from combining more than one source. The references were extremely lacking on several government websites, and the material could not be accessed online. In certain instances, we relied on the extremely in-depth Tax Summaries provided by PWC.