INTERNATIONAL TAXATION BY COUNTRY


INTERNATIONAL TAXATION BY COUNTRY


The "International Taxation" indicator is based on three sub-indicators. These are best explained using three examples:
  1. World Income Taxable for Citizen Residents — This sub-indicator measures whether income earned in country B (e.g., rental income, dividends...) by a citizen and resident of country A, is liable to income tax on that income in country A.
  2. World Income Taxable for Foreign Residents — This sub-indicator measures whether income earned in country B by a resident but non-citizen (i.e., a foreigner) of country A, is liable to income tax on that income in country A.
  3. World Income Taxable for Non-Residents — This sub-indicator measures whether income earned in country B by a resident of country A is liable to income tax on that income in country B.

WHAT ARE TERRITORIAL, RESIDENTIAL AND CITIZENSHIP TAXATION?


All countries use one of three major tax systems concerning the treatment of worldwide income.

Territorial Taxation
Countries/territories that have the policy of territorial taxation (such as Hong Kong) only tax income earned on their respective territory. It does not matter whether the income is earned by a resident/non-resident or citizen/non-citizen. Under this system, the sub-indicators would look as follows:
  1. World Income Taxable for Citizen Residents - NO
  2. World Income Taxable for Foreign Residents - NO
  3. World Income Taxable for Non-Residents  - YES


Residential Taxation
This is by far the most widely used tax system concerning the treatment of world income. Countries that have the policy of residential taxation (such as the UK) tax all worldwide income earned by the residents of the country. It does not matter where the income is earned or whether the earner is a citizen or non-citizen. Under this system, the sub-indicators would look as follows:
  1. World Income Taxable for Citizen Residents - YES
  2. World Income Taxable for Foreign Residents - YES
  3. World Income Taxable for Non-Residents  - YES/NO (not defined by the residential taxation system)


Citizenship Taxation (Usually in Combination with Residential Taxation)
Only two countries in the world use citizenship taxation - the US and Eritrea. Countries that employ a citizenship based taxation system tax all worldwide income earned by the citizens of the country. It does not matter where the income is earned or where the earner resides. 

The US and Eritrea use citizenship taxation in combination with residential taxation. This means that citizens are taxed on their worldwide income due to their citizenship (even if they do not reside int he US/Eritrea). While non-citizens, but US/Eritrea-based residents are taxed on their worldwide income due to their residence in one of both countries. Under a system as practiced by the US and Eritrea the sub-indicators would look as shown below. A fourth sub-indicator was added in order to clarify the main characteristic of citizenship taxation.
  1. World Income Taxable for Citizen Residents - YES (due to citizenship and residential taxation)
  2. World Income Taxable for Foreign Residents - YES (due to residential taxation)
  3. World Income Taxable for Non-Residents  - YES/NO (not defined, YES in the case of the US and Eritrea)
  4. World Income Taxable for non-resident citizens - YES (due to citizenship taxation)


Details on which of the three systems a country uses can be found on the country profile pages.

MAP OF COUNTRIES BY INTERNATIONAL TAXATION


INTERNATIONAL TAXATION
RANKING SCORE COUNTRY WORLD INCOME TAXABLE FOR CITIZEN RESIDENTS WORLD INCOME TAXABLE FOR FOREIGN RESIDENTS LOCAL INCOME TAXABLE FOR NON-RESIDENTS SOURCES
1 1.00 Andorra NO NO NO 1
1 1.00 Bahamas NO NO NO 1, 2
1 1.00 Bahrain NO NO NO 1, 2
1 1.00 Brunei NO NO NO 1, 2
1 1.00 Kuwait NO NO NO 1, 2
1 1.00 Maldives NO NO NO 2
1 1.00 Monaco NO NO NO 4
1 1.00 Nauru NO NO NO 27
1 1.00 Oman NO NO NO 1, 2
1 1.00 Qatar NO NO NO 1, 2
1 1.00 St. Kitts and Nevis NO NO NO 1
1 1.00 United Arab Emirates NO NO NO 1, 2
1 1.00 Vanuatu NO NO NO 35
17 0.71 Antigua and Barbuda NO NO YES 1
17 0.71 Botswana YES NO NO 1, 2
17 0.71 Burundi NO NO YES 9
17 0.71 Cape Verde NO NO YES 4
17 0.71 Costa Rica NO NO YES 12
17 0.71 Democratic Republic of Congo NO NO YES 1, 2
17 0.71 Equatorial Guinea NO NO YES 1, 2
17 0.71 Georgia NO NO YES 1, 2
17 0.71 Grenada NO NO YES 1
17 0.71 Guatemala NO NO YES 1, 2
17 0.71 Hong Kong NO NO YES 1, 2
17 0.71 Lebanon NO NO YES 1, 2
17 0.71 Libya NO NO YES 1, 2
17 0.71 Macau NO NO YES 1, 2
17 0.71 Madagascar NO NO YES 1, 2
17 0.71 Malawi NO NO YES 1, 2
17 0.71 Malaysia NO NO YES 1, 2
17 0.71 Marshall Islands NO NO YES 25
17 0.71 Micronesia NO NO YES 26
17 0.71 Namibia NO NO YES 1, 2
17 0.71 Nicaragua NO NO YES 1, 2
17 0.71 Palau NO NO YES 3
17 0.71 Panama NO NO YES 1, 2
17 0.71 Paraguay NO NO YES 1, 2
17 0.71 Saudi Arabia NO NO YES 1, 2
17 0.71 Seychelles NO NO YES 2
17 0.71 Singapore NO NO YES 1, 2
17 0.71 Swaziland NO NO YES 2
17 0.71 Syria NO NO YES 1
17 0.71 Taiwan NO NO YES 1, 2
17 0.71 Thailand NO NO YES 1, 2
17 0.71 Tonga NO NO YES 34
17 0.71 Tuvalu NO NO YES 35
17 0.71 Zambia NO NO YES
17 0.71 Zimbabwe NO NO YES 1, 2
52 0.43 Chile YES NO YES 1, 2
52 0.43 China YES NO YES 1, 2
52 0.43 Colombia YES NO YES 1, 2
52 0.43 Japan YES NO YES 1, 2
52 0.43 South Korea YES NO YES 1, 2
57 0.29 Angola YES YES NO 1, 2
57 0.29 Congo YES YES NO 2
57 0.29 Guinea YES YES NO 2
60 0.00 Afghanistan YES YES YES 2
60 0.00 Albania YES YES YES 1, 2
60 0.00 Algeria YES YES YES 1
60 0.00 Argentina YES YES YES 1, 2
60 0.00 Armenia YES YES YES 2
60 0.00 Australia YES YES YES 1, 2
60 0.00 Austria YES YES YES 1, 2
60 0.00 Azerbaijan YES YES YES 1, 2
60 0.00 Bangladesh YES YES YES 5
60 0.00 Barbados YES YES YES 1, 2
60 0.00 Belarus YES YES YES 1, 2
60 0.00 Belgium YES YES YES 1, 2
60 0.00 Belize YES YES YES 6
60 0.00 Benin YES YES YES 1
60 0.00 Bhutan YES YES YES 7
60 0.00 Bolivia YES YES YES 1, 2
60 0.00 Bosnia and Herzegovina YES YES YES 1
60 0.00 Brazil YES YES YES 1, 2
60 0.00 Bulgaria YES YES YES 1, 2
60 0.00 Burkina Faso YES YES YES 8
60 0.00 Cambodia YES YES YES 2
60 0.00 Cameroon YES YES YES 1, 2
60 0.00 Canada YES YES YES 1, 2
60 0.00 Central African Republic YES YES YES 10
60 0.00 Chad YES YES YES 11
60 0.00 Comoros YES YES YES 3
60 0.00 Cook Islands YES YES YES 12
60 0.00 Croatia YES YES YES 1, 2
60 0.00 Cuba YES YES YES 1, 2
60 0.00 Cyprus YES YES YES 13
60 0.00 Czech Republic YES YES YES 1, 2
60 0.00 Denmark YES YES YES 1, 2
60 0.00 Djibouti YES YES YES 1, 2
60 0.00 Dominica YES YES YES 3
60 0.00 Dominican Republic YES YES YES 14
60 0.00 East Timor YES YES YES 15
60 0.00 Ecuador YES YES YES 1, 2
60 0.00 Egypt YES YES YES 1, 2
60 0.00 El Salvador YES YES YES 1, 2
60 0.00 Eritrea YES YES YES 16
60 0.00 Estonia YES YES YES 1, 2
60 0.00 Ethiopia YES YES YES 2, 17
60 0.00 Fiji YES YES YES 1, 2
60 0.00 Finland YES YES YES 1, 2
60 0.00 France YES YES YES 1, 2
60 0.00 Gabon YES YES YES 1, 2
60 0.00 Gambia YES YES YES 1
60 0.00 Germany YES YES YES 1, 2
60 0.00 Ghana YES YES YES 1, 2
60 0.00 Greece YES YES YES 1, 2
60 0.00 Guinea Bissau YES YES YES 18
60 0.00 Guyana YES YES YES 1
60 0.00 Haiti YES YES YES 19
60 0.00 Honduras YES YES YES 1, 2
60 0.00 Hungary YES YES YES 1, 2
60 0.00 Iceland YES YES YES 1, 2
60 0.00 India YES YES YES 1, 2
60 0.00 Indonesia YES YES YES 1, 2
60 0.00 Iran YES YES YES 20
60 0.00 Iraq YES YES YES 1, 2
60 0.00 Ireland YES YES YES 1, 2
60 0.00 Israel YES YES YES 1, 2
60 0.00 Italy YES YES YES 1, 2
60 0.00 Ivory Coast YES YES YES 1, 2
60 0.00 Jamaica YES YES YES 1, 2
60 0.00 Jordan YES YES YES 1, 2
60 0.00 Kazakhstan YES YES YES 1, 2
60 0.00 Kenya YES YES YES 1, 2
60 0.00 Kiribati YES YES YES 21
60 0.00 Kosovo YES YES YES 22
60 0.00 Kyrgistan YES YES YES 1
60 0.00 Laos YES YES YES 2
60 0.00 Latvia YES YES YES 1, 2
60 0.00 Lesotho YES YES YES 23
60 0.00 Liberia YES YES YES 24
60 0.00 Liechtenstein YES YES YES 1, 2
60 0.00 Lithuania YES YES YES 1, 2
60 0.00 Luxembourg YES YES YES 1, 2
60 0.00 Macedonia YES YES YES 1, 2
60 0.00 Mali YES YES YES 1
60 0.00 Malta YES YES YES 1, 2
60 0.00 Mauritania YES YES YES 1, 2
60 0.00 Mauritius YES YES YES 1, 2
60 0.00 Mexico YES YES YES 1, 2
60 0.00 Moldova YES YES YES 2
60 0.00 Mongolia YES YES YES 1
60 0.00 Montenegro YES YES YES 1, 2
60 0.00 Morocco YES YES YES 1, 2
60 0.00 Mozambique YES YES YES 1, 2
60 0.00 Myanmar YES YES YES 1
60 0.00 Nepal YES YES YES 28
60 0.00 Netherlands YES YES YES 1, 2
60 0.00 New Zealand YES YES YES 1, 2
60 0.00 Niger YES YES YES 1
60 0.00 Nigeria YES YES YES 1, 2
60 0.00 Norway YES YES YES 1, 2
60 0.00 Pakistan YES YES YES 1, 2
60 0.00 Papua New Guinea YES YES YES 1, 2
60 0.00 Peru YES YES YES 1, 2
60 0.00 Philipines YES YES YES 1, 2
60 0.00 Poland YES YES YES 1, 2
60 0.00 Portugal YES YES YES 1, 2
60 0.00 Romania YES YES YES 1, 2
60 0.00 Russia YES YES YES 1, 2
60 0.00 Rwanda YES YES YES 1, 2
60 0.00 Samoa YES YES YES 29
60 0.00 Sao Tome and Principe YES YES YES 30
60 0.00 Senegal YES YES YES 1, 2
60 0.00 Serbia YES YES YES 1, 2
60 0.00 Sierra Leone YES YES YES 31
60 0.00 Slovakia YES YES YES 1, 2
60 0.00 Slovenia YES YES YES 1, 2
60 0.00 Solomon Islands YES YES YES 1
60 0.00 South Africa YES YES YES 1, 2
60 0.00 South Sudan YES YES YES 1
60 0.00 Spain YES YES YES 1, 2
60 0.00 Sri Lanka YES YES YES 1, 2
60 0.00 St. Lucia YES YES YES 1
60 0.00 St. Vincent and the Grenadines YES YES YES 4
60 0.00 Sudan YES YES YES 1
60 0.00 Suriname YES YES YES 32
60 0.00 Sweden YES YES YES 1, 2
60 0.00 Switzerland YES YES YES 1, 2
60 0.00 Tajikistan YES YES YES 33
60 0.00 Tanzania YES YES YES 1, 2
60 0.00 Togo YES YES YES 9
60 0.00 Trinidad and Tobago YES YES YES 1
60 0.00 Tunisia YES YES YES 1, 2
60 0.00 Turkey YES YES YES 1, 2
60 0.00 Turkmenistan YES YES YES 1
60 0.00 Uganda YES YES YES 1, 2
60 0.00 Ukraine YES YES YES 1, 2
60 0.00 United Kingdom YES YES YES 1, 2
60 0.00 United States YES YES YES 1, 2
60 0.00 Uruguay YES YES YES 1, 2
60 0.00 Uzbekistan YES YES YES 1, 2
60 0.00 Venezuela YES YES YES 1
60 0.00 Vietnam YES YES YES 1, 2
60 0.00 Yemen YES YES YES 1

SOURCES


The "Average Most-Favored-Nation Tariff" sub-indicator is based on the official "International Trade and Market Access Data" by the World Trade Organization (WTO) which can be accessed here.

Sources for all other tax sub-indicators are country-specific and are to be found in the numbered list below.

  1. Deloitte International Tax Source | Country Guides and Highlights". Deloitte, www.deloitte.com. Retrieved July 10, 2014.
  2. 2013-2014 Worldwide personal tax guide - Ernst & Young". Ernst & Young (EY), www.ey.com. Retrieved July 10, 2014. AND "Worldwide personal tax guide 2012 - 2013 - Ernst & Young". Ernst & Young (EY), www.ey.com. Retrieved July 10, 2014.
  3. Santander Trade Portal: Global trade made easy". en.SantanderTrade.com, Santander Group, Retrieved July 10, 2014. (Go to country profile, then to "Establish in ..." and "Tax system")
  4. 1. Global Property Guide, http://www.globalpropertyguide.com. Retrieved July 10, 2014. (Go to country profile)
  5. International Tax Bangladesh Highlights 2012". Deloitte, www.tohmatsu.com. Retrieved July 10, 2014.
  6. Income and Business Tax Act Chapter 55 - Revised Edition 2000". Government of Belize. Retrieved July 10. 2014.
  7. Taxation in Bhutan". Alloexpat, www.bhutan.alloexpat.com. Retrieved July 10, 2014.
  8. Africa – open for business; Burkina Faso". PWC, www.pwc.com.au. Retrieved July 10, 2014.
  9. Guide to Fiscal Information - Burundi". Deloitte, www.deloitte.com. Retrieved July 10, 2014.
  10. Rapport de stage a la Dridcnne". Memoire Online, www.memoireonline.com. retrieved July 10, 2014.
  11. Chad - Individual - Taxes on Personal Income". PWC, www.pwc.com. Retrieved July 10, 2014. 
  12. Income Tax". Ministry of Finance and Economic Management, Government of the Cook Islands, http://mfem.gov.ck/tax. Retrieved July 10, 2014.
  13. International Tax - Cuba Highlights 2013". Deloitte. Retrieved July 10, 2014.
  14. Dominica , Commonwealth of; Individual - Taxes on personal income". PWC, www.pwc.com. Retrieved July 10, 2014.
  15. Timor-Leste (formerly East Timor) - Tax and Investment Guide 2009". PWC, www.pwc.com. Retrieved July 10, 2014.
  16. PROCLAMATION No 62 / 1994 (With its Amendments); A PROCLAMATION TO PROVIDE FOR PAYMENT OF INCOME TAX". MOFCOM, http://er.mofcom.gov.cn. Retrieved July 10, 2014.
  17. Ethiopia - Guide to Fiscal Information". Deloitte. Retrieved July 10, 2014.
  18. Doing Business in Guinea-Bissau". YallaBusiness, www.yallabusiness.com. Retrieved July 10, 2014.
  19. ME Tax handbook ’12 - Getting to grips with the essentials". Deloitte, www.deloitte.com. Retrieved July 10, 2014.
  20. Kiribati Sessional Legislation - Income Tax Act 1990". Pacific Islands Legal Information Institute, http://www.paclii.org. Retrieved July 10, 2014.
  21. Kosovo Tax Highlights". Deloitte, www.deloitte.com. Retrieved July 10, 2014.
  22. Lesotho - Guide to Fiscal Information". Deloitte, www.deloitte.com. Retrieved July 10, 2014.
  23. A quick guide to Taxation in Liberia - 2013". PWC, www.pwc.com/gh. Retrieved July 10, 2014.
  24. Thinking of doing business in Micronesia? Tax and Investment Profile for Micronesia". Deloitte, www.deloitte.com. Retrieved July 10, 2014.
  25. FSMC, TITLE 54. TAXATION & CUSTOMS - Chapter 1: Taxation of Wages, Salaries, and Gross Revenues". The Supreme Court of the Federated States of Micronesia, http://fsmsupremecourt.org. Retrieved July 10, 2014
  26. NAURU - Nauru Tax Information". www.knowyourcountry.com. Retrieved July 10, 2014.
  27. Income Tax Act 2002 - Handbook". Nepal Inland Revenue Department, www.ird.gov.np. Retrieved July 10, 2014.
  28. Income Tax Rates". Samoa Ministry for Revenue, www.revenue.gov.ws. Retrieved July 10, 2014.
  29. SA?O TOME? E PRI?NCIPE - DIA?RIO DA REPU?BLICA". Ministério do Plano e Finanças de São Tomé e Príncipe, www.min-financas.st. Retrieved July 10, 2014.
  30. Sierra Leone Fiscal Guide 2012/13". KPMG, www.kpmg.com. Retrieved July 10, 2014.
  31. Makka, Robby (no date). "SurinamInfo - EN - Taxes". SurinamInfo, www.surinaminfo.com. Retrieved July 10, 2014.
  32. Doing Business Guide Tajikistan 2012 - 2013". PWC, www.pwc.kz. Retrieved July 10, 2014.
  33. Individuals; Getting a tax idendification number (TIN) - Individuals". Tonga - Ministry of Revenue and Customs, www.revenue.gov.to. Retrieved July 10, 2014.
  34. Tuvalu - INCOME TAX ACT 1992". Tuvaluan Government, www.tuvalu-legislation.tv. Retrieved July 10, 2014.
  35. 2014 Index of Economic Freedom". The Heritage Foundation, http://www.heritage.org/index/. Retrieved July 10, 2014. (Go to country profile, then to "Limited Government")