The Highest Individual Income Tax Rates Across the Globe

Source: Thinkstock

Source: Thinkstock

A discussion about taxes can be both interesting and frightening. You might be interested to hear about how someone had to pay a monstrous tax bill, but you sure don’t want that person to be you. Or you might be intrigued by tax-audit horror stories, but you do your best to steer clear of a visit with the IRS.

What can be even more interesting is learning how much residents across the globe shell out for income taxes. Tax rates will be different based on factors such as filing status and income, but those differences vary wildly depending on where you live. Some countries pay a lot more than the United States’ highest individual income tax rate of 39.6%.

Here are the 12 highest individual tax rates around the globe according to research The Cheat Sheet gathered from accounting firm KPMG.

12. Austria

  • Highest individual income tax rate: 50%
  • The top marginal rate is triggered at 60,000 euros of taxable income.

11. Belgium

  • Highest individual income tax rate: 50%
  • The top marginal rate is triggered at 37, 750 euros of taxable income.

10. Israel

  • Highest individual income tax rate: 50%
  • The top marginal rate is triggered at 811,560 Israeli new shekels per year in 2014.

9. Slovenia

  • Highest individual income tax rate: 50%
  • The top marginal tax rate is triggered at 70,907 euros of taxable income.

8. Japan

  • Highest individual income tax rate: 50.84%
  • The top marginal rate (40.84%) is triggered at 18,000,000 Japanese yen of taxable income. There is also a local inhabitant (municipal and prefectural) tax of an additional 10%.

7. Finland

  • Highest individual income tax rate:  51.25%
  • The top marginal rate is triggered at 100,000 euros of taxable income. However, KPMG notes that municipal tax rates are significant in Finland (they vary between approximately 16.25% and 22%). If an individual belongs to a Finnish church, he or she might also have to pay a church tax of about 1% to 2.20%.

6. Zimbabwe

  • Highest individual income tax rate:  51.5%
  • The top marginal rate of 50% is triggered at $20,000 per month ($240,000 per year) for 2014 and 2015. KPMG notes an aids levy of 3% of the basic tax is added, which makes the effective rate 51.5%.

5. Netherlands

  • Highest individual income tax rate:  52%
  • The top marginal rate is triggered at 56,532 euros of taxable income. For 2015, the top marginal rate is triggered at 57,586 euros. In this calculation, KPMG takes the following into account: Dutch tax resident, 30% ruling not applicable, subject to the Dutch Social Security scheme.

4. Spain

  • Highest individual income tax rate:  52%
  • The top marginal rate is triggered at 300,000.20 euros. Says KPMG, “The complementary surcharge to Personal Income Tax (PIT) rates applicable for 2012 and 2013 tax years has also been extended for 2014. As a consequence, the general PIT tax rates applicable for 2012, 2013 and 2014 have been increased. The general marginal rate has been established at 52% for 2012, 2013 and 2014, but it might vary depending on the autonomous community. Tax reform has been approved, reducing the maximum marginal tax rate to 47% for tax year 2015 and 45% as from tax year 2016.”

3. Denmark

  • Highest individual income tax rate:  55.56%
  • Denmark’s tax rates are based on categories of income and each category has a different tax rate. Says KPMG, “The combined top marginal rate in the ordinary scheme, which applies to employment income, kicks in at 449,100 Danish krones (2014) and 459,200 Danish krones (2015). Generally, share income (dividends and capital gains) is taxed in a separate tax scheme at 27% to 42%, depending on share income level. Other investment income, for example interest income, is taxed in the ordinary tax scheme with a marginal tax rate of 42% (2014).”

2. Sweden

  • Highest individual income tax rate: 57%
  • The top marginal rate is triggered at 602,600 Swedish krona of taxable income.

1. Aruba

  • Highest individual income tax rate: 58.95%
  • The top marginal tax rate is triggered at 313.459,00 Aruban florin of taxable income. The taxable income calculated is reduced by a maximum tax-free allowance of 20,252 Aruban florin per year, reports KPMG.

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