Benjamin Franklin’s quoted in 1789, “In this world, nothing can be said to be certain, except death and taxes”. While he was largely right, especially about death, the same cannot be said entirely for personal income tax. Even today, there are few countries where you legally reside without paying a personal income tax.
Here are the list of countries with no personal income tax
Dubai does not levy personal income tax and corporate tax for most businesses and hence considered a tax-friendly destination. Apart from that, you do not need to pay capital gains taxes or withholding taxes on dividends and interests. However, oil companies are subject to a high tax rate of 55%. Also, there are some taxes and fees in place, such as a value-added tax (VAT), excise taxes, and customs duties on imports.
Qatar, like Dubai, do not impose personal income tax and corporate tax, but has a 5% VAT on all goods and services. Although personal income tax is not levied, some industries and specific activities may still attract certain taxes, duties, or regulatory fees.
Kuwait does not impose any personal taxes but, there are some indirect taxes and fees, such as customs duties on imports, that residents need to pay
UAE is a completely tax-free country. A residents do not pay personal income tax and has no obligations for tax registration or reporting.
Oman, like UAE, is a tax-free nation. Apart from exemption on personal income tax, there are no taxes on income from property, wealth, capital gains
Baharin is not entirely free of personal income tax as people earning over $40,000 has to pay a 15% tax but there are no taxes who earn lower than that. Also, oil & gas companies and foreign banks are subjet to 40% taxes.
Bahaman citizens do not have to pay taxes on personal income, capital gains, inheritance, or gifts but they VAT on good and services and stamp tax revenue
Monaco offers zero income tax, but companies are subject to 10% taxes
Cayman Islands has no income tax, no payroll, capital gains and withholding tax. Additionally, this island nation has no corporate tax
Bermuda has personal income tax, corporate tax, and capital gains tax. However, residents have to pay a 5.5% payroll tax
How theese countries generate income without collecting a personal income tax?
As per Global Residence Index, countries, which don’t collect personal income taxes, can generate revenue from state-owned businesses such as oil and mineral exports, tourism, real estate, and other key industries. These governments also earn income by charging fees for services such as business registration, annual audit compliance, residence permits, vehicle registration and licenses, as well as road tolls.