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Guess which country has the highest income tax?

Last updated on: August 01, 2013 10:58 IST

Guess which country has the highest income tax?

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With employees across India rushing to complete their income-tax formalities, let's take a look at countries that have some of the highest income-tax rates. While Scandinavian nations are famous for their high rates, there are some countries, such as Saudi Arabia, the United Arab Emirates and Kuwait, that don't levy any income tax at all.

NOTE: Rates mentioned are of highest income slab.

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Image: People submit their papers inside the Income Tax office in New Delhi.
Photographs: Mansi Thapliyal/Reuters

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India

Income tax in the highest slab: 30 per cent

Although many Indians feel they pay high taxes, compared to some countries its tax rate is not that high. There are some nations that levy more than 50 per cent income tax. Naturally, the biggest revenue generator for the government is income tax.

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Image: A farmer collects marigold flowers in a garden to be sold at a wholesale market in Noida.
Photographs: Parivartan Sharma/Reuters

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Aruba

Income tax in the highest slab: 58.95 per cent

Overall rank: 1

The island in the southern Caribbean Sea has the highest income tax rate in the world. With nearly 59 per cent as income tax, it beats even Scandinavian countries famous for their high income tax rates.

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Image: A kite surfer is silhouetted at the sunset while surfing a wave on his board in Aruba.
Photographs: Carlos Garcia/Reuters

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Sweden

Income tax in the highest slab: 56.6 per cent

Overall rank: 2

Sweden follows Aruba in charging high income tax. Workers in Sweden contribute taxes to three separate sections of government: municipality, county council and central government.

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Image: A view of Stockholm.
Photographs: Ints Kalnins/Reuters

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Denmark

Income tax in the highest slab: 55.56 per cent

Overall rank: 3

In Denmark, employees are charged 8 per cent even before income tax kicks in. The government calls this "gross tax". Even those who are self-employed are charged this gross tax.

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Image: A dog sits as he waits next to his owner to cross a street in Copenhagen.
Photographs: Radu Sigheti/Reuters

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The Netherlands

Income tax in the highest slab: 52 per cent

Overall rank: 4

The Netherlands has a system that levies taxes on wages, profits, social security benefits and pensions. Just like India, there are tax brackets each with their own tax rates.

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Image: Cyclists visit a tulip field in Noordwijk.
Photographs: Michael Kooren/Reuters

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Spain

Income tax in the highest slab: 52 per cent

Overall rank: 5

Personal income tax in Spain was introduced in 1900. It represents over 50 per cent of government revenues, according to Wikipedia.

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Image: Agbar Tower in Barcelona.
Photographs: Albert Gea/Reuters

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Finland

Income tax in the highest slab: 51.13 per cent

Overall rank: 6

All taxes are collected by state agencies who then give them to local authorities, municipalities and other institutions.

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Image: Tourists take part in reindeer safari at Arctic Circle near Rovaniemi, northern Finland.
Photographs: Kacper Pempel/Reuters

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Slovenia

Income tax in the highest slab: 50 per cent

Overall rank: 7

In Slovenia, taxes are paid every month, that is they are withheld by companies when the salary is sent to banks. If a resident is paid salary by a foreign company, tax advances are paid on tax return.

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Image: Girls make their way to church for their horses to be blessed by priests on St Stephens day in Srednja Vas.
Photographs: Srdjan Zivulovic/Reuters

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Japan

Income tax in the highest slab: 50 per cent

Overall rank: 8

 In Japan, taxes are paid on income, property and consumption on three levels: national, prefectural and municipal.

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Image: Mt Fuji, covered with snow, is seen through Shinjuku skyscrapers in Tokyo.
Photographs: Kimimasa Mayama/Reuters
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Israel

Income tax in the highest slab: 50 per cent

Overall rank: 9

In Israel, the major taxes are income tax, capital gains tax, VAT and land appreciation tax.

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Image: A view of central Tel Aviv with the Mediterranean Sea in the background.
Photographs: Nir Elias/Reuters

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Belgium

Income tax in the highest slab: 50 per cent

Overall rank: 10

Residents of Belgium pay personal income tax on their total income from all worldwide sources on a sliding scale.

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Image: A miniature reproduction of the Acropolis is seen in the Mini-Europe park, where all the models are built at a scale of 1:25, in Brussels.
Photographs: Laurent Dubrule/Reuters

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Austria

Income tax in the highest slab: 50 per cent

Overall rank: 11

In Austria, the income tax was established up to 50 per cent on a four-bracket structure. There are separate taxes for married people.

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Image: People people enjoy the view from the Bettelwurf mountain on a sunny summer day in the western Austrian village of Absam.
Photographs: Dominic Ebenbichler/Reuters

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Ireland

Income tax in the highest slab: 48 per cent

Overall rank: 12

In Ireland there is an income tax, a VAT and several other taxes. Workers pay pay-as-you-earn based on their salary.

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Image: Artist and poet Barry Edgar Pilcher, 69, plays the saxaphone on the Island of Inishfree in County Donegal. Pilcher is the only inhabitant of the island on which he has lived for the past 20 years. He only leaves the island once a week to collect his pension and buy groceries on the mainland.
Photographs: Cathal McNaughton/Reuters

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Portugal

Income tax in the highest slab: 48 per cent

Overall rank: 13

All income generated by a resident in Portugal, such as salaries, is taxed through Personal Income Tax.

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Image: A man walks past a wall decorated with with comics characters on a street in Lisbon.
Photographs: Jose Manuel Ribeiro/Reuters

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Norway

Income tax in the highest slab: 47.8 per cent

Overall rank: 14

Central government, county municipality and municipality levy taxes in Norway. The tax level in Norway is among the highest in the world.

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Image: Royal Palace at the end of Karl Johans Gate in Oslo.
Photographs: Suzanne Plunkett/Reuters

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St Maarten

Income tax in the highest slab: 47.5 per cent

Overall rank: 15

St Maarten tax system consist of taxes on corporations and taxes on individuals. For tax purposes, corporations are classified as either resident or non-resident.

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Image: A court in Philipsburg, St Maarten.
Photographs: Germanramos/Wikimedia Commons

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Zimbabwe

Income tax in the highest slab: 46.35 per cent

Overall rank: 16

Individuals pay tax only on Zimbabwe-source earnings or income deemed to be Zimbabwe source.

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Image: Children play outside thatched roof huts in Domboshawa, around 80km east of Harare.
Photographs: Darrin Zammit Lupi/Reuters

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Iceland

Income tax in the highest slab: 46.22 per cent

Overall rank: 17

Income tax in Iceland is deducted at source. Up to 8 per cent of gross income may be cut for private pension insurance.

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Image: Children skate on the ice of the frozen Tjoernin lake in central Reykjavik.
Photographs: Darrin Zammit Lupi/Reuters

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Germany

Income tax in the highest slab: 45 per cent

Overall rank: 18

Federal government, states as well as municipalities levy taxes in Germany. There are many direct and indirect taxes exist, among them income tax and VAT are major players.

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Image: Tourists Caro and Anna from Munich lie in a bed mounted to a rental bike as they ride along Friedrichstrasse in central Berlin.
Photographs: Thomas Peter/Reuters

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United Kingdom

Income tax in the highest slab: 45 per cent

Overall rank: 19

Central government and local governments are just two entities that may levy taxes in the United Kingdom.

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Image: Torch bearer Amelia Hempleman-Adams, 17, stands on top of a capsule on the London Eye as part of the torch relay ahead of the London 2012 Olympic Games.
Photographs: Luke MacGregor/Reuters

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China

Income tax in the highest slab: 45 per cent

Overall rank: 20

In China, taxes are the most important source of revenue generation. As they are the biggest contributor to national income, they form a major part of macro-economic regulation and has a big impact on economic and social development.

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Image: A view of Beijing.
Photographs: Jason Lee/Reuters

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Australia

Income tax in the highest slab: 45 per cent

Overall rank: 21

Personal earnings (such as salary and wages), business income and capital gains are three sources of income tax in Australia. Like China, income tax play a big role in the nation's revenue scheme.

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Image: Shoppers at an outdoor mall in Melbourne.
Photographs: Mick Tsikas/Reuters

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Luxembourg

Income tax in the highest slab: 43.6 per cent

Overall rank: 22

For workers in Luxembourg, the basic types of tax and social security costs are income tax, social security, investment income and capital gains.

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Image: Petrusse river near old fortifications of the city of Luxembourg.
Photographs: Laurent Dubrule/Reuters

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Italy

Income tax in the highest slab: 43 per cent

Overall rank: 23

If you are a tax resident in Italy (which means living there for more than 183 days in the calendar year), Italy taxes you on income generated anywhere in the world.

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Image: A view of St Peter's Square in Rome.
Photographs: Alessandro Bianchi/Reuters

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Greece

Income tax in the highest slab: 42 per cent

Overall rank: 24

worker in Greece is liable for tax on their income as an employee and on income as a self-employed. Income tax in Greece is based on income brackets.

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Image: A cafe with the Acropolis hill in the background in central Athens.
Photographs: John Kolesidis/Reuters

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South Africa

Income tax in the highest slab: 40 per cent

Overall rank: 25

Central government and local government are just two entities that levy taxes in South Africa. Federal government generates revenue primarily from income tax and corporation tax.


Image: A view of Johannesburg.
Photographs: Euroluftbild.de/Reuters

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