6 Countries With No Income Tax

Considering a move abroad? While there are several factors to take into consideration — such as culture, weather, and location — one of the most important considerations is how the move will affect your bank account. One issue that affects cost of living is income tax. Certain countries levy more than a 50% tax on personal paychecks, the highest of which is Finland at 57.3%. If you’re looking to take home more of your hard-earned salary, you’ll be pleased to know that some nations don’t levy income tax at all. Here are six countries where you won’t pay a cent of income tax.

The Bahamas

Many are attracted to this Caribbean paradise for both its beautiful warm weather and its status as a tax haven. Not only do the Bahamas have no personal income tax, but there are also no taxes on capital gains, gifts, or inheritance. Instead, the Bahamas largely generates revenue through value-added taxes (VATs) and stamp duties on the purchase of property.

In order to be considered a resident of the Bahamas and qualify for the lack of income tax, you need to spend at least 183 days of the year living in the country, or establish a permanent residence there. Those who don’t fall into either of those categories are subject to withholding tax on personal income.

Monaco

Monaco hasn’t had any personal income tax since 1869, thanks to an ordinance from Charles III, Prince of Monaco. That said, while Monegasque residents won’t pay any tax on income generated within Monaco’s borders, they may still be subject to any taxes if they earn money elsewhere. It’s also worth noting that French nationals are required to pay income tax to the French government even if they reside in Monaco, as per a 1963 bilateral agreement between the French and Monegasque governments.

In addition to a lack of any income tax, Monaco also imposes no wealth tax or annual property tax on its residents, though there is a tax levied on profits earned from the sale of real estate and for industrial and commercial profits. But living in Monaco comes with one notable drawback — locals are prohibited from gambling, despite the country’s reputation as a gambling mecca. This rule dates back to the mid-1800s, when Princess Caroline forbade locals from gambling at Monegasque casinos so that they could maintain their money. 

Antigua and Barbuda

The push to eliminate income tax in this small Caribbean nation was first proposed in 2016 as part of a national tax reform initiative, and an amendment officially passed in 2019 that formally abolished income tax. There is, however, an exception for those who earn income through self-employment. For such earners, Antigua and Barbuda levies a progressive tax anywhere from 0% to 25%, based on total income.

For those considering moving to Antigua and Barbuda, the country offers a citizenship by investment program, which requires a minimum contribution of $230,000 to the country’s National Development Fund. While this may be a large amount to commit up front, the lack of income tax may be beneficial in the long run.

United Arab Emirates

Over 88% of the 11 million-plus people residing in the UAE are expatriates. Many people flock to the country for business opportunities and tax relief, as the Gulf state levies no tax on personal income — a trait shared by other nations on the Arabian Peninsula, including Saudi Arabia, Oman, and Kuwait. This lack of tax also applies to money earned through dividends, interest, and foreign real estate.

However, if you own and operate a business in the UAE, you may be subject to a tax on corporate profits, which was introduced in 2023. Those earning less than AED 375,000 (approximately $102,000 USD) are still entitled to a 0% tax rate, but those earning more are subject to a 9% tax on their profits.

Vanuatu

Vanuatu — made up of around 80 islands in the South Pacific — became an independent nation in 1980. The country soon began to attract new residents and investors thanks to its lax tax laws. There are no income taxes of any kind in Vanuatu, whether on personal income for residents, international investors, or corporations. To make up for lost revenue, the Vanuatu government levies an indirect 15% value-added tax on goods and services.

Even if you don’t live in Vanuatu full time, you can apply for tax residency through investment, which comes with a $130,000 financial payment into the country’s economy.

Brunei

The East Asian nation of Brunei offers tax relief across the board. There’s no income tax, nor any tax on export, sale, payroll, or manufacturing. The only exception applies to companies, which are subject to a 22% tax rate as per the Income Tax Act of 1949. 

However, there’s one quirk to be aware of for those who earn money in Brunei. Employees and employers must contribute 5% of their income to a government-run employee trust fund called the Tabung Amanah Pekerja. This program is a public pension fund akin to Social Security in the U.S.

A Note for U.S. Citizens and Green Card Holders

There are two countries in the world that impose a tax on the worldwide income of expatriates, no matter where they live: the United States and Eritrea. So, even if U.S. citizens move to a nation that provides income tax relief, they’ll still have to file U.S. taxes. In order to rid yourself of this tax burden, you’ll need to renounce either your U.S. citizenship or your green card.

Green card holders can fill out a Form I-407 to abandon their permanent residence status within the United States. Renouncing your citizenship, on the other hand, requires several steps — including obtaining a second passport, ensuring you’ve been tax compliant for the last five years, meeting with government officials, and filing one final tax return when the process is complete.