No Tax Countries: Tax-Free Countries in 2023
Hearing “no income taxes” is something that can make a High Net Worth Individual’s ears prop up too. It is more common for countries moving in the opposite direction to increase income taxes and place wealth taxes on their tax residents.
Countries like the United States (US) are one of two countries with citizenship-based tax. Regardless of where a US tax base is, they must submit and, more likely than not, pay taxes to the US government each year.
Is it Possible to Live in a Country with No Taxes?
Benjamin Franklin’s quote in 1789, “In this world, nothing can be said to be certain, except death and taxes”, is quite relevant for US citizens but not necessarily for other nationalities. There are a few countries that do not tax income but are still able to generate significant government revenue.
Countries can generate revenue from state-owned businesses such as oil and mineral exports, tourism, real estate, and other industries. The governments can also charge fees for certain services, company registration, annual audit fees, residence permits, car licenses and registration, and tolls.
Taxes are other ways to generate revenue but are not specifically related to an individual’s income. Property taxes can generate significant annual revenue. Stamp duty for sales and monthly rates and levies on municipal services and energy, water and gas usage if these run through a state enterprise.
Value Added Tax (VAT) can allow governments to generate revenue on certain goods and services. Effectively this is a type of consumption tax, making it popular in countries with no income tax. You do not pay taxes on how much you earn but rather on how much you spend.
Best Tax Countries Using Citizenship by Investment
One of the most attractive features of many countries that offer citizenship by investment program is their low or zero-tax laws. The Global Residence Index team are not a tax advisor, but they work with the best in the world. These expert partners can build an effective strategy to reduce your taxes, possibly to zero.
Governments in zero-income tax countries naturally make their offer of citizenship by investment program more attractive to investors. The lure of potentially reducing personal income tax can be a crucial differentiator to other programs.
The standard practice to obtain tax residence in a country is by being physically present for more than 183 days per year. There are caveats, with countries placing special allowances for homeowners or reducing the physical presence requirement by application.
The next section includes information on the best tax countries that GRI believes are worth considering as potential tax havens or have very low tax regimes.
Antigua and Barbuda
One thing that the beautiful islands of Antigua and Barbuda are famous for is their 365 beaches. Aside from the option of spending time on a new beach every day of the year, residents can enjoy zero income tax. The twin islands do not have any policies on taxing wealth, inheritance, dividends and capital gains.
VAT in Antigua and Barbuda is 15%, which is applied to most goods and services, including imports. Essential food items, medical supplies, educational materials, and certain exports are generally exempt from VAT.
Antigua attracts hundreds of companies that register and incorporate in Antigua and Barbuda under the International Business Corporations (IBC) act. These companies are exempt from paying income tax and tax on real estate, securities and other assets for fifty years.
High Net Worth Individuals looking to invest in the country will obtain a second passport starting at a $100,000 contribution plus a $30,000 government fee. The Antiguan passport is ranked thirty-first in the world. It has visa-free travel to over 150 countries and territories, including the UK, Europe’s Schengen area, South Africa, Kenya, Hong Kong, South Korea, and Singapore.
Saint Kitts and Nevis
Saint Kitts and Nevis has the strongest passport out of the five Caribbean countries offering citizenship by investment program. The oldest program passport has visa-free access to over 156 countries and territories. The islands are not a tax haven for individuals, but there are significant benefits to becoming a tax resident.
An individual will not have to pay taxes on capital gains, inheritance, and wealth taxes. The income tax policies are complex in Saint Kitts and Nevis. A non-tax resident (a citizen who does not live in Saint Kitts and Nevis) will not pay taxes on income or inheritance for residents and non-residents when not working for a local company.
Taxation of individuals employed by a local Saint Kitts company:
- 3.5% between $370 to $2,405;
- 10% between $2,405 to $ 2,960; and
- 12% over $2,960 per year.
There is a 5% social contribution from wages earned in Saint Kitts and Nevis. There is a withholding tax of 15% when a non-resident receives dividends, interest, and royalties from sources within the country.
VAT is 10% for all tourism-related activities, while 17% for other VAT items in Saint Kitts. Companies have a hefty 33% tax rate on their worldwide profit. Companies that work exclusively abroad can be exempt for up to fifteen years.
An individual can invest $125,000 into the Sustainable Growth Fund until the end of June before going up to $150,000. A family of four will cost $170,000 right now, but $195,000 after 1 July 2023.
The South Pacific island of Vanuatu can be ideal for international business persons, entrepreneurs and remote workers to make their home. The eighty-three island nation is fast becoming home to new tax residents each year as they use the tax-free policy on income from a salary, dividends, pensions and other revenues. The only real tax for individuals in Vanuatu of substance is a 12.5% tax on rental income from properties within Vanuatu.
Companies will enjoy a twenty-year tax exemption on annual profits. There is an annual $300 license fee. VAT comes in at 12.5% for most goods and services supplied and imported to Vanuatu by registered persons in the course of a taxable activity.
Individuals must not submit an annual personal tax return to the island’s customs and inland revenue department. However, you can obtain a tax clearance certificate from the department after becoming a tax resident.
The Vanuatu citizenship by investment program allows investors to become citizens after contributing $130,000 to a local development fund. The passport has visa-free access to 97 countries and territories worldwide and an incredible place to live permanently.
Residence and Citizenship by Investment Low Tax Country
Although the following countries are not countries with no income taxes, they do have special programs that lower taxes.
Maltas Exceptional Investor Naturalisation program is the only fast-track citizenship by investment program in the European Union. Citizens can become tax residents in low-income tax countries and apply for a special tax residence status, also known as the Global Residence Program (GRP). The program provides individuals a flat tax rate of 15% on foreign income remitted to Malta. There is a minimum tax liability of €15,000 per year. The program is open to EU and non-EU citizens meeting specific criteria.
To be eligible for the GRP, an individual must:
- Not be a Maltese national;
- Not have been a resident of Malta for the previous five years;
- Have a minimum annual income of €100,000 or hold assets worth at least €500,000; and
- Purchase or rent a property in Malta.
Greek Golden Visa and Non-Dom Program
Greece offers a special tax regime for Non-Domiciled (Non-Dom) Individuals. The program is designed to attract high-net-worth individuals and encourage investment in the Greek economy.
Under the program, eligible individuals can benefit from a flat tax rate of €100,000 per year on their foreign income, including income from sources such as dividends, interest, and capital gains. Foreign income is not subject to Greek income tax, except for income earned in Greece.
One better option might be for pensioners to become tax residents in Greece. Foreigners can enjoy a flat tax of 7% on their foreign pensions. The Greek Golden Visa allows investors to obtain permanent residence immediately after investing €250,000 to €500,000 in real estate or €400,000 in other qualifying investments.
Portugal Golden Visa and Non-Habitual Residence Program
One does not think of Portugal as a low-income tax country. However, the Non-habitual residence program can reduce taxes significantly for Non-EU residents.
Under the NHR program, eligible individuals may benefit from a flat income tax rate of 20% on certain types of income, such as foreign pension income, capital gains, and particular employment and self-employment income. The NHR program also provides for exemptions from high-value-added and scientific and technological activities. Pensioners will only need to pay 10% on their foreign-based pension.
An individual must spend more than 183 days per year in Portugal or have a dwelling in Portugal that is considered their habitual residence. The Portuguese Golden Visa program is one of the most popular routes to a residence and leads to citizenship after five years and minimal physical presence.
Other Popular Residence by Investment Countries with No Income Tax
Several other countries with no income tax can be exciting places to become a resident. Some have a path to citizenship, while others do not. However, they can be attractive for financial and lifestyle reasons.
Finding a no-income-tax country is difficult in today’s environment. Governments are increasing income tax rates around the world. However, our team can assist you with obtaining a second citizenship or Golden Visa residence that can legally help you lower your taxes.
If you are interested in any of the programs, why don’t you sign up for our free consultation?
Frequently Asked Questions
If a country has no income tax, how can it operate effectively?
The government will make revenue from state-owned enterprises, VAT, income from citizenship contributions, and other fees.
What is a tax resident, and how is tax residency calculated?
The general rule is to live in a country for 183 days yearly.
Will I be taxed if I become a citizen using the citizenship by investment program?
No, all citizenship by investment countries does not tax their citizens unless they are tax residents. However, many are tax-free countries.
How do I stop paying taxes as a US citizen?
US citizens need to have a second citizenship and passport. They then need to renounce their US citizenship to be fully exempt from paying US taxes, and obtain a residence permit on their second passport if they do not live in the country of that citizenship.
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Understanding Taxation in St. Kitts & Nevis
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St. Kitts & Nevis Passport: Validity Timeline and Renewal Process
How to Get Portuguese Citizenship
Benefits of Dual Citizenship
Obtaining a Bank Account in St. Kitts & Nevis
Moving to Portugal from the US – A True Deep Dive
Everything You Should Know About St. Kitts & Nevis
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