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Where to escape the high taxes

Now that New Labour is no longer “intensely relaxed about people getting filthy rich”, you may feel the urge to go elsewhere.

The chart below, compiled by Ernst & Young for UK tax rates of 40%, shows that the Czech Republic, the Slovak Republic and Mexico have some of the lowest rates of marginal income tax for high earners globally. Unfortunately, none are famed as financial services centres.

Marginal tax rates

More appealing for financiers, according to Alex Henderson at PriceWaterhouseCoopers (quoted in The Times), are Ireland and Switzerland.

However, Ireland and Switzerland are less appealing than they were.

Like the UK, the Irish government is also raising taxes on high earners. Even before it did this, it already deducted 42% of anything above €36,400 (32k) even before the new increases.

Meanwhile, Switzerland has recently moved to crack down on the ‘Pauschalbesteuerung’ system enjoyed by wealthy foreigners, which enabled them to pay tax only on five times the rental value of their home. In future, foreign residents of Switzerland will be taxed like the Swiss – according to their wealth and income.

Conspicuously absent from the chart above is Dubai, where income tax is zero and looks likely to stay that way. Also absent are Singapore and Hong Kong where the highest rates of income tax are 20% and 16% respectively.

Separately, the chart below from The Times shows the extent to which yesterday’s budget hits only the well off, and in particular families with a single high earner (which we suspect may apply disproportionately to bankers and spouses).

Tax impact

Source: The Times

Comments (10)

Comments
  1. working late sarah

  2. I am happy…i decided a long time ago to escape from the taxation nightmare…

    Why Hong Kong is not included? there is pretty good…and it is definitely a great financial center

  3. Sorry fatcat – late night oversight. Hong Kong now added in.

    Sarah, Editor, eFinancialCareers Reply
     
  4. Please could the filthy rich go elsewhere. Their “wealth generation” has cost us 700 billion at current estimates.

  5. Yes let’s increase our tax share 0.4% by taxing at 50% over 150K….I mean these same people already pay >50% of the entire income tax bill. Surely if we lose them we won’t be totally screwed!

    Lefties_Are_Poison Reply
     
  6. Oh come on, the vast majority of the UK population are never going to be in the position of worrying about what to do if they’re taxed at 50% over 150K – why should I care, I’m never going to be earning such sums of money, yet I’m still going to be working as hard, along with the teachers/nurses/doctors etc. – people that have REAL jobs. The whole argument just exposes these people for being the parasites they are.

  7. Note that Denmark and Sweden have very high taxes and immense quality of life. You get what you pay for.

  8. How about Singapore? My eyesight’s failing but I can’t see it listed among the tiny font!

  9. John – Singapore’s not on the graph, but it’s mentioned in the text.

    Sarah, Editor, eFinancialCareers Reply
     
  10. The 50% tax will not apply to me because I will have London left before they apply!

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