The OECD defines tax as a compulsory unrequited payment to the government. A taxable base is the base amount on which the tax rate is applied—such as corporate income, personal income, or property.
One commonly used tool for comparing taxation levels across different countries is the marginal tax rate, which is simply the rate on the highest income tax bracket. In 2014, Aruba had the world’s highest top marginal rate, 59%, followed by Sweden, 57%, and Denmark, 55.6%. At the other end of the spectrum, besides a handful of countries that do not have personal income taxes, Guatemala showed the lowest top marginal rate, 7%.
There are many ways to compare the tax burden that different countries place on their citizens—for example, the lowest income tax rate in a country, the highest income tax rate, corporate tax rates, marginal tax rate thresholds, the highest or lowest tax wedge, and so on. However, comparing tax rates can be difficult, given complex tax laws and the varying perception of what constitutes a high tax burden by different groups within an economy. Which is why the marginal tax rate is often used as a common denominator.
The OECD defines it as the tax rate applicable to the top slice or bracket of a taxpayer’s income or other taxable income, where the relevant tax on such items is levied at progressive rates.
In general, tax regimes may be progressive—where tax rates increase as the taxable base increases—regressive—where the tax rate decreases as the taxable base increases—or proportional (also called a flat tax rate)—where the tax rate stays the same regardless of the size of taxable base. A tax system may use different taxation methods for different types of income—for example, a progressive tax for income tax and a flat tax for sales tax.
Many countries now use aspects of progressive tax—in particular as a taxation method for individual income tax. The US, for example, uses a progressive tax regime for taxing individual wage income.
For the 17 years from 1965-1981, the top individual marginal tax rate for American taxpayers was 70%—double the 35% top rate for 2010 (Source: Internal Revenue Service, BTN Research). After a tax increase in 2012, which brought it to about 40%, the US now has the highest marginal rate among NAFTA partners, versus Mexico’s 30% and Canada’s 29%.
According to October 2014 data from KPMG’s Individual Income Tax Rates table, top personal income rates across the world steadily declined from 2003 to 2009, rose, on average, in 2010, fell again in 2011, albeit slightly, and inched back up starting in 2012 as a lingering economic crisis did not help abate governments’ concerns over ballooning deficits.
KPMG’s Individual Income Tax Rates(Values express in percentage)
Country |
2006 |
2007 |
2008 |
2009 |
2010 |
2011 |
2012 |
2013 |
2014 |
2015 |
|---|---|---|---|---|---|---|---|---|---|---|
| Afghanistan | 20 | 20 | 20 | 20 | 20 | 20 | 20 | 20 | ||
| Albania | 25 | 10 | 10 | 10 | 10 | 10 | 10 | 23 | 23 | |
| Algeria | 35 | 35 | 35 | |||||||
| Angola | 15 | 15 | 15 | 15 | 17 | 17 | 17 | 17 | 17 | 17 |
| Anguilla | 0 | 0 | 0 | |||||||
| Antigua and Barbuda | 25 | 25 | 25 | |||||||
| Argentina | 35 | 35 | 35 | 35 | 35 | 35 | 35 | 35 | 35 | 35 |
| Armenia | 20 | 20 | 20 | 20 | 20 | 20 | 25 | 25 | 36 | 36 |
| Aruba | 60.06 | 58.95 | 58.95 | 58.95 | 58.95 | 58.95 | 58.95 | 58.95 | 58.95 | 58.95 |
| Australia | 47 | 45 | 45 | 45 | 45 | 45 | 45 | 45 | 45 | 45 |
| Austria | 50 | 50 | 50 | 50 | 50 | 50 | 50 | 50 | 50 | 50 |
| Bahamas | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Bahrain | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Bangladesh | 25 | 25 | 25 | 25 | 25 | 25 | 25 | 25 | 30 | 30 |
| Barbados | 35 | 35 | 35 | 35 | ||||||
| Belarus | 12 | 12 | 13 | |||||||
| Belgium | 50 | 50 | 50 | 50 | 50 | 50 | 50 | 50 | 50 | 50 |
| Bermuda | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Bonaire, Saint Eustatius and Saba | ||||||||||
| Bosnia and Herzegovina | 10 | 10 | 10 | 10 | 10 | 10 | 10 | 10 | 10 | 10 |
| Botswana | 25 | 25 | 25 | 25 | 25 | 25 | 25 | 25 | 25 | 25 |
| Brazil | 27.5 | 27.5 | 27.5 | 27.5 | 27.5 | 27.5 | 27.5 | 27.5 | 27.5 | 27.5 |
| Brunei Darussalam | 0 | |||||||||
| Bulgaria | 24 | 24 | 10 | 10 | 10 | 10 | 10 | 10 | 10 | 10 |
| Canada | 29 | 29 | 29 | 29 | 29 | 29 | 29 | 29 | 29 | 29 |
| Cayman Islands | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Chile | 40 | 40 | 40 | 40 | 40 | 40 | 40 | 40 | 40 | 40 |
| China | 45 | 45 | 45 | 45 | 45 | 45 | 45 | 45 | 45 | 45 |
| Colombia | 38.5 | 34 | 33 | 33 | 33 | 33 | 33 | 33 | 33 | 33 |
| Congo | 30 | 30 | ||||||||
| Congo (Democratic Republic of the) | 30 | 30 | ||||||||
| Costa Rica | 15 | 15 | 15 | 15 | 15 | 15 | 15 | 15 | 15 | 15 |
| Croatia | 45 | 45 | 45 | 45 | 40 | 40 | 40 | 40 | 40 | 40 |
| Curacao | 49 | 49 | 48.25 | |||||||
| Cyprus | 30 | 30 | 30 | 30 | 30 | 35 | 35 | 35 | 35 | 35 |
| Czech Republic | 32 | 32 | 15 | 15 | 15 | 15 | 15 | 22 | 22 | 22 |
| Denmark | 59 | 59 | 62.28 | 62.28 | 55.38 | 55.38 | 55.38 | 55.38 | 55.56 | 55.41 |
| Dominican Republic | 25 | 25 | 25 | |||||||
| Ecuador | 25 | 25 | 35 | 35 | 35 | 35 | 35 | 35 | ||
| Egypt | 34 | 20 | 20 | 20 | 20 | 20 | 20 | 25 | 25 | 22 |
| El Salvador | 30 | 30 | 30 | |||||||
| Estonia | 21 | 21 | 21 | 21 | 21 | 21 | 21 | 20 | ||
| Fiji | 31 | 31 | 31 | 31 | 31 | 31 | 31 | 20 | 20 | 20 |
| Finland | 51.4 | 51 | 50.7 | 49.8 | 49.6 | 49.17 | 49 | 49 | 49 | 52.35 |
| France | 40 | 40 | 40 | 40 | 41 | 41 | 45 | 45 | 45 | 45 |
| Georgia | 12 | 12 | 25 | 20 | 20 | 20 | 20 | 20 | 20 | 20 |
| Germany | 42 | 45 | 45 | 45 | 45 | 45 | 45 | 45 | 45 | 45 |
| Gibraltar | 42 | 40 | 40 | 40 | 40 | 40 | 40 | 40 | 40 | |
| Greece | 40 | 40 | 40 | 40 | 45 | 45 | 45 | 42 | 42 | 42 |
| Guatemala | 31 | 31 | 31 | 31 | 31 | 31 | 31 | 7 | 7 | 7 |
| Guernsey | 20 | 20 | 20 | 20 | 20 | 20 | 20 | 20 | 20 | 20 |
| Honduras | 25 | 25 | 25 | 25 | 25 | 25 | 25 | 25 | 25 | 25 |
| Hong Kong SAR | 16 | 16 | 15 | 15 | 15 | 15 | 15 | 15 | 15 | 15 |
| Hungary | 36 | 36 | 36 | 36 | 32 | 16 | 16 | 16 | 16 | 16 |
| Iceland | 36.7 | 35.7 | 35.7 | 37.2 | 46.12 | 46.21 | 46.24 | 46.24 | 46.24 | 46.24 |
| India | 30 | 30 | 30 | 30 | 30 | 30 | 30 | 33.99 | 33.99 | 33.99 |
| Indonesia | 35 | 35 | 35 | 30 | 30 | 30 | 30 | 30 | 30 | 30 |
| Ireland | 42 | 41 | 41 | 46 | 47 | 48 | 48 | 48 | 48 | 48 |
| Isle of Man | 18 | 18 | 18 | 18 | 20 | 20 | 20 | 20 | 20 | 20 |
| Israel | 49 | 48 | 47 | 46 | 45 | 45 | 48 | 50 | 50 | 50 |
| Italy | 43 | 43 | 43 | 43 | 43 | 43 | 43 | 43 | 43 | 43 |
| Jamaica | 25 | 25 | 25 | 25 | 35 | 25 | 25 | 25 | 25 | 25 |
| Japan | 50 | 50 | 50 | 50 | 50 | 50 | 50 | 50.84 | 50.84 | 50.84 |
| Jersey | 20 | 20 | 20 | 20 | 20 | 20 | 20 | 20 | 20 | 20 |
| Jordan | 25 | 25 | 25 | 25 | 25 | 14 | 14 | 14 | 14 | 14 |
| Kazakhstan | 20 | 10 | 10 | 10 | 10 | 10 | 10 | 10 | 10 | 10 |
| Kenya | 30 | 30 | 30 | 30 | ||||||
| Korea, Republic of | 35 | 35 | 35 | 35 | 35 | 35 | 38 | 38 | 38 | 38 |
| Kuwait | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Latvia | 25 | 25 | 25 | 23 | 26 | 25 | 25 | 24 | 24 | 23 |
| Lebanon | 20 | 20 | ||||||||
| Lithuania | 33 | 27 | 24 | 15 | 15 | 15 | 15 | 15 | 15 | 15 |
| Luxembourg | 39 | 39 | 39 | 39 | 39 | 42 | 41.34 | 41.34 | 41.34 | 43.6 |
| Macau | 12 | 12 | 12 | 12 | 12 | 12 | 12 | 12 | 12 | 12 |
| Macedonia | 10 | 10 | 10 | |||||||
| Malawi | 30 | 30 | 30 | 30 | 30 | 30 | 30 | 30 | 30 | |
| Malaysia | 28 | 28 | 28 | 27 | 26 | 26 | 26 | 26 | 26 | 25 |
| Malta | 35 | 35 | 35 | 35 | 35 | 35 | 35 | 35 | 35 | 35 |
| Mauritius | 30 | 22.5 | 15 | 15 | 15 | 15 | 15 | 15 | 15 | |
| Mexico | 29 | 28 | 28 | 28 | 30 | 30 | 30 | 30 | 30 | 35 |
| Moldova | 18 | 18 | ||||||||
| Mongolia | 10 | 10 | 10 | |||||||
| Montenegro | 9 | 9 | 9 | |||||||
| Morocco | 38 | 38 | 38 | |||||||
| Mozambique | 32 | 32 | 32 | 32 | 32 | 32 | 32 | 32 | 32 | |
| Myanmar | 20 | 20 | 20 | |||||||
| Namibia | 37 | 37 | 37 | |||||||
| Netherlands | 52 | 52 | 52 | 52 | 52 | 52 | 52 | 52 | 52 | 52 |
| Netherlands Antilles | 49 | 49 | ||||||||
| New Zealand | 39 | 39 | 39 | 38 | 35.5 | 33 | 33 | 33 | 33 | 33 |
| Nicaragua | 30 | 30 | 30 | 30 | 30 | 30 | 30 | |||
| Nigeria | 24 | 24 | 24 | 24 | 24 | |||||
| Norway | 47.8 | 47.8 | 47.8 | 47.8 | 47.8 | 47.8 | 47.8 | 47.8 | 47.8 | 47.2 |
| Oman | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Pakistan | 30 | 20 | 20 | 20 | 20 | 20 | 20 | 20 | ||
| Palestinian Territory | ||||||||||
| Panama | 27 | 27 | 27 | 27 | 25 | 25 | 25 | 25 | 25 | |
| Papua New Guinea | 45 | 42 | 42 | 42 | 42 | 42 | 42 | 42 | 42 | 42 |
| Paraguay | ||||||||||
| Peru | 30 | 30 | 30 | 30 | 30 | 30 | 30 | 30 | 30 | 30 |
| Philippines | 32 | 32 | 32 | 32 | 32 | 32 | 32 | 32 | 32 | 32 |
| Poland | 40 | 40 | 40 | 32 | 32 | 32 | 32 | 32 | 32 | 32 |
| Portugal | 42 | 42 | 42 | 42 | 45.88 | 46.5 | 46.5 | 48 | 48 | 48 |
| Puerto Rico | 33 | 33 | 33 | |||||||
| Qatar | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Romania | 16 | 16 | 16 | 16 | 16 | 16 | 16 | 16 | 16 | 16 |
| Russia | 13 | 13 | 13 | 13 | 13 | 13 | 13 | 13 | 13 | 13 |
| Samoa | 27 | 27 | ||||||||
| Saudi Arabia | 0 | 0 | 0 | 0 | 0 | 0 | 0 | |||
| Senegal | 50 | 50 | ||||||||
| Serbia | 10 | 15 | 15 | 15 | 15 | 15 | 15 | 15 | 15 | 15 |
| Sierra Leone | 30 | 30 | ||||||||
| Singapore | 20 | 20 | 20 | 20 | 20 | 20 | 20 | 20 | 20 | 20 |
| Sint Maarten (Dutch part) | 47.5 | 47.5 | 47.5 | |||||||
| Slovakia | 19 | 19 | 19 | 19 | 19 | 19 | 19 | 25 | 25 | 25 |
| Slovenia | 50 | 41 | 41 | 41 | 41 | 41 | 41 | 50 | 50 | 50 |
| South Africa | 40 | 40 | 40 | 40 | 40 | 40 | 40 | 40 | 40 | 40 |
| Spain | 45 | 43 | 43 | 43 | 43 | 45 | 52 | 52 | 52 | 47 |
| Sri Lanka | 24 | 24 | 24 | |||||||
| Sudan | 20 | 20 | 15 | 15 | 15 | 15 | 15 | 15 | ||
| Swaziland | 33 | 33 | ||||||||
| Sweden | 56.82 | 56.77 | 56.66 | 56.74 | 56.56 | 56.55 | 56.6 | 57 | 57 | 57 |
| Switzerland | 40.4 | 40.4 | 40 | 40 | 40 | 40 | 40 | 40 | 40 | 40 |
| Syria | 20 | 20 | 20 | 20 | 22 | 22 | 22 | 22 | 22 | 22 |
| Taiwan | 40 | 40 | 40 | 40 | 40 | 40 | 40 | 40 | 40 | 45 |
| Tanzania | 30 | 30 | 30 | 30 | 30 | 30 | 30 | 30 | 30 | |
| Thailand | 37 | 37 | 37 | 37 | 37 | 37 | 37 | 35 | 35 | 35 |
| Trinidad and Tobago | 25 | 25 | 25 | |||||||
| Tunisia | 35 | 35 | 35 | 35 | 35 | 35 | 35 | 35 | 35 | 35 |
| Turkey | 35 | 35 | 35 | 35 | 35 | 35 | 35 | 35 | 35 | 35 |
| Uganda | 30 | 30 | 30 | 40 | 40 | 40 | 40 | |||
| Ukraine | 13 | 15 | 15 | 15 | 15 | 17 | 17 | 17 | 17 | 20 |
| United Arab Emirates | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| United Kingdom | 40 | 40 | 40 | 40 | 50 | 50 | 50 | 45 | 45 | 45 |
| United States | 35 | 35 | 35 | 35 | 35 | 35 | 35 | 39.6 | 39.6 | 39.6 |
| Uruguay | 0 | 25 | 25 | 25 | 25 | 25 | 30 | 30 | 30 | 30 |
| Venezuela | 34 | 34 | 34 | 34 | 34 | 34 | 34 | 34 | 34 | 34 |
| Vietnam | 40 | 40 | 40 | 35 | 35 | 35 | 35 | 35 | 35 | 35 |
| Yemen | 20 | 20 | 20 | 20 | 20 | 15 | 15 | 15 | 15 | 15 |
| Zambia | 35 | 35 | 35 | |||||||
| Zimbabwe | 36.05 | 48.93 | 48.93 | 36.05 | 36.05 | 36.05 | 46.35 | 45 | 45 | 51.5 |
| Africa average | 29.73 | 28.95 | 27.81 | 26.92 | 27.09 | 26.85 | 28.53 | 31.41 | 32.09 | 32.82 |
| Americas average | 31.63 | 30.85 | 31.38 | 31.3 | 31.86 | 31.3 | 31.76 | 31.48 | 31.34 | 31.78 |
| Asia average | 29.04 | 28.2 | 28.64 | 27.96 | 27.96 | 27.52 | 27.96 | 27.07 | 27.64 | 28.38 |
| Europe average | 35.62 | 35.04 | 33.49 | 33.15 | 33.62 | 33.4 | 33.66 | 32.74 | 32.7 | 32.19 |
| Oceania average | 40.5 | 39.25 | 39.25 | 39 | 38.38 | 37.75 | 37.75 | 33.4 | 33.4 | 35 |
| North America average | 32 | 32 | 32 | 32 | 32 | 32 | 32 | 34.3 | 34.3 | 34.3 |
| Latin America average | 31.58 | 30.7 | 31.3 | 31.22 | 31.84 | 31.22 | 31.73 | 31.25 | 31.08 | 31.55 |
| EU average | 39.9 | 39.32 | 37.56 | 37.03 | 37.3 | 37.09 | 37.46 | 38.37 | 38.38 | 37.94 |
| OECD average | 41.88 | 41.44 | 40.39 | 40.26 | 40.76 | 40.4 | 40.88 | 41.78 | 41.78 | 41.68 |
| Global average | 32.68 | 31.96 | 31.44 | 30.96 | 31.25 | 30.85 | 31.34 | 30.99 | 31.2 | 31.38 |
