It’s the dream of self-employment. Working remotely from a pristine beach in Bali, or a Californian coffee shop, or half-way up a Himalayan mountain. It’s an achievable goal for developers, designers and content creators (although not quite as easy to attain for plumbers and electricians) – but one that does come with tax implications.

So let’s take a whistle-stop tour of the world and see where you’d pay the most tax.

Heading East- Europe

In Western Europe and Scandinavia, you’ll see fairly similar top rates of income tax. From France’s 55.4% top rate through Spain’s 54%, Ireland’s 48%, the UK’s 45% and Germany’s 47.5%, there aren’t huge savings to be found.

Head further East though, and things drop off substantially.

Romania has Europe’s lowest top rate of income tax at just 10%, with Hungary (14%), Moldova (12%), Georgia (20%) and Ukraine (19.5%) all asking for less than a quarter of your earnings at the highest possible rate.
Just steer clear of Denmark. At 55.9% for top earners, Danes have the highest income tax rates in Europe. So much for bringing home the Danish bacon.
But it gets worse! Although Finland’s top rate is lower than Denmark’s, the addition of 10.8% local municipal taxes and a 2.25% church tax take them up to second in the world.

North America – location matters

While there’s a federal income tax in the USA, that’s not all you’d need to pay. The highest earners pay federal taxes at a 37% rate – putting them on a par with the 21st highest rate in Europe (Poland) – there are state income taxes in most states.

Most but not all.
Alaska, Florida, Nevada, South Dakota, Texas, Washington and Wyoming all levy no state income taxes at all, New Hampshire only taxes people on dividends, and it’s a rare state that’d impose a tax higher than 10%.

Of course, everyone in the USA has to submit a tax return to the IRS, which makes things a little more complicated, but you’ll see much lower tax rates in the US than you will in the great white North.

Further afield – steer clear of Ivory Coast and Japan

It might have beach resorts, rainforests and a brilliant national football team, but Ivory Coast also has the highest rate of income tax in the world. Their 60% top rate would make even a Dane blush, and leave Texans gasping for air.

Rounding out the top three along with those poor, put-upon Finns are Japan’s tax-payers. The world’s third largest economy also has the third highest tax rate, with high earners giving away 45% of their wage to the tax man. That makes Japan an outlier in Asia, which has no other countries making the top 20.

You might also want to avoid setting up in Aruba and Israel, who are the only other non-European countries at the top of the table.

Pay the right amount of tax, wherever in the world you’re working!

No matter where you’re working, you need to pay the right tax. So unless you’re lucky enough to work in the Maldives – where non-nationals pay a 0% rate – you might need a little help.

Here in the UK, the best place to find that help is with Penny Ledger.
Just send us all your invoices and receipts, and our fully qualified accountants do the rest. We’ll sort out your tax returns so you don’t overpay, leaving you with more money to plan that escape to an idyllic desert island where income tax rates are low and demand for self-employed painter decorators is high.

After all, we can all dream, right?