Published On: Tue, Jan 30th, 2018

Budget 2018: Rate of Income tax in top 10 countries by GDP

crescendo, taxpayers are concerned about the new income tax slabs that will be announced on February 1 as these slabs would determine the amount an individual will have to pay as taxes on their income in FY19.

Currently, Indians in the lowest personal income slab of Rs 2.5 lakh – 5 lakh bracket pay five percent tax while individuals who fall in the highest income slab of Rs 1 crore and above, pay 30 percent tax, education cess plus 15 percent surcharge. Personal Income Tax Rate in India averaged at 31.53 percent until 2016, reaching an all time high of 35.54 percent in 2016 and a record low of 30.00 percent in 2005.

While the concept of taxing income is quite common in other countries, the percentage of tax and tax slabs vary.

Click here to calculate your Income Tax for FY19

Here’s a list of income tax in top 10 countries by GDP across the globe: 

> United States

In the United States, the Personal Income Tax Rate refers to the Top Marginal Federal Tax Rate applied on taxable income over USD 406,751 for a single filer. The individuals may be also subjected to an additional state taxes.

The Personal Income Tax Rate in the United States stands at 39.60 percent. According to the Trading Economics, the personal Income Tax Rate in the United States averaged 36.42 percent until 2016 since 2004. It reached an all time high of 39.60 percent in 2013 and a record low of 35.00 percent in 2005.

> China 

In China, an individual is taxed on one’s income by category. China’s IIT law groups personal income into 11 categories including employment income, royalty income, rental income and others. Each income category has its own tax rate(s), allowable deduction, and so on.

Overall, the Personal Income Tax Rate imposed on an individual stands at 45 percent. The tax, which is imposed on different sources of income like labour, pensions, interest and dividends, averaged 45.00 percent until 2016 from 2003. It reached an all time high of 45.00 percent in 2004 and a record low of 45.00 percent in 2004.

In November 2017, revenue from personal income tax in China had amounted to about 84.6 billion yuan.

Also Read: Three simple tricks to save income tax without investing fresh funds

> Japan 

In Japan, permanent resident taxpayers are taxed on their worldwide income. Non-resident taxpayers are taxed only on their Japan-sourced income. Non-permanent resident taxpayers are taxed on their Japan-sourced income plus potentially part of their non-Japan-sourced income that is paid in or remitted to Japan.

Income tax is applicable to an income of 1,950,000 yen and above and the tax percent increases with increase in an individual’s income.

The personal Income Tax Rate in Japan stands at 55.95 percent. It averaged 50.65 percent until 2016 from 2004. The income tax reached an all time high of 55.95 percent in 2016 and a record low of 50.00 percent in 2005.

Watch — Budget 2018: We expect significant changes in income tax slabs, say taxpayers

> Germany

All resident individuals are taxed on their worldwide income of EUR 8,820 and above in Germany.  The taxable income covers income from the various categories including agriculture and forestry, trade or business, independent professions, employment, capital investment, rents and royalties and other income.

The Personal Income Tax Rate in Germany stands at 47.50 percent, according to the Trading Economics. It averaged at 50.06 percent until 2016 from 1995 , reaching an all time high of 57.00 percent in 1996 and a record low of 44.30 percent in 2005.

> France 

Individuals, whether French or foreign nationals, who have their tax domicile in France are generally subject to personal income tax on worldwide income unless excluded by a tax treaty.

France has progressive tax rates from 0 percent to 45 percent, plus a surtax of 3 percent on the portion of income that exceeds EUR 250,000 for a single person and EUR 500,000 for a married couple and a surcharge of 4 percent for income that exceeds EUR 500,000 for a single person and EUR 1 million for a married couple.

According to the Trading Economics, the personal Income Tax Rate in France averaged at 52.55 percent until 2016from 1995. It reached an all time high of 59.60 percent in 1996 and a record low of 45.40 percent in 2006.

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> United Kingdom

If an individual is resident and domiciled in the United Kingdom, they will be taxed on their worldwide income and capital gains. A basic tax rate of 20 percent is levied on an income above 33,500 GBP. The personal income tax rate goes up to 45 percent.

According to Trading Economics, the personal Income Tax Rate in the United Kingdom averaged at 42.27 percent until 2016 from 1995. It reached an all time high of 50 percent in 2010 and a record low of 40 percent in 1996.

> Brazil

Residents of Brazil are taxed on their worldwide income, and non-residents are taxed exclusively at source on their Brazilian-sourced income. The source of income is determined by the place where the income payer is located, irrespective of where the work is performed.

Brazil personal income tax rate applicable on income above 1,903.99 BLR is progressive, which ranges from 0 to 27.5 percent. The tax is collected by the Federal Government.

Brazil’s Income Tax Rate averaged at 27.50 percent until 2016 from 2003. It reached an all time high of 27.50 percent in 2004 and a record low of 27.50 percent in 2004.

> Italy

In Italy, the individual is subject to the following income taxes — National income tax or Personal Income Tax, Regional income tax and Municipal income tax.

National income tax is levied at progressive tax rate on all income, while the regional and municipal tax depends on the region of residence and municipality of the residence.

The Personal Income Tax Rate in Italy stands at 48.80 percent. It averaged at 46.84 percent from 1995 until 2016, reaching an all time high of 51.00 percent in 1996 and a record low of 44.10 percent in 2005.

Also Read — Budget 2018: A look at schemes that the Modi govt inherited and improved

> Canada 

Individuals resident in Canada are subject to Canadian income tax on worldwide income. In addition to federal income tax, an individual who resides in, or has earned income in, any province or territory is subject to provincial or territorial income tax.

The federal tax rates are applicable on an income of 45,916 CAD or Canadian Dollars.

As per the Trading Economics, the personal Income Tax Rate in Canada stands at 33 percent. It averaged at 29.29 percent until 2016 from 2003 , reaching an all time high of 33.00 percent in 2016 and a record low of 29.00 percent in 2004.

> Korea

A taxpayer in Korea is subject to income tax on all incomes derived from sources both within and outside Korea. Currently, the individual income tax rates on global income range from 6 percent to 40 percent before applying the local income tax (approximately 10 percent of income tax liability).

According to Trading Economics, the personal Income Tax Rate in South Korea stands at 38 percent. It reached an all time high of 38 percent in 2012 and a record low of 35 percent in 2005

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[“Source-moneycontrol”]