Countries With the Lowest Tax Rates in the World (2025-2026)

Seven jurisdictions in this article charge no income tax on salaries: the UAE, Qatar, Saudi Arabia, Bahrain, Kuwait, the Cayman Islands, and the Bahamas. On the corporate side the picture is different. Hungary charges 9%, Bulgaria 10%, and Ireland 12.5% on trading profits, while a 15% OECD floor now catches the largest multinationals everywhere. This article separates the four things people mean by "lowest tax," names who pays the bills when income is untaxed, and shows where the headline rates mislead.

Educational only, not tax or financial advice. Tax law changes often and depends on your citizenship, residence, and income. Consult a licensed tax professional before making any decision based on this material.

Key takeaways

• Six Gulf states and several island jurisdictions levy no personal income tax on employment income. Oman has announced one from January 1, 2028.
• The lowest corporate rates in the European Union are Hungary (9%) and Bulgaria (10%). Cyprus moved from 12.5% to 15% on January 1, 2026, and Lithuania is rising to 17% in 2026.
• The OECD's Pillar Two rules set a 15% minimum effective rate for groups with consolidated revenue of €750 million or more, so a 0% or 9% headline rate no longer means 0% or 9% for the biggest companies.
• Ireland's low rate comes with a concentration risk: in 2024 the top 10 companies paid 57% of net corporation tax, per Irish Revenue.
• Moving to a zero-tax country does not end a tax bill for US citizens, who file on worldwide income.

What "lowest tax" actually means

Ask five people which country has the lowest taxes and you will get five answers, because the question hides four separate yardsticks. Personal income tax is what an employee sees on a payslip. Corporate income tax is what a company pays on profit. Consumption taxes such as VAT (value-added tax, a sales tax collected at each stage of production) are paid by everyone who buys things. And the total burden is all of those plus payroll levies, property taxes, and social contributions, divided by the size of the economy.

A country can be low on one yardstick and high on another. Hungary charges a 9% corporate rate yet applies a general VAT rate of 27%, according to PwC's Worldwide Tax Summaries. The UAE collects no personal income tax but charges 5% VAT and 100% excise on tobacco, per PwC's UAE summary. Reading any one number in isolation gives a false ranking.

Yardstick	Who feels it	Typical low-tax example	What it hides
Personal income tax	Employees, the self-employed	UAE, Qatar, Cayman Islands	VAT, fees, and social contributions
Statutory corporate rate	Companies	Hungary 9%, Bulgaria 10%	Deductions, local taxes, minimum taxes
Effective corporate rate	Companies after reliefs	Singapore (see below)	Varies by firm; not published as one number
Total tax burden (% of GDP)	The whole economy	Resource-funded states	Revenue from oil and fees is not "tax" in the data

Four ways to be "low tax." A country that wins one rarely wins all four.

The statutory rate is the number written in the law. The effective rate is what a company actually pays after deductions, exemptions, and credits. Where this article gives both, it says so. Where it gives only one, it is the statutory rate.

Who charges no personal income tax

Employment income is untaxed in a small, stable group of countries. The table lists those confirmed in PwC's country summaries, each of which states the position directly. Dates and exceptions matter, so the notes column is not decoration.

Jurisdiction	Personal income tax on salary	Notes (source: PwC Worldwide Tax Summaries)
United Arab Emirates	None	No federal or emirate-level personal income tax; individuals running a business with turnover above AED 1 million face 9% corporate tax
Qatar	None on employment income	Self-employed people with Qatar-source income may be taxed
Saudi Arabia	None on employment income	No individual income tax scheme; other income is taxed at entity level
Bahrain	None	Social insurance contributions still apply to people employed there
Kuwait	None	No personal income tax on individuals
Cayman Islands	None	No income or withholding taxes on individuals; no direct taxes on corporations
Bahamas	None	No personal income tax
Oman	None until 2028	A personal income tax is scheduled for January 1, 2028, with a 5% rate above a threshold of OMR 42,000

Sources: PwC Worldwide Tax Summaries for each jurisdiction, reviewed 2026. The Oman entry is an announced change, not current law in force.

Two points deserve emphasis. First, "no income tax" is not "no tax." Every country in this table raises revenue somewhere else, which the next section covers. Second, the list is shorter than it used to be. Oman's planned tax would be a break with the Gulf pattern, and PwC's summary says the 5% rate applies above the threshold without specifying whether it falls only on the excess. Treat the details as provisional until legislation is applied in practice.

Monaco is often named in conversations about personal taxes too, but its rules differ by nationality and residence status, so check them directly with the principality's authorities before drawing conclusions.

Singapore deserves a mention as the counterexample. It is often grouped with low-tax places, but its resident individual rates run from 0% to 24%, with the top rate applying above S$1 million of taxable income, according to PwC's Singapore summary. Low is not the same as zero.

How the Gulf pays for public services without an income tax

Oil and gas revenue has historically let Gulf governments skip taxing their residents' wages. The state owns the resource, sells it, and spends the proceeds. That arrangement explains why the countries holding the largest sovereign wealth funds include several Gulf states, and why the ranking of countries with the largest oil reserves overlaps with the zero-income-tax list.

The model is changing at the edges. The UAE introduced a federal corporate tax of 9% for financial years beginning on or after June 1, 2023, according to the UAE Ministry of Finance. Large multinationals in the UAE face a 15% top-up from January 1, 2025, per the Tax Foundation's 2025 corporate rate tables. The UAE also charges a 5% VAT, and excise rates of 100% on tobacco and vaping products and 50% on carbonated and sweetened drinks.

Think of it as a household that stopped charging its own members rent because a rich relative pays the mortgage. The arrangement works until the relative's income becomes less certain. That is the logic behind the diversification into VAT and corporate tax: not because Gulf governments are short of money today, but because oil prices move and a tax base that does not depend on them is a kind of insurance.

The other Gulf corporate rates, as of 2025 per the Tax Foundation, are Qatar 10%, Kuwait 15%, Oman 15%, and Saudi Arabia 20%. Bahrain has no general corporate tax, though a targeted tax on oil companies can reach 46%. For the cost side of the bargain, countries with the highest cost of living shows that a zero income tax does not guarantee cheap rent or groceries.

What the millionaire migration numbers do and do not show

The UAE is a favorite in wealth-migration headlines. Henley & Partners and New World Wealth project a net inflow of +9,800 millionaires to the UAE for 2025, the largest of any country, ahead of the United States at +7,500, Italy at +3,600, and Switzerland at +3,000, according to the Henley Private Wealth Migration Report 2025.

Those figures are projections and provisional estimates, and the press release gives no methodology. They are best read as a rough ranking of direction, not an audited headcount. They also say nothing about causation: climate, safety, visa programs, and business networks all move wealthy people, not only tax. For context on where the money starts out, see countries with the most billionaires.

Lowest corporate tax rates, 2025 and 2026

Corporate rates are where governments compete most openly, and also where the numbers move fastest. The table combines the Tax Foundation's 2025 statutory rates with 2026 changes confirmed in PwC's summaries.

Country	2025 statutory rate	2026 position	Pillar Two top-up in place?
Hungary	9%	Unchanged (plus local business tax up to 2%)	Yes, from 2024
Bulgaria	10%	Unchanged	Yes, from 2024
Ireland	12.5% (trading)	Unchanged; 25% on passive income	Yes, from 2024
Cyprus	12.5%	15% from January 1, 2026	Yes, from 2025
Romania	16%	No change noted	No separate top-up listed
Lithuania	16%	Scheduled to rise to 17%	No separate top-up listed
Singapore	17%	Unchanged; partial exemptions on first S$200,000	Top-up from 2025
Czech Republic	21%	No change noted	No separate top-up listed

Sources: Tax Foundation, Corporate Tax Rates by Country 2025; PwC Worldwide Tax Summaries for Hungary, Ireland, Cyprus, and Singapore, reviewed 2026. Global average in 2025: 23.58% across 181 jurisdictions; OECD average: 24.20%.

Several details in the table correct the picture most older rankings paint. Hungary's 9% rate has applied since January 1, 2017, when it was cut from 19%. Cyprus is no longer a 12.5% jurisdiction: PwC states that the standard rate is 15% as of January 1, 2026, up from 12.5% through the end of 2025. Lithuania, sometimes still listed at 15%, was 16% in 2025 and is scheduled for 17% in 2026.

The Tax Foundation counts 15 jurisdictions with no corporate tax at all in 2025. The Cayman Islands is one. Its PwC entry is blunt: corporate income, capital gains, payroll, and other direct taxes are not imposed on corporations there. Bermuda is the interesting recent case. Its 2023 Corporate Income Tax Act applies 15% to Bermuda businesses that belong to multinational groups with annual revenue of €750 million or more, from 2025, while other Bermuda businesses remain outside income tax.

Statutory versus effective: the Singapore arithmetic

Singapore's 17% statutory rate looks middling next to Hungary's 9%. Its effective rate for a small company is much lower, because of a partial exemption. Under the scheme in PwC's summary, 75% of the first S$10,000 of chargeable income and 50% of the next S$190,000 is exempt, which removes S$102,500 from the first S$200,000.

The arithmetic: S$200,000 minus S$102,500 leaves S$97,500 taxable. At 17% that is S$16,575 of tax, or about 8.3% of the S$200,000. That figure is our own calculation from PwC's published exemption schedule and ignores corporate income tax rebates, which vary year by year. It illustrates why statutory-rate rankings can invert once the rules are applied: a small Singapore company can pay a lower rate than a Hungarian one for its first S$200,000, though Hungary's statutory rate is half of Singapore's.

What the OECD 15% minimum tax changes, and what it leaves alone

Pillar Two is the OECD's global minimum tax framework. It sets a floor of 15% on the effective tax rate of multinational groups with consolidated revenue of €750 million or more in at least two of the four preceding years, per PwC's Irish summary of the rules. The effective rate is calculated jurisdiction by jurisdiction. If a group pays less than 15% in a given country, a top-up tax is collected somewhere.

Three mechanisms do the work:

• Income Inclusion Rule (IIR): the parent's home country collects the top-up on low-taxed foreign subsidiaries.
• Undertaxed Profits Rule (UTPR): a backstop that lets other countries collect if the parent's country does not.
• Qualified Domestic Minimum Top-up Tax (QDMTT): the low-tax country itself collects the top-up first, keeping the revenue at home.

The QDMTT is the reason a growing number of low-rate countries adopted it. Hungary, Bulgaria, Ireland, and Cyprus have all done so according to the Tax Foundation, as have Qatar and Bahrain. A low-tax country that does nothing leaves the top-up to the multinational's home government. One that adopts a QDMTT collects the difference itself. In Ireland, the IIR and QDTT took effect January 1, 2024, and the UTPR January 1, 2025. Hungary's package follows the same timetable.

What the floor does not touch is large: it does not apply to groups below €750 million in revenue, it does not apply to individuals, and it does not set a rate on small domestic firms. A Hungarian firm with €50 million in revenue still pays 9% plus local business tax, which municipalities may set up to a 2% cap.

The framework is also still being negotiated. PwC's Irish summary notes that a "Side-by-Side System Package" is expected to be enacted through Ireland's Finance Act 2026, and gives no firm date. Anyone reading rankings built on earlier assumptions should expect further changes.

Ireland: a 12.5% rate and a concentration problem

Ireland keeps a 12.5% rate on trading profits, 25% on passive income such as interest, rents, and royalties, and 33% on capital gains, per PwC. The Tax Foundation notes the main rate has not changed since 2003. The effects on the Irish economy have been large, but the strongest evidence is also the clearest warning.

Irish Revenue's 2025 analysis of corporation tax provides the numbers. In 2024, corporation tax was the largest tax head, contributing €39 billion net, 36% of total tax receipts transferred to the Exchequer. Part of that was a one-off: on September 10, 2024, the Court of Justice of the EU ruled in the Apple State aid case, which produced once-off revenues. Excluding that ruling, net corporation tax was €28.1 billion, an increase of 18%.

The composition of that €28.1 billion is the story:

Payer group (2024, excluding CJEU ruling)	Net corporation tax	Share of total
Foreign-owned multinationals	€24.8 billion	88%
Irish-owned multinationals	€1.2 billion	4%
Domestic non-multinationals	€2.1 billion	8%
Top 10 companies	n/a	57% (up from 52% in 2023)

Source: Revenue, Corporation Tax 2024 Payments and 2023 Returns (published April 30, 2025; revised April 7, 2026).

Foreign-owned multinationals made up only 11% of companies paying corporation tax, while more than 85% of paying companies were non-multinationals contributing 8% of receipts. Over 60% of the foreign-owned multinational receipts came from services firms, and manufacturing receipts rose from €3 billion in 2019 to almost €10 billion in 2024, which Revenue says is largely explained by pharmaceutical companies.

Picture a restaurant where ten regulars account for more than half of the till. Revenue is high, and the owner is very exposed to any one of them deciding to eat elsewhere. A low rate attracted these companies and the 15% floor now partly erodes the rate advantage, but the Irish case shows the real risk of a low-tax strategy is dependence on a handful of mobile taxpayers, not the rate itself.

For individuals, the story is ordinary. Ireland's 2026 personal income tax rates are 20% up to €44,000 for a single person and 40% above that, per PwC, and there are no local income taxes. A low corporate rate does not lower personal tax, a point many online "move to Ireland" guides skip. For a wider comparison of what high-tax systems look like, see countries with the highest income tax rates.

Hungary: 9% corporate, 27% VAT

Hungary shows how a low headline can sit beside a heavy system. The corporate rate is 9%, a flat 9% since January 1, 2017, and personal income tax is 15% on nearly all types of income. But the general VAT rate is 27%, and employers pay a 13% social tax on gross pay. There is also a financial transactions tax, generally 0.45% of the transaction up to a cap of HUF 20,000 per transaction, and insurance premium taxes of 10% to 23% depending on the product, according to PwC.

Hungary's Pillar Two package took effect in 2024 with a QDMTT, so large multinationals investing there pay at least 15%. The 9% rate therefore matters most for smaller firms and for groups below the €750 million threshold, which is a large share of the economy, though not of the headline investment announcements.

The lesson for rankings is that a corporate rate alone says little about how much tax a business really faces. A firm weighing Hungary against Bulgaria, which has a 10% flat corporate rate according to PwC, would compare payroll taxes, VAT cash flow, local levies, and administrative cost, not only the headline rate.

Offshore zero-tax jurisdictions after the transparency push

The Cayman Islands, Bermuda, and the Bahamas are the classic zero-tax names. Cayman levies no direct taxes on corporations or individuals, Bermuda's regime now has a 15% layer for large multinational groups, and the Bahamas has no personal income tax. These jurisdictions have historically served as domiciles for investment funds, insurers, and holding structures: places where a pool of money can be organized without adding a second layer of tax on top of what the investors already pay at home.

What changed over the past decade is information. Automatic exchange of financial account data under the OECD's Common Reporting Standard (CRS) means banks report account details to the account holder's home tax authority. The days of an account in a zero-tax place being invisible are largely over. A zero-tax domicile still has legitimate uses, mainly because investment funds are designed to be tax-neutral, but it no longer provides secrecy.

Bermuda's 15% levy is the clearest sign that even the most tax-free jurisdictions have adjusted to Pillar Two. Where a multinational group would otherwise pay under 15% on Bermuda profits, a top-up would be collected by some other country anyway, so Bermuda chose to collect it first.

Where the money comes from instead

A government that does not tax income still has to pay for roads and hospitals. The main substitutes, in rough order of importance, are resource revenue, consumption taxes, and payroll or social contributions.

• Resource revenue: oil and gas royalties and state-company profits. This is the Gulf model. It explains why the zero-income-tax list in this article overlaps with the oil-exporter list.
• Consumption taxes: VAT and excise. The UAE's general VAT rate is 5%, while Hungary's is 27%, per PwC. Same tool, very different dial settings.
• Payroll and social contributions: Bahrain exempts income from tax but still collects social insurance contributions from people employed there. Hungary's employer social tax is 13% of gross pay.
• Fees and property taxes: import duties, registration charges, and land transfer taxes. Hungary's property transfer duty is 4% of fair market value up to HUF 1 billion, for example.

A low-income-tax country is therefore not a tax-free country. The accurate framing is that the tax is moved from the pay slip to somewhere else. For how debt and revenue interact in the opposite direction, see countries with the highest national debt.

Why moving to a zero-tax country rarely ends a tax bill

Residence rules vary by country, and many countries tax residents on worldwide income. The US goes further and taxes citizens regardless of where they live. The IRS states that US citizens and resident aliens living abroad generally must file income tax returns on the same basis as those living in the United States, based on gross worldwide income relative to a filing threshold.

A relief exists: the Foreign Earned Income Exclusion lets qualifying taxpayers exclude a set amount of foreign earnings. The IRS lists $130,000 for tax year 2025 and $132,900 for tax year 2026. The exclusion covers earned income, not all income, and carries residence or presence tests. An American earning more than the limit in Dubai may still owe US tax on the excess, and the benefit does not extend to passive income.

Other countries run differently. Ireland, for example, taxes residents and domiciled individuals on worldwide income and non-residents generally only on Irish-source income. A person leaving a high-tax country usually has to show that they truly left: a home, family, and economic ties abroad can keep a tax residence alive on paper. Whether any given move works is a question for a licensed adviser in the home country, which is why this article stops at describing the rules.

Does a low tax rate cause growth?

The evidence does not support a simple yes. Ireland's rise from the 1980s coincided with its low corporate rate, but also with English-language education, EU membership, and a workforce that multinational employers wanted. Separating the rate from those other factors is difficult, and economists disagree on how much of Ireland's growth the rate explains.

Two things are better supported. First, tax competition does move activity: Irish manufacturing-sector corporation tax, dominated by pharmaceutical companies, rose from €3 billion in 2019 to almost €10 billion in 2024, as Revenue reports. Second, a low rate is a bet on a narrow base. Where the base is a few multinationals, as in Ireland, or a single commodity, as in the Gulf, the budget inherits that concentration.

High-tax economies can be productive too, so rate alone does not set an economy's fate. A comparison of the largest economies by GDP shows both low-tax and high-tax systems among the leaders, and GDP per capita rankings tell a similar story: the richest list includes tiny low-tax jurisdictions and large high-tax welfare states. Whether tax competition is a race to the bottom or efficient capital allocation depends partly on what taxpayers get back, and on where in the income distribution one sits.

Frequently asked questions

Q: Which country has the lowest taxes in the world? A: It depends on the yardstick. For personal income tax, the UAE, Qatar, Saudi Arabia, Bahrain, Kuwait, the Cayman Islands, and the Bahamas charge none on employment income. For corporate tax, the Cayman Islands charges nothing, and Hungary (9%) and Bulgaria (10%) are the lowest in the EU. No single country is lowest on every measure.

Q: Is it legal to move to a zero-tax country to avoid taxes? A: It can be, but the rules depend on your home country. The US taxes citizens on worldwide income wherever they live, with a Foreign Earned Income Exclusion of $130,000 for 2025 and $132,900 for 2026. Many other countries tax by residence, so a genuine move that ends residence ties may end the liability. Get advice specific to your home country.

Q: Did Cyprus keep its 12.5% corporate rate? A: No. PwC's summary states that the standard corporate rate in Cyprus is 15% as of January 1, 2026, up from 12.5% through December 31, 2025. Older rankings that list Cyprus at 12.5% are out of date.

Q: What is the OECD minimum tax, and who pays it? A: Pillar Two sets a 15% minimum effective tax rate for multinational groups with consolidated revenue of €750 million or more in at least two of the four preceding years. Smaller companies and individuals are outside it. Many low-tax countries, including Ireland, Hungary, Qatar, and Bahrain, now collect the top-up through a domestic minimum tax.

Q: Does a low corporate rate lower my personal taxes in that country? A: No. They are separate taxes. Ireland's 12.5% corporate rate applies to trading profits of companies, while individuals face 20% up to €44,000 for a single person and 40% above that in 2026, per PwC. Hungary's 9% corporate rate sits beside a 15% personal income tax on most income.

Q: If there is no income tax, how do these governments raise money? A: Mostly through resource revenue, consumption taxes, and payroll contributions. The Gulf states rely on oil and gas income, the UAE charges 5% VAT, and Bahrain collects social insurance contributions from employees. Hungary combines a low corporate rate with a 27% VAT.

Q: Are the Cayman Islands and Bermuda still zero-tax? A: The Cayman Islands imposes no direct taxes on corporations or individuals according to PwC. Bermuda applies a 15% corporate income tax from 2025 to businesses in multinational groups with revenue of €750 million or more, and otherwise has no income tax on businesses.

The takeaway

The lowest tax rates in the world belong to places that found a reason not to need much of the tax that other countries rely on: oil in the Gulf, fund-domicile fees in the Caribbean, and a deliberately narrow corporate bargain in Ireland and Hungary. The 15% OECD floor has trimmed the corporate edge for the largest multinationals but left personal taxes, small firms, and the consumption-tax side of the ledger untouched.

The better question than "who is lowest" is "who pays, and how stable is that arrangement." Ireland's top 10 companies paying 57% of net corporation tax is a fragility that no headline rate reveals, and Oman's announced 2028 income tax suggests even oil-funded budgets are looking for a second pillar. Check the date on any ranking, including this one, before relying on a rate.

Sources

• Tax Foundation, Corporate Tax Rates by Country 2025
• UAE Ministry of Finance, Corporate Tax
• PwC Worldwide Tax Summaries: Cyprus, Ireland (corporate), Ireland (individual), Hungary (corporate), Hungary (other taxes), Bulgaria, Singapore (corporate), Bermuda, Cayman Islands, Oman
• PwC: UAE, Qatar, Saudi Arabia, Bahrain, Kuwait, Cayman Islands (individual), Bahamas, Singapore (individual)
• Revenue (Ireland), Corporation Tax 2024 Payments and 2023 Returns
• IRS, Foreign Earned Income Exclusion and IRS filing requirements for US citizens abroad
• Henley & Partners, Private Wealth Migration Report 2025

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