Income Tax

Which are countries with no income tax?

A life without payroll tax: In some states, this finacial benefit comes true. In these seven countries, no income tax is due.

Income tax is one of the financial pillars of the German state. In the financial year 2017, it took in around 239 billion euros with this type of tax. This represented more than a third of the total tax revenues of the federal, state and local governments. Other states, on the other hand, forego this source of money – because wealth is gushing elsewhere or because the population is so small that the government prefers relying on tax evaders to fill the coffers.

Seven countries with no income tax:

Cayman Islands

The Cayman Islands are among the best-known tax havens in the world. Tax evaders and hedge funds love the Caribbean archipelago, part of the British Overseas Territory of the United Kingdom. The land is financed exclusively by administrative fees and customs duties. This also means: the citizens do not pay payroll taxes.


Bahrain wants to prepare for the time after dry up the oil wells. That’s another reason why the Kingdom of Bahrain has positioned itself on the Persian Gulf as an international tax haven. Private individuals and companies outside the oil industry currently pay neither income tax nor value added tax. The latter will probably be introduced soon.

United Arab Emirates

Next in the tax reform are the United Arab Emirates. There, on 1 January 2018, a moderate VAT of five percent was introduced. The UAE wants to become more independent from oil and gas resources in this way. However, residents still remain exempt from income tax.


In continental Europe, Monaco holds up the banner of tax havens. The tiny principality, the smallest state in the world after the Vatican, offers shelter mainly to private individuals. You pay no income or inheritance tax. Companies, on the other hand, are liable to pay.


With the discovery of oil in 1940, the wealth came to the Emirate of Qatar. Per capita income is among the highest in the world. The absolute monarchy of the Persian Gulf is not only a sacrifice to income tax. It also offers its citizens free health care and education.

Saudi Arabia

Qatar’s neighbor, Saudi Arabia, also waives income tax. However, the sinking oil price is upsetting the kingdom. A response to the budget crisis: VAT was introduced in early 2018. Above all the gasoline prices increased drastically.


The Bahamas, like the Cayman Islands, landed on the blacklist of tax havens submitted by the European Commission in early 2016. The banking and finance sector is after tourism the main economic activity of the former Crown Colony, which lies north of Cuba. In addition to income tax, the Bahamas also waive corporation tax and capital gains tax.