Top 10 Countries with the Highest Average Income Tax Rates

As we know from Benjamin Franklin (even though he did not originally come up with the saying), nothing in the world is certain except for death and taxes. Aside from a very few exceptions, governments all around the planet impose a variety of taxes on their citizens in order to finance a variety of services and institutions.

The most important and most common form of tax is the income tax. People are required to give away a certain percentage of their yearly income to the government. That percentage, or tax rate, varies greatly between countries and sometimes even regions within a country. Most countries also have a progressive tax rate in place. Such rate increases with the income level of the respective taxpayer. Tax rates may also vary based on the marital status and on whether an individual has children or not.

The following ranking lists the 10 countries with the highest income tax rates on average. The ranking is therefore based on the most up-to-date tax rate estimate (including deductions) that an average citizen has to pay in his/her respective country

The 10 Countries with the Highest Income Tax Rates

1. Belgium

Income taxation type: Progressive
Highest marginal income tax rate: 50%
Lowest marginal income tax rate: 25%

Belgium has the highest all-in average personal income tax rate in the world. The average Belgian has to give away 33.8%, or 1/3, of his/her annual income to the government. People in Belgium pay a progressive income tax from 25% to 50%. For married couples the average rate is at roughly 30%, while people with tow or more minor children even pay slightly less than 30% on average.

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2. Denmark

Income taxation type: Progressive (first ~ $7,200 per year deductible)
Highest marginal income tax rate: 55.9%
Lowest marginal income tax rate: 31.8%

Pretty much at the same level as people in Belgium, people in Denmark also have to give away roughly 1/3 of their annual income to the Danish government. The average personal income tax is at around 33.5%. The Danish progressive tax system has the world’s highest marginal tax rate range. The highest rate being at 55.9% and the lowest one at 31.8%. But the Danish don’t seem to mind, considering they’re consistently being reported as among the happiest nations in the world. The first 46,000 DKK (Danish krones) of one’s annual income, which is roughly 6,100€ or $7,200, are also deductible which does lower the Danish net tax rate a bit.

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3. Austria

Income taxation type: Progressive
Highest marginal income tax rate: 55%
Lowest marginal income tax rate: 0%

Austria has the third highest average income tax rate in the world. It is at around 31.7%. The Austrian tax system has eight marginal income tax brackets. The lowest one, for people with an annual income of under 11,000€ (~$12,000). it is at zero. This means the poorest people in Austria do not have to pay any taxes at all. The highest marginal income tax rate is at 55% which applies to millionaires and billionaires.

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4. Germany

Income taxation type: Progressive (+ solidarity surcharge; first ~ $10,000 per year deductible)
Highest marginal income tax rate: 47.5%
Lowest marginal income tax rate: 14%

Germany has the fourth highest average personal income tax rate in place. The progressive tax system in Germany sees taxpayers pay between 14% and 47.5%. They are also required to pay 5.5% on their tax bill as part of the solidarity surcharge introduced after the reunification of Germany in 1990. The first 9,100€ (~ $10,000) are tax-free however, which brings the average income tax down quite a bit. The German tax system also offers plenty of special deductions to married couples and especially to people with children which brings the average income tax rate in Germany down to 30.3% . This is still among the highest income tax rates in the world of course.

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5. Finland

Income taxation type: Progressive (+ social contribution tax)
Highest marginal income tax rate: 31.3%
Lowest marginal income tax rate: 6%

The average personal income tax rate in Finland is at roughly 30%. The Finnish tax system is progressive in nature with four brackets ranging from 6% to 31.3%. Finns are also required to pay indirect income taxes, most important a social contribution tax. The tax system in Finland does not take into account the marital status of the taxpayer.

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6. Slovenia

Income taxation type: Progressive
Highest marginal income tax rate: 50%
Lowest marginal income tax rate: 16%

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7. Hungary

Income taxation type: Flat (15% + social contribution tax)

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8. Netherlands

Income taxation type: Progressive (first ~ $23,000 per year deductible)
Highest marginal income tax rate: 51.8%
Lowest marginal income tax rate: 36.7%

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9. Italy

Income taxation type: Progressive (first ~ $9,400 per year deductible)
Highest marginal income tax rate: 47%
Lowest marginal income tax rate: 23%

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10. Turkey

Income taxation type: Progressive
Highest marginal income tax rate: 35%
Lowest marginal income tax rate: 15%

The 10 Countries with the Highest Income Tax Rates
(at a glance)

(as of November 2019)

1. BELGIUM Average income tax rate: 33.8%

2. DENMARK Average income tax rate: 33.5%

3. AUSTRIA Average income tax rate: 31.7%

4. GERMANY Average income tax rate: 30.3%

5. FINLAND Average income tax rate: 30.0%

6. SLOVENIA Average income tax rate: 29.6%

7. HUNGARY Average income tax rate: 28.5%

8. NETHERLANDS Average income tax rate: 28.4%

9. ITALY Average income tax rate: 28.1%

10. TURKEY Average income tax rate: 27.2%

The 10 countries with the highest average income tax rates, based on what income tax rate the average citizen has to pay.