TOP 5 COUNTRIES WITH HIGHEST INCOME TAX RATES

This article focuses on the taxes you could expect, depending on whether you are single or married. This data (the most recent available from 2019) comes from the Organisation for Economic Co-operation and Development (OECD), a forum that allows governments from 37 advanced and developing countries worldwide —25 of which are in Europe—to work together toward people’s economic and social well-being.3

Countries With the Highest Income Tax for Single People

Let’s look at the countries with the highest all-in-average personal income tax rates at the average wage for a single person with no children. 

1. Germany

Germany has a progressive tax, which means that higher-income individuals pay more taxes than lower-income individuals. The country levies a progressive income and capital tax that caps out at 45%.4 Sources of taxable income include agriculture, forestry, business ownership, self-employment, employment, savings and investments, rental property, capital gains, and other income. Thanks to the savings allowance, the first €801 in savings and investment income are not taxed. There is a 25% withholding tax on interest and dividends and a 15% withholding tax on royalties.

Members of certain churches pay an 8% or 9% church tax, which is tax-deductible. Church taxes are levied in many European countries. In some cases, only church members are required to pay a percentage of income to the church to which they belong; in others, all taxpayers pay a church tax but have the option of paying it to the state instead of to a religious organization.

Income of up to €9,408 is considered a personal allowance and is not taxed.

2. Belgium

Capital gains tax rates depend on the type of capital. Belgium's top progressive tax rate is 50%. Income from property, work, investments, and miscellaneous sources is all taxable. Employees pay a social security tax of 13.07% of their income. The government allows deductions for business expenses, social contributions, and 80% of alimony payments, and there is a personal allowance based on filing status.

3. Lithuania

Lithuania taxes its income earners at rates that top out at 32%. Taxable income includes employment, commercial activities, royalties, leasing assets, and "other." Income unrelated to employment—including royalties, interest, and gains from property sale—is taxed at a rate of 15% or 20%, as are capital gains. Dividends are subject to a tax rate of 15%. There is no withholding tax charged on interest unless the individual in question isn't a citizen of Lithuania, in which case the rate is 15%.

Denmark’s progressive income tax tops out at 55.9%.11 The Danes pay an 8% Danish labor market contribution tax, an 8% healthcare tax, 22.8% to 27.8% in municipal taxes, social security taxes of 1,135.8 kr. ($167.06) per year, and capital gains taxes of 27% or 42%.12 There is a withholding tax of 27% on dividends and 22% on royalties.

Income, bonuses, fringe benefits, business income, fees, pensions, annuities, social security benefits, dividends, interest, capital gains, and real estate rental income are taxable. There is also a voluntary church tax of 0.39% to 1.3%.

Tax deductions are available for limited contributions to approved Danish pensions, unemployment insurance, interest on the debt, charitable contributions, unreimbursed work travel, and double households.

5. Slovenia

Slovenia levies an individual income tax that ranges from 16% to 50%. Residents are taxed on their worldwide income, while non-residents will only have their Slovenia-sourced income taxed. Six types of income are subject to taxation: employment; business; agriculture and forestry; rent and royalties; dividends, interest, and capital gains; and "other." Certain business activities are only taxed at a rate of 20%. A withholding tax of 27.5% is levied against dividends, interest, and rental income.