Moderate tax countries
These work best for people with moderate income, high tax burden, and high CoL. The tax rates below are average at best, especially if you're in the 20-25% bracket already. Still, most of these countries are part of the EU, have many DTTs and a relatively affordable CoL. Bonus if you speak their language or have ethnic roots.
Table of contents
- Sole Proprietor in Slovenia 🇸🇮
- Self-employed in Czechia 🇨🇿
- Sole Proprietor in Poland 🇵🇱
- Simplified regime in Portugal 🇵🇹
- Foreign professional in Greece 🇬🇷
- Small company in Lithuania 🇱🇹
- Corporation in Hungary 🇭🇺
- Corporation in Malaysia 🇲🇾
Sole Proprietor in Slovenia 🇸🇮
- "full" SP (samostojni podjetnik) under "normiranec" status
- must be an EU citizen or have lived in SI for at least 1 year
- turnover must not exceed EUR 100k
- flat 20% tax after normalized expenses/costs
- 80% deduction on first EUR 0-50k for a 4% effective tax
- 40% deduction on next EUR 50k-100k for a 12% effective tax
- also: socials (see Individual - Other taxes)
- self-employed: 38.20% (employee: 22.10% + employer: 16.10%)
- capped around EUR 28k based on avg salary in SI
- 25% flat tax on cap gains, divs, and rental income
- CGT can be reduced depending on the holding period
Resources
- Determining the tax base using standardized expenses (SL)
- Comparison between ordinary and standardized SP (SL)
- SP and DOO with standardized costs (SL)
- Sole proprietor in Slovenia – benefits of normalized expenses
Self-employed in Czechia 🇨🇿
- self-empoyed = Osoba samostatně výdělečně činná (OSVČ)
- deducting fixed expenses (paušální výdaje)
- 80% in agriculture, forestry, crafts up to CZK 1.6M
- 60% in trade business up to CZK 1.2M
- 40% in IP, copyright up to CZK 800k
- 30% on rent up to CZK 600k
- PIT of 15% up to CZK 1.8M, 23% on excess + socials
- however, if income < CZK 2M, opt for a lump-sum tax (paušální daň)
Resources
- Income Tax Act, Sect. 7, Para. 7 (CS)
- Expenses as a percentage of income (CS)
- Flax-rate regime (CS)
- Self-employed tax calculator (CS)
Sole Proprietor in Poland 🇵🇱
- sole proprietorship = Jednoosobowa działalność gospodarcza (JDG)
- lump-sum tax on revenue (ryczałt od przychodów ewidencjonowanych)
- from 2% to 17% depending on the type of activity
- cannot write off expenses (works best with high margins)
- with low margins, opt for the flat-rate tax at 19%
- also: health insurance and social security (ZUS), tiered
Resources
- Flat-rate Income Tax Act (PL)
- Lump-sum tax on registered income (PL), also on taxes.gov.pl
- The amount of contributions for people running a business (PL)
- Tax calculator for B2B contractors in Poland and Calculator B2B (PL)
Simplified regime in Portugal 🇵🇹
- tax deduction between 5% to 90% of gross income up to EUR 200k
- assumed as expenses and based on the category of income
- ex: 65% deduction if the activity is classified as "Other income from services"
- ex: 25% for software devs under "Liberal Profession"
- further 50% discount in 1st tax year, 25% discount in 2nd year
- progressive PIT 14.5-48% + socials 21.4% (self-employed)
- optimal for high-margin/low-expense self-employed persons
Resources
- Simplified regime of Category B
- Category B - Business and Professional Income (PT)
- You can translate the PDF using a website like onlinedoctranslator.com
- Best Way to Save on Taxes for Digital Nomads in Portugal
Foreign professional in Greece 🇬🇷
- alternative tax regime for foreigners (Jan 2021)
- transfer your tax residence to GR from EU/EEA or a country with DTT
- have not been a GR tax resident in 5 out of 6 years
- stay in GR for 2 or more years
- 50% of income is exempt from income tax and solidarity contrib
- applies to employment and business income earned in GR
- PIT 9-44%, solidarity contrib 0-10% (some income), socials
- status granted for 7 years
Resources
- Greece - Other tax credits and incentives
- Greece – Recently-Introduced Measures Aim to Attract New Tax Residents
- Special solidarity contribution abolished for certain income for FY 2020 and 2021
Small company in Lithuania 🇱🇹
- < 10 employees, < EUR 300k/year in revenue
- CIT 0% in first year, 5% in following years
- divs 15%, PIT 20% up to EUR 81,162 (32% on surplus) + socials
Resources
Corporation in Hungary 🇭🇺
- CIT 9%, divs 15%, PIT 15% + socials
Resources
Corporation in Malaysia 🇲🇾
- CIT 3% for trading activities in Labuan
- CIT 17% on MYR 600k (USD 145k), 24% on excess if gross income less than MYR 50M (SME)
- also, various incentives/tax holidays based on sector (esp. for large corps)
- div 0%, PIT 0-30% (avg 24%) + socials, CGT 0% (except real estate)
Resources
- Malaysia - Taxes on corporate income
- Malaysia - Social security contributions
- Highlights of Budget 2021 (tax relief and incentives)
- Incentives for new investments (i.e. corporations)