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Oct 1992

Europe's taxation of individuals from Austria to Yugoslavia. (includes listing of tax rates for individuals in Europe)

by Fay, Jack R.

    Abstract- The individual tax systems of countries in Europe are covered in Jack R. Fay's research study of over 100 countries that includes three other geographic areas, that of the Americas, Asia and the Pacific Basin, and the area covering Africa, and the Middle and Near East. Focus is given to tax information on Europe, as provided in data concerning the tax rates and allowable non-business deductions for 28 countries in the region. A commentary is also made of the distinct features of each country's taxing system. Individual tax r ates in Europe show variations from a minimum zero percent in Switzerland and Norway, to a maximum of 68% in Denmark.

Governments throughout the world have learned their lessons well in creating and modifying tax systems to raise the funds needed to operate. These systems are in a constant state of change as demands for more funds are made to tackle problems and provide additional services. Governments face the dilemma for more taxes as to whether to increase tax rates, decrease deductions, introduce a surtax on the wealthy, or introduce other new taxes.

Jack R. Fay conducted a research study of the individual tax systems of over 100 countries throughout the world, from Antigua to Zimbabwe, and prepared a summary by country showing the tax rates and the non-business deductions allowed, with a commentary on the unique features of each taxing system. Fay's study establishes and confirms the ingenuity of taxing officials or legislatures to tax individuals.

Fay's complete study presents the information under four geographic sections: Americas; Asia/Pacific Basin; Europe; and Africa/Middle and Near East. Space limitations do not permit the presentation of Fay's full study. With all eyes presently focused on Europe 1992, The CPA Journal has chosen to present the tax information for Europe. The complete study results are available at a cost of $5.00 for shipping and handling by writing Jack Fay, Campus Box 8398, Stetson University, Deland Florida 32720-3774.


In the Americas, the individual income tax rates vary from no tax (Bahamas, Bermuda, Cayman Islands, Grenada, and Turks and Caicos Islands) to the highest maximum regular tax of 55% (Antigua and St. Vincent and the Gren-adines), 56% Panama, and 58% (Netherlands Antilles).

In the Asia/Pacific Basin, the individual income tax rates vary from 1% minimum in the Philippines (maximum of 35%), Macau (10- 15%), and Hong Kong (2-25%) to a maximum regular tax rate of 50% (Bangladesh, India, Japan, Korea, Turkey, and Western Samoa) and 55% (Thailand).

In Europe, the income tax rates for individuals range from 0 to 13% (Switzerland) and 0 to 17% (Norway) to the highest maximum regular tax of 60% (Cyprus and Netherlands) and 68% (Denmark). Liechtenstein has a regular income tax of only 1.2%, but it has a surcharge tax on income and wealth of 5-395%.

Finally, in Africa/Middle and Near East, taxes extend from no tax (Brunei Darussalam, Oman, and United Arab Emirates) to a maximum regular tax of 65% (Egypt and Liberia), 75% (Iran and Zambia), and 90% (Libya).

Because of its summary nature and since tax rates and tax laws change frequently, the information in the accompanying table should not be relied upon, nor used in any way, for estimating or computing taxes that might actually be payable by an individual in the country indicated.

Jack R. Fay, PhD, CPA, is a Professor of Accounting at Stetson University. He is a past member of the AICPA International & Practices Committee and the AICPA International Education Task Force. He presently is a member of the Internationl Committee for the Tax Division of the American Accounting Association. He is a member of the AICPA and the Florida Institute of CPAs. Professor Fay expresses his thanks to the national offices of DeLoitte & Touche, Price Waterhouse, and Coopers & Lybrand for providing information for the study.

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