TEMPO.CO, Jakarta - Personal income tax (PPh) is a source of state revenue. Funding from income tax is used to carry out infrastructure development, provide public facilities, and finance other services that are useful for improving people's welfare. Several countries charge very high personal income tax rates to their citizens. PricewaterhouseCoopers (PwC) reports that several countries levy personal income tax of more than 40 percent.

PwC analyzed the main PPh rates which are the highest PPh in 150 countries, including additional taxes, but excluding local taxes from May 2023 to May 2024. The top 10 countries with the highest personal PPh are as follows.

List of Countries with the Highest Personal Income Tax

1. Austria

All individuals living in Austria are subject to income tax on their worldwide income, including income from trade or business, profession, employment, investments,, and property. However, workers who earn less than 12,465 euros are not subject to income tax. Those having income above 1,000,000 euros are subject to income tax of up to 55 percent.

2. Denmark

A person domiciled in Denmark will be subject to full tax obligations, namely tax on their worldwide income unless the person concerned is considered a tax resident in another country based on a double taxation treaty (DTT). A fully taxed resident in Denmark can be charged up to 52.7 percent of income tax.

3. Belgium

Belgium taxes its residents regardless of nationality. Belgian residents must pay tax on their worldwide income, while non-residents only pay income tax from domestic sources. For the 2024 income year, the tax rate ranges from 25 to 50 percent.

4. Slovenia

Income tax rates in Slovenia are calculated taking into account five tax brackets, which are determined a year in advance. Tax brackets are determined one year in advance. In 2023, tax brackets and tax rates apply following the latest amendments to the Slovenian Income Tax Law, namely around 16 to 50 percent.

5. Netherlands

As one of the countries with the highest personal income tax, the Dutch government determines that worldwide income is divided into three different types of taxable income, and each income type is taxed separately under its own schedule, referred to as a 'box'. Box 1 includes income from work which can be taxed at up to 49.5 percent.

6. Portugal

Residents of Portugal are taxed on income at varying progressive rates, ranging from 13.25 to 48 percent in 2024. Meanwhile, non-residents are subject to income tax at a flat rate of 25 percent on taxable remuneration, for example, employment, self-employment, and pension income.

7. Spain

The system of direct individual taxation in Spain is divided into two. First, personal income tax is aimed at someone residing in Spain, and non-resident income tax targets domestic workers but not citizens. The income tax scale that was applied in 2023 ranges from 19 to 47 percent.

8. Australia

A person who is domiciled in Australia will be subject to income tax originating from within and outside the country. From the 1st of July 2024, a top marginal tax rate of 45 percent will apply to income over AU$190,000. In addition, Australians also have to pay a 2 percent Medicare levy for most residents.

9. Germany

Taxable income in Germany includes agriculture and forestry, trade or business, independent professions, employment, capital investments, rent, and royalties, as well as other income as determined by tax law. Progressive tax rates in Germany range from zero to 45 percent in 2024.

10. France

France is one of the countries with the highest personal income tax, which ranges from zero to 45 percent. The progressive rate does not include an additional tax of 3 percent for individuals with income over 250,000 euros and 4 percent for income over 500,000 euros.

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