10 Low-Tax Countries in Asia, From Personal Income to Corporate Tax

TEMPO.CO, Jakarta - The Indonesian government has set an increase in the value-added tax (VAT) rate to 12 percent, which will take effect on January 1, 2025 at the latest. This policy could potentially impact people's purchasing power, as Tempo reported on March 15, 2024.

The majority of Indonesians are likely to be affected by the VAT increase. However, it is important to note that taxes, in essence, are a source of government revenue, which is subsequently utilized to improve public services and facilitate government operations.

Nevertheless, there are countries that have implemented minimal to no taxation. What factors contribute to this? In this article, we will take a closer look at low-tax countries in Asia.

List of Low-Tax Countries in Asia

According to Immigrant Invest, some countries impose a low rate to no taxation simply because they have adequate revenue from other sources. For example, countries, like the Bahamas, earn money from their tourism sector.

Now, let's find out some low-tax countries in the Asian region according to Investopedia, Immigrant Invest, CEO Magazine, and other sources.

1. United Arab Emirates (UAE)

The United Arab Emirates is one of the most prominent countries with no income tax. A large portion of its revenue comes from the non-oil sector, which accounts for the country's stable and thriving economy. Furthermore, the UAE only charges a 5% VAT and a 9% corporate income tax.

2. Bahrain

Second on this list is Bahrain, another country with no income tax. Nevertheless, according to Investopedia, the government requires the citizens’ contribution to Social Insurance and unemployment programs. While there is no income tax, Bahrain imposes a 46% corporate income tax only for oil companies.

3. Oman

Just like typical Middle Eastern countries, Oman, too, depends on the oil and gas sector. When it comes to tax policies, Oman levies a 5% VAT on certain products, whereas the corporate income tax is 15%.

4. Kuwait

Similar to its Gulf counterparts, relying on the energy sector, Kuwait doesn't have any income tax on individuals. However, businesses are subject to a flat 15% corporate tax rate.

5. Qatar

Qatar is another Gulf state that offers a tax haven for individuals. Thanks to its reserves of oil and petroleum, Qatar can forego income taxes. Regardless, businesses still face a 10% corporate tax.

6. Brunei Darussalam

Brunei Darussalam is another country with a low tax rate in Asia. Mostly depending on oil and natural gas fields, the Southeast Asian (SEA) country imposes no VAT, but companies are the subject of a 18.5% corporate tax.

7. Saudi Arabia

Saudi Arabia offers a relatively low tax environment with a 15% VAT rate. On the other hand, the standard corporate tax is 20% of net profits. However, according to Immigrant Invest, income deriving from oil and hydrocarbon fields will be levied at 50% to 85%.

8. Macau

Macau is among Asian countries with a low tax. Expats are favored with low personal income tax rates, specifically at 12%. The corporate tax is also charged at 12%.

9. Tajikistan

Tajikistan has a relatively low personal income tax, with rates levied up to 12%. Moreover, the corporate tax rate stands at 18%, making Tajikistan a competitive option among countries with low tax rates.

10. China (Hong Kong)

While Hong Kong is technically not a country, the territory is worth including to this list as one of tax havens. Hong Kong is able to impose low tax rates since its law limiting taxation on wealthy foreign residents and corporations, Investopedia explained.

Individuals within the region face a personal income tax rate ranging from 2% to 17%, depending on salary. On the other hand, corporate tax is levied between 8.25% and 16.5%, depending on earnings.

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