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Flat Tax

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Click on a country for details.

Countries with Flat Tax 2024

Many developed countries use a graduated tax system, meaning that people who have lower incomes pay a smaller percentage of their income in taxes. People who have higher incomes pay a higher rate. The reasoning is generally that those who have low incomes need most to all of their income to provide for their most basic needs – particularly food and housing – while those who have a higher income can live off of a smaller portion of their income.

A flat tax is a tax system in which everybody, no matter what his or her income may be, pays the same percentage in taxes. For example, if the flat fee is set at 15%, someone who earned a billion dollars would pay 15% in taxes - $150 million – while someone who earned $10,000 would pay 15%, equal to $1500. Critics of the flat tax argue that it places an unsustainable burden on the poor, and they also look at countries that have flat charges and are unable to provide social services for the poor.

Greenland, for example, has a flat tax, and at 45%, it is one of the world’s highest taxes. Nevertheless, Greenland has few of the social services that many developed countries have. Similarly, Mongolia and Kazakhstan have flat taxes of 10%, and Bolivia and Russia have flat taxes of 13%, yet these countries do not have well-developed social sectors. Hungary and Romania have flat taxes of 16%, and Lithuania and Georgia have flat charges of 20%. Many of the countries with flat fees have lower standards of living than the nations that surround them.

However, there are arguments in favor of a flat tax, one being that not taxing the rich at high rates incentivizes them to remain in the country and spend their money there. Imposing high taxes on the rich can cause them to set up offshore accounts in tax havens, as happened with The Beetles when the UK government taxed them at 95% of their income.

Many in the United States favor imposing a flat tax, at least in part, to encourage the rich to spend their money domestically rather than to keep it in tax havens. Others believe that not taxing the rich at rates higher than the poor will leave critical social institutions, such as schools and roads, underfunded.

  • Personal Income Tax (PIT), also known as individual income tax, is a tax on employee earnings that is paid by the earner/employee.

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Country
Flat Tax
Additional Details
Greenland
Individuals working in Greenland in relation to oil, gas, and mineral activities or construction act...
Belize
Georgia
Mongolia
Armenia
Estonia
Jersey
Guernsey
Ukraine
Hungary
Serbia
Albania
Lithuania
Russia
Bolivia
Belarus
Moldova
Kazakhstan
Romania
Kyrgyzstan
Bulgaria
Turkmenistan
Bosnia and Herzegovina
North Macedonia
Timor Leste
Wages paid to employees who are non-residents of Timor-Leste are taxed at a flat rate of 10 (i.e. wi...
showing: 25 rows

Which countries have a flat tax?

Bolivia, Georgia, Greenland, Hungary, Kazakhstan, Lithuania, Mongolia, Romania, and Russia are all countries that have a flat tax rate.

Frequently Asked Questions

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