The study was prepared by the Global Intelligence Unit, the research arm of Global Citizen Solutions, for its Tax Optimization for Global Citizens briefing. It assesses 11 indicators across three areas: Tax Burden, Tax Structure and Investment Migration. Tax Burden and Tax Structure each account for 42.5% of the overall score, while Investment Migration accounts for 15%.
The UAE took first place with a 0% personal income tax rate, 5% VAT and no departure tax for residents leaving the country. Following in the top five were Antigua and Barbuda, Paraguay, Hong Kong and the Bahamas.
How tax structure affects the ranking
The report shows that a low personal income tax rate does not necessarily mean a country has a favourable tax structure. A significant effect on a country's overall position is how it treats foreign income, worldwide income and special tax regimes.
As an example, Uruguay's personal income tax rate reaches 36%, yet it received the highest Tax Structure score in the study and ranked 12th overall. On the other hand, Hungary has a 15% income tax rate but ranked 31st due to taxation of worldwide income and limited tax relief for newcomers.
The strongest Tax Structure scores generally came from two types of systems: one that excludes foreign income entirely, as in Hong Kong and Panama, or one that taxes worldwide income but provides preferential regimes for certain taxpayers, as in Cyprus and Portugal.
No departure tax in the UAE
The UAE also has no departure tax, which can apply when residents leave certain jurisdictions. Thirty-one of the 48 jurisdictions in the study have no such tax, including the UAE.
The United States has the highest tax burden in the index and also has the most demanding exit terms. Inheritance tax shows another significant difference between jurisdictions. None of the 13 highest-ranked jurisdictions, including the UAE, charges inheritance tax, while rates can reach 60% in France, 55% in Japan and 50% in Germany.
Wealth tax remains uncommon
Only eight of the 48 jurisdictions assessed in the study impose a wealth tax. Rates range from 0.1% in Uruguay to 3.5% in Spain.
None of the jurisdictions with a 0% personal income tax rate also charges wealth tax. The UAE therefore belongs to a small group with neither personal income tax nor wealth tax.
Different tax priorities
The briefing also considers how people with different reasons for relocating are affected by tax rules.
Entrepreneurs preparing for a liquidity event may focus on capital gains tax and the cost of leaving a jurisdiction. Retirees may pay more attention to inheritance rules, healthcare access and consumption tax, while remote professionals may focus on how their country of residence treats income earned abroad.
The UAE has no personal income tax, capital gains tax or departure tax, covering several of the key tax considerations examined in the study.
