Ranked: The Best and Worst Countries for Taxes

Ranked: The Best and Worst Countries for Taxes

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When global companies decide where to invest, the quality of a country’s tax code can be as important as market size or labor costs.

A simpler, more neutral code helps investors forecast returns and reduces compliance headaches.

The data for this visualization comes from the Tax Foundation’s 2024 International Tax Competitiveness Index.

It benchmarks Organisation for Economic Co-operation and Development (OECD) members on how efficiently they raise revenue through individual, corporate, property, and consumption taxes, plus their rules on cross-border profits.

Estonia: Best Tax Code in the World?

Estonia tops the index for the 11th straight year, scoring a perfect 100.

Rank	Country	Score	Individual Taxes Rank	Corporate Tax Rank
1	Estonia	100.0	2	2
2	Latvia	92.2	3	1
3	New Zealand	84.2	6	30
4	Switzerland	83.6	8	10
5	Lithuania	79.5	10	3
6	Luxembourg	78.8	23	22
7	Hungary	77.5	5	4
8	Czech Republic	77.3	4	8
9	Slovak Republic	76.5	1	15
10	Israel	76.4	29	11
11	Turkey	74.8	7	21
12	Sweden	73.2	18	6
13	Australia	72.5	15	32
14	Netherlands	68.3	30	23
15	Austria	67.9	25	19
16	Germany	66.8	35	31
17	Canada	66.7	31	26
18	U.S.	66.5	17	20
19	Norway	66.2	28	13
21	Costa Rica	65.2	32	35
20	Finland	65.2	27	7
23	Mexico	64.9	19	27
22	Slovenia	64.9	12	9
24	Korea	63.0	38	25
25	Japan	61.1	34	34
26	Belgium	61.0	13	18
27	Greece	60.9	9	17
28	Denmark	60.2	36	14
29	Chile	58.4	24	36
30	UK	58.1	21	28
31	Poland	57.5	11	12
32	Ireland	57.4	37	5
33	Spain	56.3	22	29
34	Iceland	55.9	20	16
35	Portugal	53.7	26	37
36	France	50.2	33	33
37	Italy	47.2	16	24
38	Colombia	45.7	14	38

Its 20% flat tax on both personal and corporate income is only due when profits are distributed, rewarding reinvestment and limiting double taxation.

The country also avoids wealth or inheritance taxes and keeps real-property levies local, reducing distortions.

Combined, these features create an easy-to-administer system that fuels the Baltic state’s startup scene and steady foreign investment.

The Baltic Cluster Outperforms Larger Peers

Latvia (2nd) and Lithuania (5th) join Estonia in the top five, underscoring a regional push for flat-rate, low-complexity regimes.

All three Baltic nations tax corporate profits only once and apply modest payroll charges, making cross-border hiring simpler.

Their high rankings contrast with many bigger EU economies—Germany (16th) and France (36th)—that rely on layered surcharges and targeted deductions, increasing compliance costs even as statutory rates fall.

Why Major Economies Lag Behind in the Tax Index

Size alone doesn’t guarantee a competitive tax code.

The U.S. ranks solidly middle-of-the-pack, weighed down by its citizenship tax system that can tax on overseas income and profits.

Meanwhile, France and Italy sit at the bottom of the table, burdened by high payroll taxes and narrow consumption-tax bases.

Country	Property Taxes Rank	Consumption Taxes Rank	Cross-Border Tax Rules Rank
Estonia	1	18	9
Latvia	5	21	7
New Zealand	8	2	17
Switzerland	36	3	1
Lithuania	7	27	16
Luxembourg	14	6	5
Hungary	23	36	3
Czech Republic	6	32	11
Slovak Republic	2	28	26
Israel	10	10	10
Turkey	22	16	6
Sweden	9	23	12
Australia	4	9	33
Netherlands	21	17	4
Austria	16	14	15
Germany	12	13	8
Canada	25	8	19
U.S.	28	4	35
Norway	15	25	14
Costa Rica	11	7	28
Finland	19	24	22
Mexico	3	12	36
Slovenia	24	30	20
Korea	32	1	30
Japan	26	5	29
Belgium	29	26	24
Greece	27	34	21
Denmark	17	20	32
Chile	13	11	38
UK	34	33	2
Poland	30	37	23
Ireland	18	35	34
Spain	37	19	18
Iceland	33	29	27
Portugal	20	22	31
France	31	31	13
Italy	38	38	25
Colombia	35	15	37

These choices are by design, in pursuit of broadening the social security net, but they also increase distortions and freeze cross-border capital flows.

The Other Side of “Tax Competitiveness”

Tax Competitiveness as measured by the Tax Foundation prioritizes business mobility and investment flows over other policy goals like:

• Reducing inequality
• Funding robust public services
• Long-term fiscal sustainability
• Democratic choice about the size of government

Estonia’s system works well for attracting capital and businesses, but may be sub-optimal for building a comprehensive welfare state or addressing inequality. And many would argue those are equally important measures of a good tax system.

Learn More on the Voronoi App

If you enjoyed today’s post, check out Taxes Collected Relative to GDP Size in Every Major Economy on Voronoi, the new app from Visual Capitalist.

• Source: https://www.visualcapitalist.com/ranked-the-best-and-worst-countries-for-taxes/