Countries with no income tax 2026: current list and tax residency
Ten countries that do not apply personal income tax, set out with their corporate tax rates. For those who are tax resident elsewhere, the decisive factor is tax residency.
When researching countries with no income tax, two separate taxes are frequently confused: personal income tax charged on a person's salary and dividends, and corporate tax charged on a company's profit. This article lists the countries that do not apply personal income tax as of 9 October 2026, together with their corporate tax rates, and then explains what this list means for people who are tax resident elsewhere.
What is the difference between income tax and corporate tax?
Income tax is charged on the earnings of an individual: salary, self-employment income, rent and dividends. Corporate tax is charged on the annual profit of a company. In most of the countries referred to as "tax-free", only the first is zero. A person who forms a company meets both taxes: first the company's profit is taxed, and then the share of profit distributed to the person is subject to the rules of the country in which the person is tax resident. The two columns in the list below therefore need to be assessed separately.
Which countries have no income tax?
In 2026, the best-known countries that do not apply personal income tax are in the Gulf: the United Arab Emirates (UAE), Bahrain, Qatar, Kuwait and Saudi Arabia. Monaco in Europe, and the Bahamas, Bermuda and the Cayman Islands in the Caribbean and Atlantic, also charge no income tax. Each row of the table below has been checked against the country page in PwC's Worldwide Tax Summaries.
| Country | Personal income tax | Corporate tax | Point to note |
|---|---|---|---|
| UAE (Dubai, Abu Dhabi) | None | 0% up to AED 375,000, 9% above | VAT 5%. 15% minimum tax for large groups. |
| Bahrain | None | No general corporate tax; 46% on oil and gas | VAT 10%. 15% minimum tax for large groups. |
| Qatar | None on salary | 10%; not charged on a company wholly owned by Qatari or Gulf nationals | No VAT. Qatar-source income of the self-employed may be taxable. |
| Kuwait | None | 15% for foreign companies | No VAT. 15% minimum tax for large groups. |
| Saudi Arabia | None on salary | 20% on the foreign shareholder's share; 2.5% zakat for Saudi and Gulf national shareholders | VAT 15%. |
| Oman | None until 2028 | 15% | From 1 January 2028, 5% on income above OMR 42,000. VAT 5%. |
| Monaco | None (French nationals excepted) | Profit tax applies to companies earning turnover outside Monaco | French nationals are taxed in France under the 1963 agreement. |
| Bahamas | None | None | 15% minimum tax for large groups. |
| Bermuda | None | 15% for large groups only | Corporate tax took effect in 2025. |
| Cayman Islands | None | None | No withholding tax on individuals either. |
Large group: a multinational company group with annual global turnover of EUR 750 million or more. The table shows general rates; exceptions exist depending on the sector and the structure of the company.
The first point the table brings out is that most countries with no income tax have other taxes: VAT, corporate tax, zakat or social security contributions. The question "which countries charge the least tax" therefore has no single answer; the ranking differs for an employee and for a company owner.
How does income tax work in the Gulf countries?
Five Gulf countries charge no income tax on salaries; however, their rules are not the same. In Bahrain there is no personal income tax regime; employees pay only social insurance contributions. In Qatar and Saudi Arabia, only salary income falls outside tax: in Qatar, the Qatar-source earnings of a self-employed person may be taxable, and in Saudi Arabia business income other than salary is taxed like company income. Kuwait charges individuals no income tax but charges 15 per cent tax on the profit of foreign companies.
From whom does Monaco not charge income tax?
Monaco charges no income tax on individuals resident in the country. The only exception is French nationals: under the 1963 tax agreement between France and Monaco, a French national who settles in Monaco is taxed in France as if still resident there. The Monaco example shows that a country not charging tax does not produce the same result for everyone; the person's nationality and the rules of the country they come from also affect the outcome.
What taxes apply in the Bahamas, Bermuda and the Cayman Islands?
In the Bahamas, neither personal income tax nor corporate tax applies. The Cayman Islands charge individuals no income tax or withholding tax, and companies no corporate tax, capital gains tax or payroll tax. Bermuda charges individuals no income tax and, since 2025, applies 15 per cent corporate tax only to large multinational groups. None of the three countries is on the EU's list of non-cooperative jurisdictions, updated in February 2026.
Is there tax in Dubai?
Personal income tax does not apply in Dubai, that is, in the UAE: no tax is charged in the UAE on salary or dividends. For companies the position is different. The UAE has introduced federal corporate tax for financial years starting on or after 1 June 2023. The first AED 375,000 of net profit is taxed at 0 per cent, and the excess at 9 per cent.
A Dubai company formed in a free zone is also a corporate taxpayer; the generalisation that "a free zone company pays no tax" is not correct. The UAE also applies 5 per cent VAT, and a company whose annual taxable sales exceed AED 375,000 must register for VAT. All of the rates are on the Dubai tax page; for a calculation based on your own profit, you can use the Dubai corporate tax calculator.
What costs does someone who forms a company in Dubai meet?
The absence of income tax in Dubai does not mean a company has no costs. The licence is renewed every year, and bookkeeping and the corporate tax return are mandatory; the return is filed within nine months of the end of the tax period. The types of activity that find a market in Dubai are covered in the article on business ideas in Dubai, and rent and daily spending in the Dubai living guide.
Are the rules changing in countries with no income tax?
The number of countries with no income tax is falling, and the remaining countries are introducing new taxes. Oman has become the first country in the Gulf to legislate for personal income tax: from 1 January 2028, 5 per cent tax will be charged on income above OMR 42,000 a year. The Maldives still appears on older lists, although a progressive income tax has applied in the country since 2020; the top bracket is 15 per cent.
Who is affected by the 15 per cent minimum tax?
The rules for companies have changed as well. The UAE's corporate tax took effect in 2023. The UAE, Bahrain and Qatar apply a 15 per cent minimum tax to large multinational groups in financial years starting on or after 1 January 2025; Kuwait and the Bahamas have legislated for a similar rule, and Bermuda has introduced 15 per cent corporate tax for the same groups. The minimum tax covers groups with annual global turnover of EUR 750 million or more; it does not directly affect small and medium-sized companies. A plan based on a country's current rate may lose its validity within a few years.
Which countries are tax havens, and what does the term mean?
"Tax haven" is not a legal term; it is a common name for countries that apply low or zero tax and are found inadequate in sharing tax information. Its official equivalent is formed by the lists kept by international bodies. The OECD's list of "uncooperative tax havens" has contained no country since 2009.
The list used today is that of the European Union. The EU Council's list of non-cooperative jurisdictions for tax purposes is updated twice a year. In the update of 17 February 2026, ten countries are on the list: American Samoa, Anguilla, Guam, Palau, Panama, Russia, the Turks and Caicos Islands, the US Virgin Islands, Vanuatu and Vietnam. The criterion for the list is compliance with standards of tax transparency and exchange of information; a low tax rate alone is not a reason for listing. None of the ten countries in the table above is on this list.
If you are tax resident elsewhere, does a company abroad end your tax liability?
No. Forming a company in a country with no income tax does not in itself end a person's tax liability in the country where they are tax resident. Many countries tax their residents on their worldwide income, and which country counts you as resident is decided by that country's own law, usually by where your home is and how much of the year you spend there. This is what makes tax residency the decisive factor rather than the country of the company.
If you are resident in a country that taxes worldwide income, a dividend or salary that you receive from a Dubai company may need to be declared in that country. The way a dividend from a foreign company is taxed, and whether any exemption or relief applies, depends entirely on the rules of the country of residence; for this reason it cannot be set out here in one rule. Before forming a company, your own tax adviser in your country of residence should be consulted.
How is a dividend from a company abroad taxed in your country of residence?
A person who is tax resident in a country that taxes worldwide income generally reports a dividend received from a company abroad in that country, under the rules of that country. Whether part of the dividend is exempt, and on what conditions, differs from country to country.
As long as profit stays in the company and is used for its activity, tax generally does not arise in the shareholder's country of residence on active income such as services and trade. The position can change where income is mainly passive, such as interest, rent or royalties: in some countries, profit that is not distributed can also be treated as the shareholder's income.
Does moving to a country with no income tax change your tax residency?
Tax residency determines which country can tax your income worldwide, and it depends on where you actually live. A person who is no longer resident in a country is generally taxed there only on income arising in that country; income from property in that country, for example, can continue to be taxed there.
Obtaining a residence card or visa from another country does not in itself produce this result. As long as your home and your life remain in your previous country, and you continue to spend the amount of time there that its law treats as residence, that country may still regard you as resident. If your home and life continue in your previous country of residence, a company abroad does not change your reporting obligation there.
Why are Northern Cyprus and the UK not on this list?
Northern Cyprus (TRNC) and the UK are not counted among the countries with no income tax; personal income tax applies in both. In Northern Cyprus the tax advantage is granted to a specific type of company: a Northern Cyprus Free Port company pays no corporate or income tax on activity directed at companies outside Northern Cyprus and inside the Free Port, and is not a VAT taxpayer either. The general tax rules apply to sales within Northern Cyprus. Details are on the Northern Cyprus tax page and in the article on Northern Cyprus tax advantages.
In the UK, the profit of a limited company is subject to corporation tax of between 19 and 25 per cent. A UK company is mostly chosen for its payment infrastructure and recognition. The rates and how profit is taken out of the company are explained on the UK tax page.
There are separate articles on living and working conditions in the two countries: the guide to living in Northern Cyprus and the guide to living in the UK. If you will employ staff in the UK, you can examine the UK minimum wage rates, and if you will trade in goods with the UK, the article on the EORI number.
What should those forming a company abroad look at when choosing a country?
In forming a company abroad, the tax rate is only one of the criteria that affect the decision. The country where your customers are located, the channel through which payments will be collected, whether a bank account can be opened, and the company's annual renewal and accounting costs affect the outcome as much as the lowest tax rate. For Dubai, a breakdown of these costs is in the article on the cost items of forming a company in Dubai.
To examine the three countries together on tax, cost and banking, you can consult the country comparison. If you have not yet decided which country suits your activity, the suitability test offers a starting point in a few questions. Formation steps are on the company formation page for Dubai; to have your situation assessed, you can reach us through the contact page.
Frequently Asked Questions
Is there tax in Dubai?
Personal income tax does not apply in Dubai; no tax is charged in the UAE on salary or dividends. Companies pay 9 per cent corporate tax on the part of net profit exceeding AED 375,000, and 5 per cent VAT applies to sales of goods and services. Details are on the Dubai tax page.
Which countries have no income tax?
In 2026, countries that do not apply personal income tax include the UAE, Bahrain, Qatar, Kuwait, Saudi Arabia, Monaco, the Bahamas, Bermuda and the Cayman Islands. Oman is in this group until 2028; from that date it will charge 5 per cent tax on high incomes.
Which countries charge the least tax?
There is no single ranking; the result depends on the type of tax taken as the basis. The Bahamas and the Cayman Islands charge neither personal income tax nor general corporate tax. The UAE does not apply personal income tax; however, there is 9 per cent corporate tax on company profit and 5 per cent VAT on sales.
If I form a company in Dubai, will I still pay tax in my own country?
If you are treated as tax resident in a country that taxes worldwide income, your income, including a dividend from a Dubai company, may be reportable in that country. Forming a company does not in itself end the liability there. The decisive factors are your tax residency and the place from which the company is managed.
Is it legal to form a company in a country regarded as a tax haven?
Forming a company in a low-tax country is legal. A legal problem arises where income that must be declared in the country of residence is not declared.
Is there income tax in Northern Cyprus?
Yes, personal income tax applies in Northern Cyprus. The tax advantage is granted to the Northern Cyprus Free Port company: it pays no corporate or income tax on activity directed at companies outside Northern Cyprus and inside the Free Port. Details are on the company formation page for Northern Cyprus.
When does income tax begin in Oman?
Personal income tax in Oman will take effect on 1 January 2028. Tax of 5 per cent will be charged on income above OMR 42,000 a year; income below this threshold will not be taxed.
Related serviceDubai tax frameworkCorporate tax, VAT and the points that shareholders resident elsewhere should note.View the ServiceCountry rates are taken from the PwC Worldwide Tax Summaries country pages and, for the UAE, additionally from the Federal Tax Authority and the Ministry of Finance; the EU list is taken from the EU Council document of 17 February 2026. The information is current as of 9 October 2026.
This article is for general information and does not constitute personal tax, legal or immigration advice. Tax rates and lists may change; before deciding, you are advised to assess the current legislation and your tax residency with a specialist in your country of residence.
