Eight Countries with Zero Income Tax

Paying taxes from your hard earned income is like a burden for you. The word 'tax' also scares you even in your dreams. What will you feel if one day the government announces that from now on you shall not be required to pay income tax? It may sound very unreal but for some countries it is true.

There are eight countries in the world where the citizens pay zero income taxes, as reported by CNBC based on KPMG's 2011 survey of 96 countries.

1.United Arab Emirates

The United Arab Emirates is a country with the world's highest per-capita incomes i.e $48,000 but it does not charge personal income taxes to its citizen. It is the third highest exporter of crude oil so it largely depends on the taxes paid by the oil companies which amount to 55 percent in corporate tax.

As a citizen you will be asked to contribute 5 percent of your total earning for social security and your employer shall pay 12.5 percent of your base salary for your pensions and social security.

2.Qatar

Qatar, the gas rich nation is the richest country in the world with the highest Gross Domestic Product (GDP) above $ 88,000, according to Forbes. It primarily relies on its third largest gas reserves in the world to earn revenue. The country levies no taxes on personal incomes, capital gains, property dividends, royalties and profits.

As a Qatar citizen, you will have to pay 5 percent of your total income and your employer will contribute 10 percent for your security benefits.

3.Oman

Oman earns majority of revenue from crude oil. The crude oil revenue increased by 35 percent in April 2011 to $8.49 billion against the statistics of 2010. Being a resident of this nation you must pay 6.5 percent of your monthly salary for social security benefits.

You will also be charged with 3 percent of stamp duty for owning a property in the nation. You will also witness several protests by the countrymen, demanding jobs and employment benefits.

4.Kuwait

Kuwait, world's sixths largest oil exporter, achieves 95 percent of its total revenue from the sale of oil. Out of the entire population only 7 percent of Kuwaitis work in the public sector and each contribute 7.5 percent of their salary as tax and 11 percent is paid by their employer for social security. Being a Kuwaiti you shall be no stranger to the political chaos and corruption scandals. Taking into consideration Kuwaitis political and economic conditions International Monetary Fund's dignitaries have recommended Kuwait to introduce the value-added tax and comprehensive income tax system.

5.Cayman Islands

An off shore financial center, the Cayman Islands is a place for big pocketed people who are ready to pay $ 550,000 for an apartment and $ 736,000 for a house, according to government figures in April 2011. You can still relax over social security contributions, personal income taxes and capital gains taxes as these are not compulsory to be paid.

As an employer you are required to pay pension plan for all your worker, including the expatriates (refugees), if they have worked for more than nine months.

6.Bahrain

Abu Safa oilfield generates 70 percent of Bahrain budget revenue inspite of the fact that this oilfield is shared with Saudi Arabia. Being an employer you will make a contribution of 12 percent of your employee salary and they shall put in 7 percent for their social insurance. A stamp duty of 3 percent of the property value is paid registering property in your name. If you are an Expatriate and you rent a house in the Persian Gulf state then you would be required to pay 10 percent municipal tax.

7.Bermuda

Bermuda is a nation where you will have to spend more money as the cost of living index is quite high. Custom duty charged on the imported goods turns up to be a bigger source for the government. The total population of Bermuda includes 20 percent of foreign born. For relocating you will be charged with 25 percent for the goods you take along and a 10 year work permit in this nation will cost around $20.000.

8.The Bahamas

The Bahamas is one among the wealthiest Caribbean countries and it depends highly on tourism and off shore banking for its economy. Duties on imported goods fetch 70 percent of the government revenue.

As a self employed individual you shall have to contribute 8.8 percent of your income earned for social security called National Insurance.