Decoding Global Tax Liability
💡 Navigating Worldwide Income: Why Your Global Tax Calculation is Unique.
For anyone earning income beyond a single border, tax planning shifts from a simple arithmetic exercise to a strategic global puzzle. Our calculator provides the precision required by automatically integrating three foundational principles of international taxation.
The Residence Principle taxes worldwide income (e.g., UK, Canada), while the Source Principle taxes income where it's earned. Without DTAA (Double Taxation Avoidance Agreement) relief, you risk double taxation. Additionally, US Citizens face Citizenship-Based Taxation on worldwide income.
Key Principles
Residence
Taxed on worldwide income (e.g., Canada, UK).
Source
Taxed where earn (e.g., Salary, Rent).
DTAA
Treaty relief via Credits or Exemptions.
Citizenship
US/Eritrea tax citizens globally.
The Core Global Tax Formula
The simple marginal tax rate is misleading. The true measure of your tax burden is the Effective Tax Rate (ETR), which accounts for allowances, social contributions (SSC), and regional levies.
ETR = (Total Tax [PIT + SSC + Local] / Gross Total Income) × 100
PIT
Personal Income Tax (Federal/National)
SSC
Social Security (High in EU)
Local
State/Municipal Taxes (e.g., NY, Spain)
High vs. Low Tax Jurisdictions
High Tax Jurisdictions
Countries like Côte d'Ivoire (60%), Japan (~56%), and Denmark (~56%) have high marginal rates impacting top earners.
Top Rate
~60%
Context
Welfare
💰 High taxes often fund extensive social services.
Zero-Tax Havens
UAE, Bahamas, Cayman Islands, and Qatar offer 0% Personal Income Tax. Ideal for high-net-worth individuals.
PIT Rate
0%
Appeal
Wealth
💰 Watch for indirect taxes and cost of living.
Low-Tax & Flat Tax
Hungary/Bulgaria offer 10-15% flat taxes. Regimes like Portugal's NHR offer special breaks for expats.
Flat Rate
10-15%
Type
Incentive
💰 Geo-arbitrage can minimize global tax burden.
Advanced Global Tax FAQs
Q. As a Digital Nomad, where is my tax residency?
Typically where you spend 183+ days or have vital interests. Nomad visas may offer special flat rates.
Q. Does capital gains income get taxed differently?
Region dependent. 0% in Singapore/Belgium, but taxed in US/UK. Our tool models this split.
Q. What is US Foreign Earned Income Exclusion (FEIE)?
Allows US expats to exclude ~$120k of foreign earnings from US tax if they meet residence tests.
Q. What is the difference between PIT and ETR?
PIT is the statutory rate. ETR is the actual % of income paid after deductions, SSC, and local taxes.
Calculator Features
- ✓Models DTAA Credits/Exemptions
- ✓Handles US FEIE (~$120k) Exclusion
- ✓Compares Social Security Impact
- ✓Includes Local/Regional Taxes
- ✓Calculates Effective Tax Rate (ETR)