The UAE has ranked first in a new global tax optimization index for internationally mobile individuals, out of 48 jurisdictions studied, according to research published by advisory firm Global Citizen Solutions. The UAE topped the ranking thanks to the absence of personal income, wealth and inheritance taxes, alongside a relatively low consumption tax.
The UAE scored 82.7 out of 100, ahead of Antigua and Barbuda at 82.2, Paraguay at 77.2, Hong Kong at 76.9 and the Bahamas at 76.2. The study, titled "Tax Optimization for Global Citizens," assessed jurisdictions across 11 indicators grouped into three categories: Tax Burden, Tax Structure and Investment Migration, with the first two each weighted at 42.5 percent and the third at 15 percent of the overall score.
The UAE recorded a perfect score of 100 for Tax Burden, 64 for Tax Structure and 86 for Investment Migration. According to the research firm, the combination of no personal income tax, no net wealth or inheritance tax, a 5 percent consumption tax and no exit charge was the main reason behind the UAE's top ranking.
The report found that low headline tax rates alone do not determine a jurisdiction's placement. Uruguay, for example, ranked 12th overall despite a personal income tax rate of up to 36 percent, recording the strongest Tax Structure score in the sample at 88, owing to its territorial approach to taxation.
None of the top 13 jurisdictions in the index levy inheritance tax, the study found, while several lower-ranked jurisdictions impose rates above 40 percent on such taxes. Germany finished last in the overall ranking with a score of 28.7.