If you’re considering emigrating to save on taxes, this article will help you weigh the pros and cons carefully. In this article, I focus on general taxation. Taxation for businesses consideration will be a separate article. We’ll examine:
✔ Countries with high taxes but strong public services
✔ Low-tax nations—what you gain and lose
✔ Places with high taxes and poor returns (like Brazil)
✔ Canada’s special case: High taxes with declining returns
✔ Why lifestyle and opportunity matter more than taxes
1. High Taxes, High Services: The Trade-Off
Countries like Sweden (52% top tax rate), Germany (45%), and Denmark (56%) demonstrate that high taxes can work when efficiently deployed:
- Universal healthcare with <4 week specialist wait times
- Tuition-free university (even for international students in Germany)
- Efficient infrastructure: High-speed rail, clean cities
- Strong safety nets: 1+ year paid parental leave
Best for: Families, those prioritizing stability over wealth accumulation
2. Low Taxes, Fewer Services: The Hidden Costs
Tax havens like UAE (0% income tax), Monaco, and Singapore (22% top rate) offer relief but require self-sufficiency:
- Healthcare: $5,000+/year for private insurance
- Education: $20,000+/year for international schools
- Housing: $3,000+/month for modest apartments in prime areas
- No pensions: Must self-fund retirement
Best for: High earners with no kids, temporary “tax tourists”
3. The Worst of Both Worlds: High Taxes, Poor Returns
Some countries combine high taxes with inefficiency:
- Brazil (28-33.5% income tax + 25% VAT):
- Crumbling infrastructure
- 12+ month wait for surgeries
- Rampant bureaucracy & corruption
- Argentina (35% income tax + 21% VAT + wealth tax):
- 100%+ annual inflation
- Currency controls
- Bureaucracy & corruption
Avoid unless: You have strong local connections
As of this writing, Argentina’s president Javier Milei is making major structural changes to the country. Time will tell if Argentina will become an attractive option in the future.
4. Canada’s Dilemma: First-World Taxes, Third-World Infrastructure
The Tax Burden
- 53.5% top marginal rate in Ontario on income (2024)
- Insane taxation system: Besides income taxes, you are also paying a thousand other taxes such as…
- Property taxes (2-4x higher than U.S. counterparts)
- Luxury vehicle taxes (20% on cars over $100k)
- Air travel taxes ($100+ per domestic ticket)
- Investment income gets added to your total income, with special tax treatment on specific types such as capital gains tax and dividend gross up rules
Where the Money Goes
- Healthcare (40% of provincial budgets which differs from the federal and municipal budgets):
- Worst specialist wait times in developed world (27.4 weeks)
- Emergency room deaths up 48% since 2019
- 20% of rural communities lack doctors
- Infrastructure:
- Toronto subway costs: 1$B/km vs. $250M/km in Berlin. The unionized environment and “corruption” in awarding contracts ramps up the costs significantly
- Toronto won 3rd place for slowest traffic in 2023. All that money spent isn’t even solving the traffic issue
- Besides transit infrastructure, the major cities haven’t modernized as much as other countries. Toronto where I grew up looks about the same as it did when I my family first came to Canada almost 30 years ago
The Oligarchy Premium
Canada’s concentrated industries inflate costs:
- Banking: Big 6 control 93% of assets ($16.95/month fees)
- Telecom: 3 providers dominate ($7.50/GB data vs. $2.50 in UK)
- Groceries: 3 chains control 75% of market
Citizens were complaining so badly about grocery prices that the government stepped in and threatened to implement price controls or punitive taxes in 2023 and 2024. The real solution to ensuring fair prices is by creating a competitive business environment.
Hidden Structural Costs
- Municipal Development Charges*:
- ~$150,000/home in GTA→adds $300-$500/month to mortgages
- Forced Automobile Economy: You really need a car to live in Canada
- Insurance monopolies run by the government (ICBC profits up 42% in 2023)
- Carbon tax adds $1,200/year to fuel costs
*Development charges (DCs) are fees levied by the municipal government on home developers. Development charges can be as much as 1/3 of the total cost of bringing a house online (total cost = cost of land purchase + land development + constructive costs). $150k is a rough estimate on a $1M new home where total costs can be expected to be around $700k. Yes! On a $1M house, the government is responsible for ~$150k of the price. Basically a sales tax. The government supposedly will take the development charges and build infrastructure. Whether they actually do is questionable.
The Canadian Paradox: Pay premium taxes for oligopoly-priced services and deteriorating infrastructure.
5. The Biggest Factor: Can You Actually Thrive There?
Ask yourself:
- “Will I earn enough?” Portugal’s low taxes mean little on €25k salaries
- “How are the self employment prospects?” Many emigrants start a business
- “Can I build a social life?” Dubai’s 0% tax won’t replace community
- “Is the trade-off worth it?” All savings vanish if you hate the climate/culture
Before You Go:
- Live there temporarily (3-6 months)
- Join expat groups for unfiltered experiences
- Research! Research! Research!
Final Verdict:
The happiest expats choose destinations offering:
✅ Reasonable tax burdens
✅ Strong professional or business opportunities
✅ Genuine quality of life
Don’t just escape high taxes—find somewhere you can truly prosper. Tax planning is a key consideration when it comes to emigration but it should not be your sole reason.