KPMG’s individual income tax and social security rate survey found the global average top personal income tax rate rose 0.3% last year.

This is only the third time over a decade that a global increase in top earner tax has been recognised globally.

"In large part, this upward tick in personal tax rates is the result of a lack of economic recovery and increasing debt concerns," said Brad Maxwell, a partner with KPMG’s international executive services (IES) practice in Switzerland.

The research suggests that UK government plans to cut tax for the wealthiest from 50% to 45% in April 2013 is out of step with global trends where tax levels are increasing.

Even before the rate reduction is taken into effect, the UK drops from 4th to 5th highest in the EU.

With new rates, the UK will be closer to the EU average which is just over 37% and, if weighted for the different size of populations in the various countries, is 42%, according to KPMG’s calculations.

How well do you really know your competitors?

Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.

Company Profile – free sample

Thank you!

Your download email will arrive shortly

Not ready to buy yet? Download a free sample

We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form

By GlobalData
Visit our Privacy Policy for more information about our services, how we may use, process and share your personal data, including information of your rights in respect of your personal data and how you can unsubscribe from future marketing communications. Our services are intended for corporate subscribers and you warrant that the email address submitted is your corporate email address.

KPMG UK head of IES, Marc Burrows, commented: "The £50p rate was always described as temporary and so a firm commitment to its reduction was very welcome to businesses and entrepreneurs."

He added, "Being ‘open for business’ is not just about the corporate tax regime. Personal tax is a major issue for entrepreneurs, high net worth individuals and senior executives, many of whom can and do exercise considerable discretion over where they choose to locate."

In the meantime, Spain jumped from 10th to 3rd highest by increasing its tax rate from 45% to 52% in January 2012. Under France’s new government, the country also saw the introduction of two new tax rates for high income earners. The top rate increased from 41% to 45% since 2012.

This will change further as François Hollande is also planning the implementation a 75% tax rate band for taxpayers earning over EUR1, 000,000.


Source: Private Banker International