Estate taxes and inheritance taxes are triggered by death. This is the only similarity between the two. Countries that levy estate and inheritance tax have set exemption levels which vary from place to place.
People have to pay taxes only on the amount above the level of exemption. Compared to the other nations that levy estate tax and inheritance tax, the USA provides the highest rate of exemption. People have to pay taxes only on an amount above that limit.
Countries that levy estate tax and inheritance tax from its residents include:
- Japan
- South Korea
- France
- United Kingdom
- The USA
- Spain
- Ireland
- Belgium
- Germany
- Netherlands
- Greece
- Chile
- Denmark
- Finland
- Iceland
- Poland
- Switzerland
- Turkey
Countries that do not have estate and inheritance taxes include:
When it comes to tax on estate and inheritance Japan occupies the first position with a maximum rate of 55%. Japan is followed by South Korea with 50%, France with 45% and the UK and the US with 40% each of the total value inherited.
Factors That Decide Exemptions And Concessions In Different Countries
The following are certain factors that decide exemption and concession on the estate and inheritance taxes in different nations.
Japan: If the person inheriting the property is engaged in a public welfare activity (Charitable, Scientific, and Religious)
Ireland: When the beneficiary is a spouse or a charitable institution
New Zealand: Inheritance for charities. Inheritance less than 2000 New Zealand Dollars every year.
Spain: If the beneficiary is a family member.
Netherlands: If the beneficiary is a spouse or child.
Switzerland: Descendants, spouses and same sex couples get exemptions.
USA: A surviving spouse gets an unlimited marital deduction. If the inheritance is for charity.
UK: If the inheritance is used for charity or handed down to a political organization. Spouses who inherit the property also get exemptions from these taxes.
Estate Or Inheritance Tax Rates In Top 20 OECD Countries
Given below are the top rate of estate and inheritance taxes levied by certain countries. (Source- Tax Foundation)
| Ranking | Country | Tax Rate |
|---|---|---|
| 1 | Japan | 55% |
| 2 | South Korea | 50% |
| 3 | France | 45% |
| 4 | United Kingdom | 40 |
| 4 | United States | 40% |
| 6 | Spain | 34% |
| 7 | Ireland | 33% |
| 8 | Belgium | 30% |
| 8 | Germany | 30% |
| 10 | Chile | 25% |
| 11 | Greece | 20% |
| 11 | Netherlands | 20% |
| 13 | Finland | 19% |
| 14 | Denmark | 15% |
| 15 | Iceland | 10% |
| 15 | Turkey | 10% |
| 17 | Poland | 7% |
| 17 | Switzerland | 7% |
| 19 | Italy | 4% |
| 20 | Luxembourg | 0% |
| 20 | Serbia | 0% |
| 20 | Slovenia | 0% |
| 20 | Australia | 0% |
| 20 | Austria | 0% |
| 20 | Canada | 0% |
| 20 | Israel | 0% |
| 20 | Estonia | 0% |
| 20 | Mexico | 0% |
| 20 | New Zealand | 0% |
| 20 | Norway | 0% |
| 20 | Portugal | 0% |
| 20 | Slovak Republic | 0% |
| 20 | Sweden | 0% |
| 20 | Hungary | 0% |
| OECD Simple Average | 15% |
