TaxPersonal TaxKPMG predicts top tax rate to rise across the globe

KPMG predicts top tax rate to rise across the globe

Top tax rate across the globe will climb, following the UK's lead, however Eastern Europe has bucked the trend

The rest of the world could follow the UK in raising its top rate of income
tax, according to a survey by KPMG Europe.

Top personal income tax rates have declined over the past seven years, but
this could be about to reverse, finds the firm in its study of global tax rates.

‘Our study has recorded a general decline in top personal income rates over
the past seven years, but in 2010 we are seeing indications that a reversal may
be on the way, as there is speculation around increasing the top rates in the US
and a few countries in the European Union – here in the UK and also in Ireland,
specifically – are already proposing rate increases for its top earners,’ said
Sue Bonney, head of tax at KPMG Europe

The highest personal income taxes in the world are still paid by within the
European Union (EU), but with the introduction of flat rate taxes in a number of
Eastern European countries has pushed down the average rate from 41.1% in 2003
to 36% in 2009.

‘High income earners typically have the talent and credentials to migrate to
countries that have lower personal income tax rates and a need for skilled
labour, so a shift in personal income tax rates could potentially impact global
workforce mobility trends and starve some countries of so-called mobile talent.’

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