Top personal income tax rates around the world have fallen by an average of 2.5% in the past six years, according to a new study from KPMG.

Thirty-three of the 87 countries surveyed have cut personal taxes in the last six years, while only seven have increased their rates.

The survey concentrates on the highest rates of tax payable to central government in each country. Though these rates are similar among many countries, the level of income at which the top rate kicks in varies widely, as the survey shows. These amounts range from about US$6,000 in India to almost US$700,000 in Switzerland.

Canadians pay the top tax rate on income over CDN$123,185, compared to income over US$357,700 in the U.S. and income equaling more than US$69,576 in the U.K.

“Of course, tax rates and brackets aren’t the only things that count when you’re comparing taxes in different countries,” said Jim Yager, partner in KPMG Canada’s International Executive Services group, in a release. “Another important factor to consider is the tax base in each country – what’s taxable and what’s not.”

The survey also compares the amount of tax an individual will generally pay on income equal to US$100,000 when provincial and state income tax and social security taxes are taken into account. Of the 72 countries included in this comparison, Canada ranks 30th from the top, with a tax burden lower than some European countries but higher than the U.S.

For example, the results indicate that an individual with income equal to US$100,000 will pay US$28,780 in tax in Canada, US$26,980 in the U.S., US$29,070 in the U.K., US$26,490 in Australia, US$35,700 in Germany and US$25,310 in Mexico .

In other words, depending on the U.S.-Canadian exchange rate, the survey indicates that an individual will pay about CDN$34,000 in tax on about CDN$118,000 in income.

“People should also keep in mind that differences in individual circumstances will affect their tax burden and careful planning can help ensure they don’t pay more tax than they have to,” Yager said.

IE