Nearly all countries that offer return-free systems have “exact-withholding” systems, of which there are two types: “cumulative” systems (used in the United Kingdom and Russia) and “final-withholding” systems (used in Germany and Japan). Some countries combine one of these approaches with other requirements. In Chile, for example, taxpayers are not eligible if they wish to file for refunds of excess withholdings.
COUNTRIES WITH TAX AGENCY RECONCILIATION SYSTEMS
Denmark and Sweden, both small countries, operate tax agency reconciliation systems. About 87 percent of Denmark’s taxpayers and 74 percent of Sweden’s had their returns filled out by the tax authorities in 1999. Spain, Estonia, Finland, Norway, and Iceland have also implemented tax agency reconciliation systems.
THE BRITISH EXPERIENCE
Britain’s Pay As You Earn system, which has incorporated exact withholding since the 1940s, has several features that facilitate return-free filing. One is that it treats the individual (rather than the family) as the unit of taxation. Another is that a large proportion of taxpayers (64 percent) are taxed at the same “basic” marginal rate. The system was reformed in April 2013 to require employers to report salary payments in real time, with the goal of decreasing withholding errors. The reform also linked revenue collection and benefit payments to the same database, increasing efficiency.
Despite the clear need for the changes, concern still exists as to whether real-time reporting places a disproportionate burden on small businesses. To minimize the problem, small employers have been temporarily allowed to file payments monthly. In 2014, about 90 percent of the United Kingdom’s income tax revenue was collected through Pay As You Earn.
FILING RATES
The portion of taxpayers who still have to file returns varies widely by country. About 90 percent of taxpayers eligible for final withholding in the United Kingdom did not have to file in 2014. The figures for other countries are dated, but there’s no reason to believe that they are unrepresentative. In Germany in 1986 and in Japan in 1988–90, the corresponding figures were 46 percent and 63 percent, respectively.
Many countries, it should be noted, maintain a filing requirement for taxpayers with more than one job. At least one, Kenya, requires taxpayers to file a return if their personal circ*mstances change during the year.
Updated May 2020
FAQs
Indeed, an estimated 36 countries — including the United Kingdom, Germany, Japan, Spain, Denmark and Sweden — have implemented return-free filing. The UK's “Pay as You Earn” system, in operation since the 1940s, taxes around two-thirds of its taxpayers at the same basic marginal rate.
Do other countries use TurboTax? ›
International versions. Intuit also addresses Canadian tax returns with an entirely separate product also named TurboTax, but previously called QuickTax. The French version has retained its original name ImpôtRapide until 2017, when it was renamed TurboImpôt.
Does any other country do tax returns? ›
Imagine a world where the government filed your taxes for you for free and all you had to do was sign off on it. This is the way it's done in some European countries, Denmark, Sweden, Spain, the United Kingdom. It's called Ready Return. Here in the U.S., we aren't so lucky.
Who owns free fillable forms? ›
Free File Fillable Forms is operated by a private organization, the Free File Alliance and not the IRS. Though IRS links to it, they do not endorse it or any product. Free File Fillable Forms is an electronic version of IRS paper forms.
Does Canada do return free filing? ›
File your simple Canadian tax return for free with no hidden fees. Follow a simple step-by-step process to fill out your return and our software does the math for you and stores your information to use on next year's return. Save time by importing your tax slips into your return from the CRA with Auto-fill my return.
What country does not file taxes? ›
At present, there are 14 tax-free countries around the world. These include Antigua and Barbuda, St. Kitts and Nevis, the United Arab Emirates, Vanuatu, Brunei, Bahrain, the Bahamas, Bermuda, the Cayman Islands, Monaco, Kuwait, Qatar, Somalia, and Western Sahara.
Which country has the simplest tax system? ›
For the ninth year in a row, Estonia has the best tax code in the OECD, according to the freshly published Tax Competitiveness Index 2022. Estonia's transparent and simple tax system attracts investments with no corporate income tax, no capital tax, no property transfer taxes.
Is TurboTax only for US citizens? ›
If you are a nonresident, you can use the Sprintax software to prepare your tax forms. You can't use TurboTax or other tax software designed for residents!
Do other countries pay taxes like the US? ›
As for who pays more in taxes, it depends on a particular country. The US has higher rates compared to Eastern European countries (Poland, Bulgaria, Romania, Hungary), but lower rates in contrast with Western European states (France, Germany, Denmark, and the UK).
Why is the US tax system so complicated? ›
Because the U.S. tax system is trying to do more than collect taxes, according to experts. Congress uses the tax system as a tool to achieve economic and social goals and then relies on a beleaguered IRS to execute those plans. "Congress, in writing the law, tried to build into the code incentives for social benefits.
Key Takeaways
- Bermuda, Monaco, the Bahamas, and the United Arab Emirates (UAE) are four countries that do not have personal income taxes.
- U.S. citizens are obligated to file and pay U.S. income taxes even if they live in another country.
Do I still need to file a U.S. tax return? Yes, if you are a U.S. citizen or a resident alien living outside the United States, your worldwide income is subject to U.S. income tax, regardless of where you live.
Is Freefillableforms legit? ›
It is safe to use Free File Fillable Forms at a public computer. However, If you are using a public computer, such as a public library computer or other shared computer, be sure to sign out and completely close the Free File Fillable Forms browser before leaving the computer.
Is free file actually free? ›
As long as you meet the eligibility criteria for the IRS Free File provider's offer you selected, you must not be charged for the electronic preparation and filing of a federal tax return. Some IRS Free File providers do charge a fee for state tax preparation.
Is Free tax USA legit? ›
FreeTaxUSA isn't as approachable as tax software like H&R Block or TurboTax, our top pick for best tax software in 2023, nor does it have the same level of professional help and support. It's also not completely free like Cash App Taxes, but FreeTaxUSA is a thorough, efficient and robust low-cost option.
Why doesn t america have return free filing? ›
Commercial Tax Preparation
As part of the deal, the IRS agreed not to compete with the private sector in the free tax preparation market. In 2007, the House of Representatives rejected legislation to provide free government tax preparation for all taxpayers.
Can foreigners use FreeTaxUSA? ›
If you're a U.S. citizen or resident alien, you can use the FreeTaxUSA software to file Form 1040. If you're a nonresident alien, you'll need to file your return using different software.
What countries have H&R Block? ›
Get detailed information from our country guides below or see the full list of countries we support.
- Australia.
- Canada.
- China.
- France.
- Germany.
- Hong Kong.
- Japan.
- Mexico.
In Estonia, it famously takes the average person five minutes to file taxes.
