Countries that don't tax foreign income 2026

Panama, Paraguay, El Salvador, Georgia, Singapore and Hong Kong don't tax foreign income: a US$40k foreign pension plus US$20k of foreign investment income costs 0% in each of them in 2026. Malaysia exempts foreign income until 31 December 2036, and Turkey now gives people who become resident from 1 January 2026 twenty years of 0% on foreign income under article 20/D.

TaxPilot covers 153 countries, and 32 of them leave all or most foreign income alone. They do it in three ways: a territorial system that only taxes local income (21 countries), a remittance basis that only taxes what you bring in (7), or a special exemption for new residents or foreigners (4). Four more, Egypt, Kenya, Zambia and Zimbabwe, tax some foreign income but not all of it.

This guide sorts all 36 into those groups, gives the catch for each, and compares them on one scenario: a US$40k foreign pension plus US$20k of foreign investment income, with tax and compulsory contributions counted.

What's changed: Turkey's article 20/D became law on 4 June 2026 (Law No. 7582) and exempts foreign income for 20 years for people who become resident from 1 January 2026. Malaysia's foreign income exemption for resident individuals, due to end on 31 December 2026, now runs to 31 December 2036. Mauritius's Finance Act 2026 extends the Premium Visa remittance rule for remote work to Golden Visa holders. In Georgia, foreigners without a permanent residence permit have needed a "right to work" since 1 March 2026 to take a Georgian job or work for themselves there. Dominica has announced that from 1 January 2027 only income earned in Dominica would be taxed, and Costa Rica and Honduras have discussed moving to worldwide taxation: all three are Proposed, not law.

📋 Where foreign income costs 0% in 2026

Bolivia, Malawi, Nicaragua, the Philippines and Turkey also charge no income tax on this income, but rate Good rather than Excellent because a spouse or children can pay a death tax: Bolivia charges 1% on inheritances of assets in Bolivia, Malawi has an estate duty, Nicaragua taxes inheritances of Nicaraguan assets at 15%, the Philippines charges 6% estate tax on a resident foreigner's worldwide estate, and Turkey charges a flat 1% on inheritances of Turkish assets under article 20/D. Moldova (about 0.2%, the fixed health premium) and Taiwan (about 0.5%, the flat NHI premium) come next: neither taxes this income, but a small health charge applies, and Taiwan rates Good because its estate tax reaches a spouse or children on Taiwan assets. Costa Rica doesn't tax this income either, but pensionados and rentistas must pay CCSS health and pension contributions, about 10.7% of this example, so it rates Good.

The graphic shows eight countries where a US$40k foreign pension plus US$20k of foreign investment income costs 0% under 2026 rules: Panama, Paraguay, El Salvador and Georgia (territorial systems), Malaysia (exempt to 2036), Singapore and Hong Kong, all rated Excellent for retirees, and Turkey (20 years for new residents under article 20/D), rated Good because of its 1% inheritance tax.

How we compare countries

Our test case is the TaxPilot retiree profile: a US$40k foreign pension plus US$20k of investment income, under 2026 rules. We count income tax plus any compulsory social security or health contributions, so a health premium on pensions shows up even where income tax is nil. Ratings are relative to the 153 countries we cover.

• Excellent: 5% or less, and no death tax payable by a spouse or children

• Good: up to 15%

• Moderate: over 15%, up to 25%

• Poor: over 25%, or a heavy inheritance or wealth tax

Each band includes its upper limit.

We also show the investment income rating: a US$1m portfolio earning 4% income and 4% realised gains. Excellent means untaxed (a flat health premium counts as a charge), Good is up to 15%, Moderate over 15% up to 30% and Poor over 30%. A wealth tax moves both ratings down one level. Pensioner and investor regimes count, so Turkey's 20/D exemption is in the rating.

Three ways a country can leave foreign income alone

"No tax on foreign income" means different things in different places, and the difference decides whether you can bring your money in.

• Territorial or source basis: only income from the country itself is taxed. Foreign income stays outside the tax whether you leave it abroad or bring it in.

• Remittance basis: foreign income is taxed only when you bring it into the country, usually for residents who aren't domiciled or ordinarily resident there. Leave it abroad and it isn't taxed.

• New-resident or foreigner exemptions: the country taxes worldwide income in principle, but exempts foreign income for a group of people, such as new arrivals, retirees or foreign citizens.

One rule cuts across all three. Income from work you physically do in the country is local income almost everywhere, even when a foreign employer pays it into a foreign account. A pension or a portfolio is foreign. A laptop job done from the beach usually isn't.

The best options explained

Panama

Article 694 of the Fiscal Code taxes income produced inside Panama, wherever it's received. Income produced elsewhere is outside the tax for everyone, and bringing foreign income into Panama doesn't create a charge. A foreign pension plus foreign investment income costs 0%, and the Pensionado visa needs only US$1,000 a month.

The catch is remote work. The tax authority says you pay income tax on income from activities carried out in Panama, so work you do while physically in Panama for people abroad sits in a grey area with no published ruling.

👉 Law 1 of 2014: the text of Article 694 of the Fiscal Code, published by Panama's Judicial Branch (in Spanish)

👉 Panama expat tax guide

Paraguay

Paraguay's personal income tax (IRP) only reaches income from activities carried out in Paraguay and from assets or rights used there. A foreign pension, a foreign brokerage account or a flat abroad all sit outside it, so our retiree example costs 0%. Paraguayan capital income and gains pay a flat 8%, and salaries and fees 8% to 10%.

Two catches: remote work done from Paraguay is probably Paraguayan income, taxed at 8% to 10%, and services you perform abroad count as local when the client is a Paraguayan taxpayer.

👉 Paraguay expat tax guide

Costa Rica

Article 1 of the Income Tax Law (Law 7092) taxes only income "of Costa Rican source", whatever your nationality or residence. Foreign pensions, foreign dividends and interest, rent from a property abroad and gains on foreign assets aren't taxed, and there's no inheritance or wealth tax.

The catch for retirees is the CCSS. Pensionados and rentistas must join it and pay health and pension contributions, which we estimate at about 16% of a US$40k pension (roughly US$6,400 a year), or about 10.7% of our full example, so Costa Rica rates Good rather than Excellent. It depends on the income the CCSS uses: about 2% at the US$1,000 minimum base, up to about 19% if it counts all your income.

Work you do in Costa Rica for foreign clients can be treated as local, though the digital nomad stay removes that doubt for people who qualify: US$3,000 a month from abroad, and holders pay no income tax on their foreign pay. Moving to worldwide taxation is Proposed, not law.

👉 Costa Rica expat tax guide

El Salvador

Decree 969, in force from 22 March 2024, says income or capital received from any source abroad isn't income for tax purposes, for residents and non-residents alike. That covers foreign pensions, dividends, interest, gains and savings you transfer in. The wealth tax was abolished in 1994.

Services provided in El Salvador still produce Salvadoran income even when paid from abroad, so remote workers should keep evidence of where the payer and the work are based. Rentista residence needs at least US$1,635.20 a month from abroad and bars paid work in El Salvador.

👉 Asamblea Legislativa: Decree 969 of 2024, excluding foreign-source income (in Spanish)

👉 El Salvador expat tax guide

Georgia

Georgia exempts any income of a resident that isn't Georgian-source. Foreign dividends, interest and gains, rent from property abroad and a foreign pension all stay outside the tax, and a 2019 Ministry of Finance ruling treats an individual's crypto gains as not Georgian-source.

The definition of Georgian-source income is wide, though. If you sit in Tbilisi working for an employer abroad, your salary is taxable in Georgia at 20%, and a freelancer working for foreign clients pays 1% with small business status or 20% without it.

👉 Tax Code of Georgia: exempt income (Article 82) and Georgian-source income (Article 104)

👉 Georgia expat tax guide

Malaysia

Malaysia can tax foreign income once it's received there, but an exemption order switches that off for resident individuals until 31 December 2036. Foreign income you leave abroad isn't received at all, and individuals pay no tax on share gains, so our retiree and investor examples both rate Excellent.

Income you bring in must have been subject to tax in the country it came from, which the guidelines say is also met if that country's system didn't tax it. Partnership income doesn't qualify, and a salary earned sitting in Kuala Lumpur is Malaysian income even if it's paid abroad.

👉 Inland Revenue Board of Malaysia: guidelines on income received from abroad

👉 Malaysia expat tax guide

Singapore

Foreign income you receive in Singapore, including money paid into a Singapore bank account, is generally not taxable for individuals. Foreign dividends, foreign interest and gains on shares aren't taxed, and estate duty was removed in 2008.

The exceptions are income received through a Singapore partnership and overseas work that's part of your Singapore job. Working in Singapore for a foreign employer is taxable, and there's no retirement or digital nomad visa, so the hard part is the right to stay.

👉 IRAS: income received from overseas

👉 Singapore expat tax guide

Hong Kong

Hong Kong taxes income by source, not by residence. Individuals pay no tax on foreign income, including overseas pensions and rent, on capital gains, or on dividends and bank interest, and estate duty was abolished in 2006.

Salaries tax still applies to a Hong Kong employment. There's no digital nomad visa; the Top Talent Pass Scheme is a route for graduates of leading universities and high earners.

👉 IRD guidance: the territorial source principle of taxation

👉 Hong Kong expat tax guide

Turkey

Article 20/D takes everything you earn outside Turkey out of Turkish income tax for 20 years if you become resident on or after 1 January 2026 and had neither a Turkish domicile nor Turkish tax liability in the three calendar years before. A foreign pension, foreign dividends, rent from a home abroad and gains on foreign assets aren't declared at all, and inheritances of Turkish assets in those years are taxed at a flat 1%, which keeps Turkey at Good rather than Excellent for retirees.

The exemption isn't automatic: you apply to your tax office by the end of the year you became resident (end of February if that was November or December), and you can't apply later. Without it, our retiree example costs about 31%. Fees for work you do in Turkey are Turkish income, even for clients abroad.

👉 Official Gazette: Law No. 7582, which adds article 20/D and the 1% inheritance rate (in Turkish)

👉 Turkey expat tax guide

Malta

Malta is the best-known remittance basis country. If you're resident but not domiciled, foreign income is taxed only if it's received in Malta, and foreign capital gains aren't taxed even if you bring the money in. Non-dom status has no time limit.

The catches: a €5,000 minimum tax applies once foreign income reaches €35,000 and you don't bring it all in, money sent for living costs is presumed to be income, and long-term resident status or a permanent residence certificate puts you on worldwide tax. Pension income is exempt up to €37,104 if you're 61 or over, which brings our retiree example to about 2%.

👉 Malta Tax and Customs Administration: guidance note on the remittance basis of taxation

👉 Malta expat tax guide

The full list: all 36 countries by group

Territorial and source-basis countries

These 21 countries only tax income from a local source, so foreign income stays untaxed whether or not you bring it in. Some limit the rule to foreigners, or reach foreign income from local money.

☑️ Territorial tax countries in 2026 (21)

Remittance basis and non-dom countries

These 7 countries tax foreign income only when it reaches the country, usually for residents who aren't domiciled or ordinarily resident there. The rule rewards keeping income abroad and living on capital.

☑️ Remittance basis countries in 2026 (7)

Exemptions for new residents or foreigners

These 4 countries tax worldwide income in principle but exempt foreign income for a defined group.

☑️ Foreign income exemptions for new residents or foreigners in 2026 (4)

Partly: source rules with exceptions

These 4 countries tax mainly local income, but some foreign income is still caught, so check which kind you have.

☑️ Countries that tax only some foreign income in 2026 (4)

Traps and what to check

• Remote work is usually local income. Georgia, Singapore, Malaysia, Mauritius, Paraguay and Kyrgyzstan all treat work you physically do there as local, wherever you're paid. Panama and El Salvador leave it as a grey area. Barbados's Welcome Stamp and Costa Rica's digital nomad stay are the clearest exceptions.

• Bringing money in. On a remittance basis, transfers, property you bring in and credit secured on foreign income can all count. Keep capital and income in separate foreign accounts.

• Money from the country itself. Jordan taxes foreign income from Jordanian money at a flat 10%, and Nicaragua taxes foreign capital income of Nicaraguan origin at 15%.

• Foreign interest. Namibia, Eswatini, Zambia and Zimbabwe tax foreign interest once you're ordinarily resident, even where dividends or pensions are free.

• Status changes. A residence permit brings foreign income into tax in Kyrgyzstan, long-term residence ends the remittance basis in Malta, and a permanent home makes you ordinarily resident in Saint Lucia.

• Death taxes and health charges. Malawi and Zimbabwe have an estate duty, the Philippines charges 6% estate tax on a resident foreigner's worldwide estate, Bolivia, Malta, Nicaragua, Taiwan and Turkey can tax what a spouse or children inherit from local assets, and Kenya's SHIF, Taiwan's NHI and Costa Rica's CCSS apply even where income tax is nil.

• Your home country. Moving somewhere that doesn't tax foreign income only helps if your old country stops treating you as resident. Check its leaving rules and any exit tax before you go.

• Proposed changes. Dominica's local-income-only rule from 2027 and the worldwide tax plans in Costa Rica, Honduras and Malawi are Proposed, not law.

Frequently asked questions

Which countries don't tax foreign income?

Territorial countries such as Panama, Paraguay, El Salvador, Georgia, Singapore and Hong Kong only tax local income, so a foreign pension or portfolio is untaxed. Malaysia exempts foreign income until the end of 2036, and Turkey gives new residents 20 years of 0% under article 20/D.

What is a territorial tax system?

A territorial system taxes only income that comes from the country itself, such as a local job, local clients or local property. Foreign income stays outside the tax even if you live there and bring the money in. TaxPilot counts 21 territorial or source-basis countries in 2026.

Is remote work for a foreign employer foreign income?

Usually not. Most countries treat work you physically do there as local income, wherever your employer is and wherever you're paid; Georgia, Singapore and Malaysia say so clearly. A few nomad routes, such as Barbados's Welcome Stamp, are the exception.

What is the remittance basis?

It means foreign income is taxed only when you bring it into the country. Malta, Ireland, Mauritius, Barbados, Guyana, Saint Lucia and Trinidad and Tobago use it, mostly for residents who aren't domiciled or ordinarily resident there.

Does Malaysia tax foreign income?

Not for resident individuals until 31 December 2036. Income you bring in must have been subject to tax where it arose, partnership income doesn't qualify, and work you do in Malaysia is Malaysian income. See the Malaysia expat tax guide.

Does Turkey tax foreign income in 2026?

Residents are taxed on worldwide income, but article 20/D exempts foreign income and gains for 20 years for people who become resident from 1 January 2026 after three years with no Turkish domicile or tax liability. You must apply by the end of the year you become resident.

Does moving to a territorial country stop tax at home?

Not by itself. Your home country decides when you stop being resident there, and some charge an exit tax. Check its leaving rules first; see the hardest countries to stop being tax resident.

Where to go next

👉 Countries with no income tax

👉 Special tax regimes for new residents

👉 Best countries for retirees

👉 Best countries for investors

👉 Easiest countries to become tax resident

👉 Hardest countries to stop being tax resident

👉 Best digital nomad visas

👉 Panama expat tax guide

👉 Malaysia expat tax guide

👉 Malta expat tax guide