Income tax, corporate tax, inheritance tax… These are taxes that all expats are familiar with because they exist in nearly all countries. But have you heard of municipal taxes for owning a dog in Switzerland, tax breaks for donating deer meat in South Carolina, or the compulsory church tax for German church-goers? Here are some lesser-known tax laws in parts of the world. In most cases, expats also need to pay them.
Switzerland and Germany have a dog tax
In most countries, dog owners need to pay for a dog license, but in Switzerland and Germany, they need to pay twice: first to register their dog(s) and then a yearly municipal dog tax.
The exact amount of this tax depends on the municipality expats live in as well as the size, weight and breed of their dog(s). Guide dogs and rescue dogs are exempted or pay only reduced taxes. This dog tax is used to improve public services that the animals use, such as public parks, other car-free spaces where it's safe to walk, and public dog-waste disposal systems (e.g., the Robidog bin system in Switzerland).
The Swiss equivalent for municipalities is “cantons,” and in total, the country has 26 cantons. Within 10 days of moving to Switzerland, new expats must take their dog to a veterinarian in their carton who will microchip the pet and register it in a central database, the AMICUS database. This is compulsory, not optional. After this, the dog owners will need to pay a yearly tax that varies between 40 and 150 Swiss francs (US$45-US$170) per dog.
The dog tax has existed in Germany since the 19th century when it was part of the public health strategy to reduce rabies. The amount of tax an expat needs to pay varies according to multiple factors, so it can range from €70 to €1,000 per dog. It is higher in big cities – the average Berliner pays €140 for one dog. A second or third dog will be more expensive, costing a Berliner €180 in taxes. In the western city of Wuppertal, the lowest dog tax is €160. Dogs considered dangerous and can attack people face the highest taxes of up to €1,000. So, expats who own a Bull Terrier or Great Dane must be prepared to fork out a thousand euros in taxes for their dog.
In multiple European countries, a church tax is compulsory for registered church members
In some European countries which have historically been Christian, a church tax still exists. It is optional for the general population, but it is compulsory if a resident is officially registered with a particular church. This form of taxation exists in Germany, Austria, Sweden, Finland, Denmark and most cantons of Switzerland.
Those unwilling to pay this tax have no choice but to formally deregister from their church. An increasing number of people in Germany, for instance, have been deregistering from the Catholic church and various Protestant churches to not pay the church tax, which is called “kirchensteuer” there. They need to deregister at a state authority (e.g., a county court) by bringing their ID or (for expats) passport and filling out a form.
The rates of church taxes vary widely. In Austria, it is only 1.1% of a person's annual taxable income. In Germany, it is 8-9% of a person's income tax (not gross income) – the small fluctuation depends on the state. Legally speaking, all religious institutions, even Jewish or Hindu ones, have the right to impose a religious tax on their members in Germany and Austria, but in practice, only Christian churches do it.
In Sweden, the church tax varies between parishes, but it is generally between 0.8-1.5% of a person's taxable income. It is pretty high in Switzerland: 18-21% of a person's income tax, with the Catholic church charging more than Protestant churches. If a Catholic Spanish expat moves to Switzerland and hopes to have a church community there, they should be prepared to pay around 21% of their income tax to the church. In Denmark, the rate depends on the parish's budget and the general economic situation, but the average is 0.87% of a church-goer's taxable income.
“Strange” baby names can be taxed by the Swedish state
In most countries, parents have near-complete freedom in naming their child. A few countries have a register of approved names from which parents must choose, although expat parents may be granted waivers because the ethnic names from their home countries are different. Sweden is an unusual country because, while there is no list of approved names there, the Swedish Tax Agency has the right to levy a tax on parents who choose unusual names!
The Swedish Tax Agency is the governmental body that is in charge of approving newborns' names. It has the right to levy a hefty fee of 5,000 krona (nearly US$800!) if the name is deemed confusing, offensive or difficult to pronounce. This fee is half between a tax and half a fine. In the past, names like “Ikea” and “Allah” have been taxed and rejected for being confusing and potentially religiously offensive.
Sweden does not grant birthright citizenship to a child without at least one parent with Swedish citizenship. A child born to two expats who haven't acquired the local nationality will be given a residence permit by the Migration Agency to live there. However, Swedish expats living in other countries who need to get their newborn registered back home can be taxed by the Swedish Tax Agency if they choose a name that is too strange.
Junk food is taxed in the Indian state of Kerala
Cigarettes, alcohol and sugary drinks are taxed in many countries around the world to discourage their consumption because the latter leads to health problems. In 2016, to combat obesity and the illnesses related to it, the southern Indian state of Kerala also imposed a 14.5% excise tax on the sale of food considered “junk food” in fast food outlets, franchised cafés and franchised restaurants. When this law was enacted, Kerala had the second-highest obesity rate among all Indian states.
The food taxed in Kerala includes (but is not limited to) burgers, pizzas, tacos and doughnuts. This tax doesn't apply to street food or food from small family-owned restaurants because they are not part of a franchise. So, for expats living there, it will be considerably cheaper to buy a burger from a non-franchised restaurant than from Burger King or KFC. It is not clear if this policy has been effective because in 2021, five years after the excise tax was implemented, nearly 40% of Kerala's population was still obese. Some critics say that the tax is not wide-ranging enough, as fast food outlets are only a minority of the places where Keralites buy “unhealthy” food.
Denmark also had a tax on fatty foods between 2011 and 2012. It added a tax of 16 crowns (about US$2.50) on cooking oil, meat and dairy. In a single year, it did change local consumption patterns, but the law was quickly scrapped because of its economic impact on businesses. If you're an expat moving to Denmark soon, you no longer need to worry about being taxed extra on a block of cheese or a can of sausages.
In the US, you can get tax breaks over things like clarinet lessons, deer meat and your wedding dress
The US has a reputation for being a country where people can easily sue, but perhaps it should also be known as a country of tax breaks. Its various states have an eccentric array of expenses that can earn residents (including expats, of course) tax credits.
If you're getting married soon, you might get tax credits from the IRS for certain wedding expenses, especially if they are associated with donations. After the wedding, if you donate your wedding dress and the bridesmaids' dresses to a charity like Brides for a Cause and Brides Against Breast Cancer, you will get a tax deduction for the original cost of these dresses. The same goes for donating leftover wedding food to soup kitchens or homeless shelters, as well as for donating decorations (vases, tea lights, plastic flowers, etc.) to charity shops. If your wedding venue is classified as a historical landmark (e.g., a national park) and if you pay a ceremony fee to a church (or any other registered religious institution like a mosque or synagogue), these fees are considered donations and are also tax-deductible.
Other tax breaks from the IRS are even more niche. Back in the 1960s, the parents of a child filed clarinet lessons as a medical expense because an orthodontist had prescribed it to correct the child's buck teeth. Since then, music lessons for medical and special needs are tax-deductible. This includes music lessons for a child with a learning or developmental disability.
The state laws of individual US states have their own “strange” tax breaks. When you move somewhere in the US, make sure to check its state tax laws because you might benefit from some unexpected deductions. In Hawaii, for instance, efforts at reforestation give residents who have an “exceptional tree” on their property a deduction of US$3,000 on state income tax every 3 years. It must be a tree which is very old or rare. If you're an expat who rents a property that has such a tree, lucky you, you're in for a generous tax break!
South Carolina is a state where hunting is popular. According to the state's law, anyone who works with meat (hunters, butchers, meat-packers, etc.) is entitled to a tax break of US$75/carcass for donating deer meat to charities that distribute food to the needy. If you're an expat who gets married in the same state, you are also entitled to a US$50 tax deduction – as long as you complete a premarital counseling course within the first year of your marriage.
Artists can be exempted from income tax in Ireland
Good news for expat writers or painters moving to Ireland! The country has an Artist's Exemption for income tax earned from the sale of original books, plays, paintings, musical compositions, sculptures, paintings and photos in the country. A maximum of €50,000 can be exempted. Even if your artistic practice is a side hustle rather than your main breadwinning job, you can still benefit from this tax exemption as long as you make any income from it.
The criteria for tax-deductible works is that they need to be original and creative as well as have cultural and/or artistic merit. This disqualifies textbooks, adaptations, works created for utilitarian goals like advertising or political communication, and non-fiction books that are journalistic rather than creative. Biographies, art history, literary criticism and literary translation are eligible as forms of creative non-fiction.
