Tax Changes 2026: The Best Countries for Expats Right Now
Key Takeaways
- Bulgaria's 10% flat rate survives Pillar Two — the 15% minimum only hits companies over €750 million in revenue
- Cyprus raised its corporate tax to 15% but non-dom exemptions on dividends remain fully intact
- Paraguay's new Investor Pass grants permanent residency for $150K–$200K — with zero tax on foreign income
- Uruguay's territorial era is ending — new residents now have an 11-year exemption countdown before worldwide taxation kicks in
- Andorra's passive residency threshold doubled from €600K to €1M in 2026; the €50K deposit is now non-refundable
A €100,000 freelancer in Spain pays roughly €42,000 in combined taxes and social contributions. The same freelancer, resident in Bulgaria, pays €10,000. The gap is legal, stable, and available to anyone willing to relocate.
2026 widened that gap in some jurisdictions and narrowed it in others. Here's what changed — and where the real opportunities now sit.
The Winners of 2026
Bulgaria — Still the EU's Best-Kept Secret
Bulgaria's flat 10% corporate and personal income tax survives 2026 unchanged. Despite pressure from the OECD's Pillar Two rules, only companies exceeding €750 million in consolidated annual revenue face the 15% global minimum. For anyone running an SME or freelancing? Still 10%.
Dividend distributions for residents remain at 5% — a proposal to raise them to 10% was withdrawn after public pushback. The country adopted the euro on January 1, 2026, making banking and transactions smoother than ever.
Best for: SME owners, freelancers, developers, and entrepreneurs who want EU access at flat-tax prices.
Romania — Microenterprise Still Works (with Caveats)
Romania's microenterprise regime simplifies to a single 1% turnover tax in 2026. The catch: the revenue threshold drops to €100,000 and you now need at least one employee. For entrepreneurs running lean operations, this is still one of the lowest effective rates in the EU.
Best for: Early-stage entrepreneurs willing to meet employment requirements.
Cyprus — Non-Dom Still Reigns
Cyprus raised its corporate rate to 15% to comply with OECD rules, but the real prize for non-dom residents remains untouched: full exemption on dividends and interest. Crypto gains now face a flat 8% — actually a clarity improvement over previous ambiguity. The personal income tax minimum exemption rises to €22,000.
Best for: Investors, dividend recipients, and crypto holders who want a European passport pathway.
Paraguay — The New Value Proposition
Paraguay's "Investor Pass" grants permanent residency via a $150,000 tourism investment or $200,000 in stocks or real estate. The territorial tax system means foreign income remains entirely untaxed regardless of how long you stay.
The new crypto reporting requirement (transactions over $5,000 annually) signals maturity rather than risk — Paraguay is legitimising, not restricting.
Best for: Remote workers and entrepreneurs seeking low-cost permanent residency with genuine tax freedom.
El Salvador — Clarified and Committed
El Salvador's 2024 territorial taxation reform is now firmly established: foreign-source income is explicitly excluded from taxation. The 2026 migration reform eases continuous residency requirements to 90 cumulative days annually, making it easy to combine with time elsewhere.
Best for: Digital entrepreneurs who want flexibility and legal certainty on foreign income.
Warnings: Where Things Got Worse
Uruguay — Territorial Era Ending
Uruguay's shift to worldwide income taxation is the biggest negative change of 2026. New residents still get an 11-year exemption, but the clock is now ticking. Foreign rental income and capital gains become taxable after the exemption period. If you're planning a move to Uruguay, front-load your decision — every year you wait is a year off your exemption window.
Andorra — Harder to Access
Passive residency investment requirements jump from €600,000 to €1,000,000. The €50,000 deposit to tax authorities is now permanent (no longer recoverable). Annual quotas are creating processing delays. Andorra remains excellent once you're in, but the entry cost has materially increased.
Netherlands Box 3 — A 2028 Warning
Not a 2026 change, but worth flagging: the Netherlands is moving toward taxing unrealised investment gains under Box 3, effective 2028. If you hold illiquid assets and Dutch residency, now is the time to plan your exit.
What This Means for You
The best moves in 2026 are predictable applications of stable rules:
- EU access + low taxes: Bulgaria or Cyprus
- Maximum simplicity: Paraguay or El Salvador
- Asia-Pacific lifestyle: Australia's temporary resident strategy
- European sophistication: Malta's dual system or Portugal's IFICI for qualifying workers
The window for acting on some of these is narrowing. The best time to act was last year. The second best time is now.
Explore on Paraisolist
Every jurisdiction mentioned in this article has a dedicated profile on Paraisolist with current tax rates, residency requirements, quality-of-life scores, and verified local advisors.
Browse all jurisdictions → · Compare two countries → · Find the right fit for your profile →
