📅 2026 Update: How Income Tax Laws Around the World Changed

This section was added in October 2026. Two of the countries covered below, the United States and India, rewrote major parts of their income tax law since this article was published. A global deal on corporate tax also shifted. The original article follows below, unchanged.

🇺🇸 United States: the 2025 tax law

The United States still taxes income under the Internal Revenue Code. In July 2025 Congress passed the One, Big, Beautiful Bill Act (Public Law 119-21).

  • 📈 It made the seven individual rates permanent: 10% to 37%.
  • 🧾 It raised the standard deduction to $15,750 for single filers for 2025.
  • 🆕 It added temporary deductions for tips, overtime, car loan interest, and seniors for 2025 through 2028.

🇮🇳 India: a brand-new Income-tax Act

India replaced its Income-tax Act of 1961. The Income-tax Act, 2025 took effect on April 1, 2026.

The biggest everyday change is the word "year." The old law used both "previous year" and "assessment year," which confused many filers. The new law uses one term: tax year. Income earned from April 1, 2026 to March 31, 2027 is Tax Year 2026-27.

Returns for income earned before April 1, 2026 are still handled under the 1961 Act.

🇮🇳 India's current slabs

India's Budget 2026 kept the new-regime slabs set in 2025:

  • Up to ₹4 lakh: nil
  • ₹4–8 lakh: 5%
  • ₹8–12 lakh: 10%
  • ₹12–16 lakh: 15%
  • ₹16–20 lakh: 20%
  • ₹20–24 lakh: 25%
  • Above ₹24 lakh: 30%

With the rebate and standard deduction, salaried people earning up to about ₹12.75 lakh owe no income tax under the new regime.

🌐 The global minimum tax: a side-by-side deal

Around 140 countries agreed in 2021 to a 15 percent global minimum tax on large companies, known as Pillar Two. In January 2026, the OECD group released a "Side-by-Side" package.

Under it, large groups headquartered in a country with a qualifying system, currently the United States, are exempt from two of Pillar Two's main collection rules abroad. Other countries can still apply their own domestic minimum taxes. This affects large multinationals, not individual filers.

✈️ Americans abroad: 2026 numbers

The United States taxes its citizens on worldwide income, wherever they live. The foreign earned income exclusion lets qualifying people exclude some foreign wages:

  • $130,000 for tax year 2025
  • $132,900 for tax year 2026

To qualify, you generally need a foreign tax home and must pass either the bona fide residence test or be physically abroad for 330 full days in a 12-month period. You still must file a return to claim it.

📌 Key Points at a Glance

  • 🌍 The U.S. taxes citizens on worldwide income, wherever they live.
  • 💵 The foreign earned income exclusion is $130,000 for 2025 and $132,900 for 2026.
  • 🤝 Tax treaties and foreign tax credits help prevent double tax.
  • 🏦 Foreign accounts may need to be reported, even if no tax is due.

💡 Practical Tips if You Earn Income in More Than One Country

These tips are general information, not legal or tax advice. Cross-border tax is complex. A professional who handles international returns can review your facts.

🧭 Find out where you are a tax resident

Each country has its own residency test. Some count days. Some look at where your home and family are. You can be a resident of two countries at once.

🤝 Check for a tax treaty

Many countries have tax treaties with each other. A treaty can decide which country taxes a type of income first. It can also lower tax on things like pensions or dividends.

🔁 Avoid paying twice

If you pay tax abroad, you may claim a foreign tax credit on your U.S. return. You usually choose between that credit and the foreign earned income exclusion for the same income. The better choice depends on the foreign tax rate.

🏦 Report foreign bank accounts

U.S. persons with more than $10,000 total in foreign accounts at any time in the year must file an FBAR with FinCEN. Many also need Form 8938. Penalties for missing these forms can be large.

🗓️ Know both calendars

The U.S. tax year runs January to December. India's runs April to March. The UK's runs April 6 to April 5. Australia's runs July to June. Keep records that can be split by each calendar.

💱 Track exchange rates

You report foreign income in U.S. dollars. The IRS publishes yearly average exchange rates. Use one consistent method each year.

🏆 Expat and Cross-Border Tax Services, Ranked by User Reviews (2026)

The list below ranks services that prepare U.S. returns for people living or earning abroad. Rankings use public Trustpilot data checked in October 2026. Scores change over time.

This is not a recommendation. Some of these companies invite customers to post reviews, which can raise scores. Read each note.

🥇 1. MyExpatTaxes

MyExpatTaxes has been rated 4.7 out of 5 on Trustpilot across roughly 5,600 reviews. That is the largest review base among the expat-focused services checked.

It has been known as do-it-yourself software built for expats, with an option to have a tax professional review or prepare the return. Some reviewers mention slow replies during busy periods.

🥈 2. Taxes for Expats

Taxes for Expats has been rated 4.8 out of 5 on Trustpilot across roughly 2,800 reviews.

It has been known for an assigned accountant who prepares the return from an online questionnaire. Some reviewers mention delayed email replies.

🥉 3. Greenback Expat Tax Services

Greenback has been rated 4.8 out of 5 on Trustpilot across roughly 1,700 reviews. Trustpilot notes the company has not invited reviews recently.

It has been known for CPA-prepared returns, with pricing listed per form. That includes forms for foreign-owned U.S. companies. Some reviewers mention work pushed close to deadlines.

4. Bright!Tax

Bright!Tax has been rated 4.7 out of 5 on Trustpilot across about 700 reviews.

It focuses only on U.S. expat taxes and has been known for early access to a CPA. Some reviewers wanted more personal advice.

5. H&R Block Expat

H&R Block's expat service has been rated about 1.4 out of 5 on Trustpilot across a small sample of roughly 80 reviews. It sits last on this list for that reason. Its strength is brand reach and a large support network.

💸 Moving money between countries: Wise

Wise has been rated 4.3 out of 5 on Trustpilot across more than 300,000 reviews. It is not a tax service. It has been known for low-fee international transfers and multi-currency accounts, which many expats use to pay foreign tax bills or move refunds.

🔎 How to Compare Expat Tax Services

  • 🌍 Country experience. Ask if the firm regularly handles returns for people in your country.
  • 📄 Forms included. FBAR (FinCEN 114), Form 8938, Form 2555, and Form 1116 should be covered. Ask what costs extra.
  • 🧑‍💼 Who prepares it. Look for CPAs or enrolled agents.
  • 🔄 Catch-up help. If you missed years, ask about the IRS Streamlined Filing Compliance Procedures.
  • 💲 Flat fee or hourly. Get the price in writing.

⚠️ Red Flags

  • 🚩 A preparer who does not ask about foreign bank accounts.
  • 🚩 Advice to skip U.S. filing because you pay tax abroad.
  • 🚩 No clear answer on whether state returns are needed.

❓ Frequently Asked Questions

Do U.S. citizens living abroad have to file?

Yes, if their income is above the filing threshold. The United States taxes citizens on worldwide income. Exclusions and credits often reduce or remove the tax owed, but the return is still required.

What is the foreign earned income exclusion for 2026?

$132,900 per qualifying person. For 2025 it is $130,000.

When did India's new tax law start?

The Income-tax Act, 2025 took effect April 1, 2026. Income earned before that date is still assessed under the 1961 Act.

Does the global minimum tax affect my personal taxes?

No. Pillar Two applies to large multinational groups, generally those with revenue of 750 million euros or more.

What is an FBAR?

A report of foreign bank and financial accounts. U.S. persons file it with FinCEN if their foreign accounts total more than $10,000 at any time in the year.

Do I need to file a U.S. return if I live abroad?

Usually yes. U.S. citizens and green card holders must generally file if their income is above the filing threshold, wherever they live.

What is an FBAR?

A report of foreign financial accounts. It is generally required if your foreign accounts together topped $10,000 at any time during the year.

Where can I get free tax help?

IRS Free File, VITA, and TCE offer free help for many people. The Taxpayer Advocate Service helps for free when an IRS problem causes hardship.

ℹ️ Disclosure

LAWS.com may receive compensation when readers use links to some of the services listed on this page. Compensation does not affect the order of the list above. Rankings are based on public user review data as of the date shown. This article is general information and is not legal, tax, or financial advice.

End of October 2026 Update





Different Income Tax Acts Across the World: A Comparative Review


Income taxes, also known as personal income taxes, are one of the most common forms of taxation across the world. Every country has its own set of income tax laws and regulations that taxpayers must abide by. In this article, we will explore some of the different income tax acts from around the world.

The United States - Internal Revenue Code


In the United States, the Internal Revenue Code is the federal tax law that governs personal income tax. This code is extensive, containing over 3 million words. The law defines different types of income, deductions, exemptions, and tax credits. The system is progressive, meaning that those who earn more pay a higher percentage of their income in taxes.

India - Income Tax Act


The Income Tax Act is the main income tax act in India. The act was first introduced in 1961 and has been amended several times since then. The act covers various aspects of the income tax system, including definitions of taxable income, exemptions, deductions, and collection and recovery of tax.

United Kingdom - Income Tax Acts


In the UK, there are several income tax acts that govern personal income tax. These include the Income Tax (Trading and Other Income) Act, the Income Tax (Earnings and Pensions) Act, and the Income Tax Act. These acts cover a range of topics, including taxable income, deductions, exemptions, and tax rates.

Canada - Income Tax Act


The Canadian Income Tax Act is the federal law that governs personal income tax in Canada. The act was first introduced in 1917 and has undergone numerous amendments since then. The act defines taxable income, deductions, exemptions, and collection and recovery of tax.

Australia - Income Tax Assessment Acts


In Australia, there are two income tax acts that govern personal income tax. These are the Income Tax Assessment Act 1936 and the Income Tax Assessment Act 1997. These acts cover a wide range of topics, including definitions of taxable income, deductions, exemptions, and tax rates.

Conclusion


While income taxes are a widely-adopted form of taxation, the specific laws and regulations governing them vary greatly from country to country. The United States, India, the United Kingdom, Canada, and Australia each have their own set of income tax acts that taxpayers must abide by. Understanding the specific laws and regulations of the country in which you are earning income is important for complying with tax laws and regulations.

What is the Income Tax Act?


The United States government, since its formation, has levied taxes on personal and corporate income to help fund public projects and programs such as the military, the construction of public roads and bridges, as well as to help fund government programs such as social security. The taxation model was developed through numerous pieces of legislation, that each aimed to establish an equitable and progressive system to supply tax rates based off an individual’s income.

The income tax is a progressive model and was originally developed through the Income Tax act of 1798. The Income Tax Act of 1798 was a British law, which was applied to United State citizens in the form of a progressive model. The original Income Tax Act instituted tax rates of 0.08% on income above 60 pounds and 10% on income above 200 pounds annually.

This tax proposal was later affirmed in 1814, where it was regarded as the foundation for the equitable and modernized taxable system in the United States of America. Although the tax was never imposed on the United States (following the treaty of Ghent) the income Tax Act of 1798 established the framework for the present-day progressive income tax system.

The Income Tax Act that fortified the taxation system of modern America was established in the passing of the 16th Amendment. This particular amendment awarded taxation power to the governing bodies of the United States. That being said, the tax laws of the Federal government and the coordinating state and local governments are enshrouded in complexities and ever-changing regulations.

Different Income Tax Acts Across the World

As a result of these conundrums, numerous Income Tax Acts or pieces of legislation are seemingly passed every presidency that further establish and outline the tax brackets, the corresponding tax rates, and the compliance or regulatory issues that go into the taxation model. Typically an Income Tax Act will be established based on the macro-economic needs of the taxing authority or country.

For instance, if the gap between the top 1% and the middle class in America is continuously widening, a President may institute an Income Tax Act to effectively lower the tax rates of the middle earners of the country while raising the tax rates of the highest bracket. Regardless of the initiative, an income Tax Act will effectively alter the way in which the country imposes the income tax on its citizens.