Bulgaria, with a 10% flat rate introduced last year, still has the lowest personal tax rate among European Union member states, shows a survey of consultancy and audit company KPMG International.

Bulgaria also has the lowest social security rates, which coupled with a 10% flat rate, makes it very attractive for physical entities, employers and potential investors, KPMG comment.

According to KPMG's 2009 Individual income tax and social security rate survey, which compares 86 countries, the top average personal income tax rate dropped 0.3% worldwide in 2009 to 28.9% from 29.2% in 2008.

The highest personal income taxes in the world are still paid by the citizens of the European Union (EU), the survey shows.

But with the introduction of flat rate taxes in a number of Eastern European countries - including Latvia and Poland, which reduced their top rates to 23% and 32% respectively for 2009 - average rates have fallen from 41.1% in 2003 to 36% in 2009.

Denmark - when looking at social security and the personal income tax rate together - has the highest personal income tax rate at 62.3% . In the Asia-Pacific region, Japan has the top rate at 50%. Chile has the highest rate in the Latin American region at 40%.

When taking both the personal income tax rate and social security rates into account for employees earning USD 100,000, the countries with the highest rates were Slovenia (54.9%), Croatia (53.5%) and Hungary (48.1%).

For employees earning USD 300,000, the countries with the highest rates were Slovenia (60.4%), Denmark (57.1%) and Croatia (54.5%).