Corporate tax burden more than three times greater in highest versus lowest taxed major economies.
Research by UHY, a Top 25 global accounting and consultancy network.
Huge disparities now exist between countries on the amount of tax they take from businesses, according to UHY, the international accounting and consultancy network.
The tax burden on business profits can be more than three times greater in the highest versus the lowest taxed major countries – highlighting just how wide the tax gap is between ‘low tax’ emerging economies and the majority of ‘high tax’ developed nations.
For example in some circumstances businesses in highly taxed Japan pay over three times as much tax as those in lowly taxed Ireland on similar earnings.
According to UHY tax professionals, many countries have been reducing their corporate tax rates in a bid to become more competitive and attract highly mobile multinational businesses. The research highlights the need for some countries to work harder to become more attractive to businesses, which are increasingly mobile and are less constrained by geography than at any time in history.
There are also a number of increasingly important economies, such as Dubai (UAE), that do not charge any corporate tax.
In its review UHY studied tax data in 21 countries across its international network, including all members of the G8, as well as key emerging economies.
The survey found the following countries to be amongst the highest tax paying countries (highest corporate tax rate) Japan (42%), USA (35%), Brazil (34%), France (34%) and Germany (32%) excluding Dubai and Estonia where corporate tax rates of 0% apply, low tax paying countries include (lowest corporate tax rate) Ireland (12.5%), Romania (16%) and Russia (20%) the survey also revealed that the highest corporate tax rate in the UK is 26%.
The full results of the UHY study into corporate tax rates can be found on our website www.uhyhn.co.nz.