Countries with highest and lowest corporate tax rates compared to Indiaamong others
Most companies and big companies know the corporate tax rate, but not all of them know the list of countries with high corporate tax rates, including USA, Switzerland, Ireland, Singapore and others.
One of the most underrated benefits of a global corporate tax strategy is the ability to optimize your global tax structure and reduce your tax liability when a taxable event occurs.
Although optimizing your business operations for the benefit of your business can take a lot of time and effort, having the right tax structure for your business and organization helps you achieve maximum tax advantage by including tax planning in your tax management approach.
However, according to the Tax Justice Network (TJN), at least 24 countries, including the United Kingdom (UK), Spain, Italy, Australia and South Korea, have seen their tax rates tax cuts since the start of 2018. And as one might expect, the average corporate tax rate in the developed market bloc of 28 countries fell from 22% in 2018 to 21% in 2019.
TJN calculates a list of 30 countries around the world that have a corporate tax rate below 15%, up from 43 at the start of 2018, with the highest corporate tax rate in the world reaching 30.7% in Netherlands.
Twenty countries changed their statutory corporate tax rates in 2021. Bangladesh, Argentina and Gibraltar increased their top tax rates, while 17 countries reduced their corporate tax rates, including the Chile, Tunisia and France.
Comoros (50%), Puerto Rico (37.5%) and Suriname (36%) have the highest corporate tax rates in the world, while Barbados (5.5%), Uzbekistan (7.5%) and Turkmenistan have the lowest rates (8%). ). There are fifteen jurisdictions that have no corporation tax.
The global average statutory corporate income tax rate is 23.54%, based on data from 180 countries. The average statutory rate is 25.44% when weighted by GDP.
Changes to corporate tax rates in 2021
In 2021, twenty nations changed their statutory corporate income tax rates. Bangladesh, Argentina and Gibraltar increased their top corporate tax rates from 25%, 30% and 10%, respectively, to 32.5%, 35% and 12.5%.
Sweden, Colombia, Switzerland, Monaco, Congo, Turkey, Indonesia, France, Gambia, Lao People’s Democratic Republic, Sri Lanka, Angola, Democratic Republic of Congo, Bhutan, Kiribati, Tunisia and Chile cut corporate tax rates in 2021 across five continents. Tax rate cuts have ranged from a fraction of a percentage point in Sweden to a drop of 15 percentage points in Chile.
Change of UAE CIT after Indian Budget 2022
According to a report by the new Financial Times, the UAE said it would levy a corporate tax rate of 9%. The announcement comes as India, another major Asian economy, unveiled its Union budget for 2022, which is expected to impact businesses in the United Arab Emirates.
Countries with the highest corporate tax rates
According to KPMG, the United Arab Emirates (UAE) had the highest corporate tax rate in the world, with a tax rate of up to 55% in 2019, which will be reduced to 9%. Brazil (34%), Venezuela (34%), France (31%) and Japan (30.62%) were the other countries at the top of the list.
The United Arab Emirates had a corporate tax rate of up to 55%, although its tax structure was unusual. Oil and gas companies, as well as subsidiaries of international banks, pay the highest tax rate. This is because the government splits tax brackets based on personal and corporate income at the federal level.
The updated list of countries with the highest tax rates are:
- Comoros (Africa) -50%
- Puerto Rico (North America) -37.5%
- Suriname (South America) -36%
- Argentina (South America) -35%
- Cuba (North America) -35%
- Equatorial Guinea (Africa)-35%
- Saint Martin (French part)North America-35%
- Sint Maarten (Dutch part)North America-35%
- American Samoa (Oceania)-34%
- Brazil (South America) -34%
- Venezuela (Bolivarian Republic of) South America -34%
- Saint Kitts and Nevis (North America) -33%
- Bangladesh (Asia) -32.5%
Low corporate tax rates
On the other hand, the 20 countries with the lowest non-zero statutory corporate tax rates all have rates of 12.5% or less. Ten countries have statutory rates of 10%, five of which are small European countries (Andorra, Bosnia and Herzegovina, Bulgaria, Kosovo and Macedonia). Chile, Hungary and Ireland are the only three OECD members in the bottom 20 countries. Due to the epidemic, Chile has temporarily reduced the statutory corporate tax rate for most companies. In 2017, Hungary lowered its corporate tax rate from 19% to 9%. The low rate of 12.5% in Ireland, in force since 2003, is well known.
Besides the largely Caribbean countries that have no corporate tax, many Eastern European countries have lower than average corporate tax rates, such as:
- Barbados (North America) -5.5%
- Uzbekistan (Asia) -.5%
- Montenegro (Europe) -9%
- Andorra (Europe)-10%
- Bosnia and Herzegovina (Europe) -10%
- Chile (South America) -10%
- Kosovo,(Republic of Europe)-10%
- Paraguay (South America) -10%
- The former Yugoslav Republic of Macedonia (Europe)-10%
- Timor-Leste (Oceania)-10%
- China, Macao Special Administrative Region (Asia) -12%
- Republic of Moldova (Europe)-12%
- Ireland (Europe) -12.5%
Notes: In response to the pandemic, Chile has reduced small business rates to 10% for a limited time. A 27% tariff applies to all other businesses.
Countries without general corporate tax, 2021
15 of the 225 countries surveyed have no general corporate income tax. All of these jurisdictions are tiny island states, with the exception of the United Arab Emirates. The Cayman Islands and Bermuda, for example, are well known for their lack of corporate tax.
- Anguilla (North America)
- Bahamas (North America)
- Bahrain (Asia)
- Bermuda (North America)
- British Virgin Islands (North America)
- Cayman Islands (North America)
- Guernsey (Europe)
- Isle of Man (Europe)
- Jersey (Europe)
- Saint Barthélemy (North America)
- Tokelau (Oceania)
- Turks and Caicos Islands (North America)
- United Arab Emirates (Asia)
- Vanuatu (Oceania)
- Wallis and Futuna Islands (Oceania
The Bahamas offers an extensive tax advantage as it does not tax profits, dividends or personal income. There are also no capital gains, inheritance, gift or unemployment taxes.
Business license fees and certain property taxes, as well as a value added tax, are part of the tax obligations that exist (VAT). There are several advantages for international and foreign investors in the Bahamas. Foreign investors are protected by a veil of secrecy.
The government also provides an easy-to-use framework for forming business formations that can benefit from the 0% corporate tax rate..
With a corporate tax rate of 0%, Bermuda and the Cayman Islands offer similar advantages when it comes to international and foreign investment.
The Bahamas, Bermuda and the Cayman Islands are three of the most popular offshore investment locations, attracting business owners from all over the world, especially from the United States.
According to our analysis, the global average corporate tax rate is 23.79%.
Comparison with India
According to TJN, some countries in the developed market bloc, such as the United States and Canada, have corporate tax rates around 35%. Despite the fact that India enacted a corporate tax overhaul in July 2019 which sparked protests and resulted in a political deadlock in the Indian parliament, TJN does not include India in its list of countries where corporate tax rates are lower.
Even after the imposition of the rate cut in July, the corporate tax rate in India has remained at 19% since 2016. According to the Economic Times, the corporate tax rate in India is “still the one of the highest in the world. The United Kingdom is in second place, with a new rate of 12%.
According to TJN, some countries, such as Italy, Ireland, France and Poland, are considering lowering their corporate tax rates in the future. According to TJN, the tax index was compiled using member countries of the Organization for Economic Co-operation and Development (OECD). According to the TJN website, the countries were chosen for their “excellent trading conditions”.
The Indian Tax Laws (Amendment) Act 2019 proclaimed a favorable corporate tax rate of 15% (with a surcharge of 10% and an appropriate tax of 4% for health and education) for newly established domestic manufacturing enterprises from tax year 2019/20. Domestic energy companies will be eligible for a 15% tax reduction from the 2020/21 financial year.
To provide a much-needed boost to the economy, a favorable corporate tax rate of 22% (with a 10% surcharge and an appropriate 4% tax for health and education) was announced in from tax year 2019/20..
Edited and published by Ashlyn Joy