Tax Policy & Controversy Briefing
Corporate income tax (CIT) rates
Largest 50 “economies” or “jurisdictions” by GDP, sorted by tax rate
|Jurisdiction||GDP 2014 ($US billions)1||2014 CIT rate (national statutory rate only)||2014 CIT rate (national and sub-national, average)||Worldwide vs. territorial taxation||Notes|
The initially proposed 1% tax on EBITDA (earnings before interest, taxes, depreciation and amortization) is replaced by an increase of the temporary additional contribution to CIT from 5% to 10.7%, that applies to companies (or tax consolidated groups) with an annual turnover exceeding €250 million. The increase would apply to fiscal years (FYs) ending between 31 December 2013 and 30 December 2015. The maximum CIT rate would thus amount to circa 38% instead of the current 36.1%.
The government has repealed the 10% special corporate reconstruction surtax a year early. The effective corporate tax rate (Tokyo area, including local taxes) will be reduced from 38.01% to 35.64% for taxable years beginning on or after 1 April 2014.
Rate illustrated is applied to domestic companies, including surcharge and education CESS. Foreign companies pay tax of 43.26% including surcharge and education CESS.
|Mexico||1,163||30.00%||Worldwide||An additional 10% corporate income tax will be imposed on certain profits and dividends from 2014 onwards. Because the tax on dividends would be on the distributing company, there would be no tax treaty protection.|
Corporate tax rate is reduced from 28% to 27% with effect from 1 January 2014.
Increase in the standard CIT rate from 25% to 26.5% effective 1 January 2014.
|Canada||1,770||15.00%||26.23%||Territorial||Rate for the first 200,000 Euro taxable basis is 20%.|
Income from business activity acquired by entrepreneurs, private businesses and partnerships (OE) or limited partnerships (EE) with single-entry accounting books is subject to taxation at 26% for income up to €50,000 and at 33% for the portion of income exceeding €50,000. New private businesses and entrepreneurs (business start-up as from 1 January 2013) with income up to €10,000 are taxed at 13% for the first three years of operation. Corporate tax rate for corporations (AE), limited liability companies (EPE) and permanent establishments is increased to 26% (previously 20%).
|Netherlands||770||25.00%||Territorial||Rate for the first €200,000 taxable basis is 20%.|
|Islamic Republic of Iran||484||25.00%||Worldwide|
|Austria||391||25.00%||Territorial||Increase in the standard corporate income tax rate, from 25% to 26.5% effective 1 January 2014|
Reduction of the CIT rate from 33% to 25% except for foreign taxpayers without a branch office or permanent establishment in Colombia. Those taxpayers will continue to be subjected to a 33% tax rate on income and capital gains of Colombian source.
24.2% top tax rate includes a 10% surcharge applicable to taxable income in excess of KRW20 billion (US$18 million). While headline tax rates are the same in 2013, large companies with taxable income exceeding KRW100 billion will see the minimum tax rate raised from the current 15.4% to 17.6%.
|Thailand||377||23.00%||Territorial||Thailand recently enacted a two-phased corporate tax rate reduction. Phase one reduction is from 30% to 23% and is effective for accounting periods beginning on or after 1 January 2012. Phase two reduces it down to 20% for accounting periods beginning on or after 1 January 2013 and 1 January 2014.|
|United Kingdom||2,434||21.00%||Territorial|| |
Mainstream rate of corporation tax will reduce to 21% in 2014 and be further reduced to 20% with effect from April 2015, the first time that the UK’s main rate and small profits rate have coincided since 1973.
The Finnish Government recently announced that the statutory CIT rate will be lowered to 20% as of 2014.
1 IMF World Economic Outlook Database, September 2012