US Study Compares Worldwide Corporate Tax Rates 

Corporate_taxes

The Tax Foundation (TF) has issued a paper which shows how the United States corporate income tax rate, now the highest among the 34 industrialized nations of the Organization for Economic Cooperation and Development (OECD), ranks against all of the countries and other tax jurisdictions throughout the world.

It shows that amongst 163 countries worldwide, the US has the third highest top marginal corporate income tax rate in the world at 39.1 percent (consisting of the federal tax rate of 35 percent plus the average tax rate among the states), exceeded only by Chad (40 percent) and the United Arab Emirates (55 percent). The US rate is marginally above the 38.5 percent imposed in Cameroon.

It is noted that 35 countries have corporate income tax rates between 25 percent and 30 percent, while 34 countries have tax rates between 30 percent and 35 percent. The US is one of only 15 countries in the world that has a corporate tax rate over 35 percent. At the lower end, 49 countries have corporate tax rates below 20 percent and 10 countries have rates below 5 percent.

The TF also finds that the US tax rate is currently 16.5 percent higher than the worldwide average of 22.6 percent. However, as with the average tax rate among industrialized nations, the average worldwide tax rate has been declining over the past ten years, from a worldwide average of around 29.5 percent in 2004, pushing the US farther from the norm.

In addition, every OECD country, except the US, Chile and Hungary, has lowered its corporate tax rate since 2000.

Although it is apparent that larger, more industrialized countries tend to have higher corporate income tax rates than developing countries, Europe still has the lowest average corporate tax rate by region at 18.6 percent, while Africa has the highest average tax rate at 29.1 percent.

The TF concludes that “the corporate income tax rate is one of many aspects of what makes a country’s tax code and economy attractive for investment. However, as the rest of the world’s economies mature and their tax rates on corporate income continue to decline, the US risks losing its competitive edge due to its exceptionally high corporate income tax rate.”

 

Source: tax-news

Leave a Comment


Broker Cyprus TopFX