Taxes paid by corporations can be measured in a number of ways, including the marginal corporate tax rate and the total taxes paid as a percentage of profits.
The highest marginal corporate tax rate, which we consider here, is simply the highest tax rate shown on a country’s schedule of corporate taxes.
The highest marginal tax rates in 2015 were found in the United Arab Emirates—at 55%; the United States – at 40%; Argentina, Malta, Sudan and Zambia tied—with a 35% tax rate; Angola, Argentina, Malta, Sudan and Zambia—all tied at 35%. In the United States, the corporate tax rate continues to be the subject to much debate. Many politicians in Congress demand a reform of the tax code that will lower it, in exchange for the elimination of a number of exemptions and loopholes. For the time being, political stalemate in Washington has made comprehensive tax reform hard to achieve, but the pressure is building on Congress. In fact, many US-based corporations are considering, or proceeding with, the acquisition of foreign competitors explicitly with the intent of moving their headquarters, and therefore their tax residence, abroad, and therefore pay lower rates (so-called process of “tax inversion”).
The lowest corporate tax rates of the year were seen, unsurprisingly, in those countries known as offshore corporate tax havens—including the Cayman Islands, Bermuda and The Bahamas. They all had a top marginal corporate tax rate of 0%—along with Bahrain.
In the European Union, the lowest corporate tax rates were to be found in Bulgaria (10%,) Ireland (12.5%,) Latvia and Lithuania (15%,) and Romania (16%.) The highest is Belgium’s, at nearly 34%.
In the last decade or so, there has been a big shift in marginal tax rates. Most countries dropped their highest corporate rate over that period, among others: Germany, which went from 52.3% in 1999 to 29.5% in 2012; Iran, which went from 54% in 1999 to 25% in 2009 (the latest data available); Kuwait, which went from 55% down to 15%; Canada, down to 26.5% in 2014 from 36% in 2007; Colombia, which went from 33% in 2012 to 25% in 2014; and Japan, which lowered its top bracket from nearly 41% in 2011 to 35.6% this year.
Overall, KPMG’s analysis is that “corporate tax rates in many countries have stabilized after a decade of decline”. In a context of lower corporate tax rates, however, “tax authorities in the vast majority of developed countries are facing pressure to increase revenues from their tax base with fewer resources,” states the latest KPMG International, Corporate and Indirect Tax Survey. “This has led to tax authorities pursuing more tax audits and investigations leading to larger adjustments, with more potential for penalties and interest.” Additionally, authorities from the EU, the OECD and the G20 are looking for more stringent cooperation among their members in order to increase transparency and make revenue collection more effective.
Sorted from 2015 Tax Rates Column.
Data is from KPMG International, Corporate and Indirect Tax Survey 2015.
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