Canada’s corporate tax rate competitive globally: KPMG

Corporate tax rates fell globally in 2012, and Canada’s corporate tax rate remained competitive by falling faster than other countries’ rates during the year, according ...

Corporate tax rates fell globally in 2012, and Canada’s corporate tax rate remained competitive by falling faster than other countries’ rates during the year, according to a KPMG study released this morning. 

The Global Corporate and Indirect Tax survey examined tax rates affecting business, and found that in most regions of the world, rates fell by less than 1% in 2012. Canada’s tax rate fell by 2% from 28% in 2011 to 26% in 2012.

The survey looked at corporate and indirect tax rates in over 125 countries, and found that other regions’ tax rates include:

  • the U.S.: 40%;
  • the U.K.: 24%; and
  • the European Region average: 20.5%.

These rates are not the only consideration, however.

“General corporate income tax rates are important, but they are only one factor in comparing country-to-country tax burdens,” said Canadian managing partner, tax, for KPMG in Canada. “Sales tax, property tax, capital tax and other local business taxes are all considerations.

“International companies should analyze all of these costs carefully and how they interact.”

The survey also looked at value-added indirect taxes such as GST or VAT in 111 regions in the world. The results showed that while corporate tax rates declined worldwide, GST and VAT has increased on average by 15.5% in 2012, with this trend expected to continue in 2013.

Canada has not raised its federal GST rate in 2012.

Tax rates from around the world can be viewed here.

ecrawford@biv.com

@EmmaCrawfordBIV

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