Vancouver has placed first for lowest business taxes among 41 cities around the world, according to a KPMG LLP report released today.
“I don’t think it was a surprise,” Walter Pela, partner-in-charge of tax at KPMG’s Vancouver office, told BIV in an interview this morning. “We were anticipating that Vancouver would improve in its ranking, and that was because of our overall change in our income tax both federally and provincially, and the switch to HST.”
The audit and tax firm ranked 41 major international cities with populations greater than two million and uses a total tax index score expressed as a percentage of the total amount of taxes companies paid in the U.S.
The burden included income tax, capital tax, sales tax, property tax, local business taxes and labour costs. A lower score is better because it means fewer tax costs for businesses.
Vancouver jumped from a fourth place ranking in 2008, while Montreal and Toronto placed fourth and fifth respectively. The second and third ranking cities are in Mexico.
The report also compares taxes between certain industries and found that Vancouver topped the chart for the corporate and IT service industries, which include video game developers, regional offices and international financial and logistics firms.
Pela said Canada is in better shape than other jurisdictions around the world and that suggests Vancouver could sustain its competitive tax advantage. He said the city is quickly becoming a place for companies to set up shop.
“We're seeing global mining companies headquarter in Vancouver to take advantage of both the tax climate and the favourable capital mining activity in the sector, and we wouldn’t have seen that 10 or 20 years ago.”