For the third year in a row, Canada ranks in the top 10 globally when it comes to ease of paying business taxes, according to a joint PwC and World Bank Group study released November 19.
Canada comes in eighth place globally and in first place in North America. The study ranked 189 countries on criteria that considered how easy it is for small to medium-sized businesses to file and pay their taxes. The criteria were:
- the number of tax payments per year;
- the amount of time needed to compile and file returns; and
- by calculating companies’ total tax liability as a percentage of pre-tax profits.
“Within North America, Canada maintains the lowest average total tax rate ranking largely due to its efforts to establish a tax-competitive and business-friendly environment,” said Brad Sakich, PwC’s Canadian tax policy leader.
“Privately owned small businesses in Canada should take comfort - the ranking demonstrates that Canadian government agencies support and encourage the creation of more such businesses.”
Canada’s favourable ranking was influenced by several positive factors in the country’s tax system, including a reduction in the corporate tax rate on the first $500,000 of annual profits, which has decreased significantly since 2001. As well, the study states that Canada has made efforts to simplify electronic filing.
The top 10 countries, in order, are:
- United Arab Emirates;
- Qatar;
- Saudi Arabia;
- Hong Kong SAR, China;
- Singapore;
- Ireland;
- Bahrain;
- Canada;
- Oman; and
- Kiribati.
The United States ranked 64th.
The study was not broken down to the provincial level. The full report is not available online, but more details about Canada’s ranking can be found here.
