The countries with the highest and lowest corporate taxation in the world

The finance ministers of the Group of Seven (G-7) advanced nations have agreed to support a minimum global corporate tax rate of 15% minimum.

US Treasury Secretary Janet Yellen said such a global low would end “competition in corporate taxation” and “ensure justice for the middle class and workers in the United States and around the world.”

Governments in big economies have been facing for years the tax burden of big companies, such as tech giants like Facebook and Google.

It is a common practice among many multinational corporations to declare income – such as that derived from intangible sources, e.g. software and patents – in low tax areas no matter where the sales are made. This allows companies to avoid paying higher taxes in their countries of origin.

The G-7 deal fuels a wider global effort to update tax rules around the world and will be discussed further at the upcoming meeting of the group of 20 (G-20) richest countries in the world next month.

The Organization for Economic Co-operation and Development (OECD) has facilitated global tax negotiations in recent years. A global minimum tax rate is expected to account for most of the $ 50 billion to $ 80 billion in additional taxes companies will end up paying, according to Reuters.

Higher and lower corporate tax rates

Overall, countries in Africa and South America charge higher corporate tax rates than many countries in Europe and Asia, according to think tanks from the Washington-based think tank, the Tax Foundation, the OECD and KPMG.

About 15 countries do not impose a general corporate income tax, according to the data. This includes island states such as Bermuda, the Cayman Islands and the British Virgin Islands, commonly known as offshore “tax havens” – to which large companies transfer their profits in order to pay lower taxes.

These countries, in turn, benefit from jobs created to serve multinational corporations, such as legal and accounting services. Tax havens also earn money from fees paid by large companies to set up subsidiaries in these areas.

Daniel Ban, vice president of global projects for the Tax Foundation, told CNBC that many unanswered questions remain about how this minimum tax rate will be applied and what parts of corporate income will be taxed. He added meaningfully that tax havens may not disappear completely…

Ten countries with zero income tax

In these countries, workers and entrepreneurs pay nothing in taxes.

Looking at the list of countries that do not tax their citizens and workers at all, one sees that they belong to only two categories: the 7 are Islamic monarchies with oil. The other three are former or present British colonies and tax havens.

In the first category, the people have everything for free and in return they never ask for elections. In the second he lives his life on the beaches of the Caribbean, since the state never bothers him – he is busy keeping offshore registers.

Most, but not all, have a correspondingly low corporate tax rate.

Note: the GDP of each country is in PPP and the per capita GDP according to the IMF.

1. Qatar

Inhabitants: 1.9 million
GDP: $ 182 billion
Per capita: $ 102,000 (1st in the world)

The richest country in the world in per capita GDP relies on its wealth in gas. It does not tax its residents – 14% are millionaires – but hydrocarbon companies pay up to 35%.

There is no tax on dividends, profits, goodwill and property. Employees pay 5% for insurance, unemployment is at 0.1% and manual labor is done almost exclusively (94%) by foreigners.

2. Bermuda shorts

Inhabitants: 64,000
GDP: $ 5.8 billion
Per capita: $ 86,000 (3rd in the world according to the CIA World Factbook)

The 0% income tax is the only good this country has. The employee has 7% deductions from his employer, $ 120 a month for social security, real estate tax up to 19% and inheritance tax 5-20%, while both the roof and the imported goods are very expensive.

However, zero corporate tax makes it extremely popular, more than 400 insurance companies are listed on its stock exchange, and the country’s most famous “customer” is Google , which saved more than $ 2 billion in taxes in 2011 using the local ” branch “of.

3. Brunei

Inhabitants: 410,000
GDP: $ 21 billion
Per capita income: $ 54,300 (5th in the world)

The small country in the Indian Ocean “sits” entirely on an oil field and 90% of its exports (and 50% of GDP) are based on hydrocarbons. It is the 5th richest country in the world and has no debt at all.

And because all this belongs to the monarch, the Sultan who rules it was in 1997 the richest man in the world, until his prodigal brother spent all the billions of the family. Somehow the residents acquired the obligation to contribute to the insurance funds.

4. United Arab Emirates

Inhabitants: 8.2 million
GDP: $ 271 billion
Per capita: $ 49,000 (7th in the world)

Oil companies love the Emirates so much that they agree to do business with them, despite the tax of up to 55% imposed on their profits. From this tax, from the 20% tax on banks and from the exports of hydrocarbons – the country has the 7th largest reserves in the world – the country collects enough, so as not to bother its citizens with income declarations and settlements.

However, it imposes a tax on real estate, city taxes and tolls, while alcohol is subject to duties of up to 80%.

5. Cayman Islands

Inhabitants: 57,000
GDP: $ 3.2 billion
Per capita: $ 43,800 (10th in the world according to the CIA World Factbook)

Zero income tax on individuals and companies, zero capital gains tax, zero VAT, zero real estate tax, optional insurance contributions. With government revenue coming mainly from tariffs on goods (5-25%), the crisis has prompted it to consider imposing a tax on foreigners’ incomes.

He counted them, found that they were 50% of the labor force and almost all employees of foreign companies with high salaries, saw that he was in danger of losing them and left the plans in the drawer.

6. Kuwait

Inhabitants: 2.8 million
GDP: $ 163 billion
Per capita: $ 39,800 (16th in the world)

90% of its exports are oil and 93% of its employees work in the public sector – in services or state-owned companies. Income is not taxed, but 7.5% of it goes to insurance contributions. 

7. Bahamas

Inhabitants: 353,000
GDP: $ 11 billion
Per capita: $ 31,400 (28th in the world)

70% of government revenue consists of duties and taxes on trade and the rest from tourism and financial services.

Income is not taxed, insurance contributions are only 3.9% and real estate tax from 0-1%. There is no corporate tax, no capital gains tax or VAT in the country.

8. Saudi Arabia

Inhabitants: 30 million
GDP: $ 900 billion
Per capita income: $ 31,200 (29th in the world)

The world’s largest oil exporter (and second largest producer behind Russia) does not tax its residents’ income at all, but imposes a 20% tax on self-employed foreigners and a 20% capital gains tax.

9. Oman

Inhabitants: 3.8 million
GDP: $ 90 billion
Per capita: $ 29,100 (33rd in the world)

Oil is running out and the government is looking for a solution since 70% of its revenue comes from it. Citizens do not pay any taxes except 3% on real estate sales and 6.5% insurance contributions.

10. Bahrain

Inhabitants: 1.2 million
GDP: $ 31 billion
Per capita: $ 28,700 (34th in the world)

Eighty-eight percent of the country’s revenue comes from oil, but its budget is in deficit due to the high subsidies and benefits it provides to its citizens, so as not to follow the path set by the Egyptians, Libyans and other Arab brothers.

Citizens are not taxed on income, but contribute 7% to social security (1% foreigners) and pay real estate tax, while foreigners pay 10% city tax on their rent.

However, things are getting darker for everyone as it has already been confirmed that its oil will run out within a decade.

Sources: https://www.ot.gr/ & https://www.fortunegreece.com/

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