KPMG Finds Best Tax Environment in World

September 26, 2012 International Tax Cooperation

Business TaxAMSTELVEEN – Businesses in India face the most competitive tax environment amongst the 15 most prominent countries in the world, and businesses in Italy struggle under the least competitive tax environment.

On September 25th KPMG released the latest edition of its annual Competitiveness Alternatives Special Report: Focus on Tax, examining the tax environment for businesses operating in the ten most developed countries of the world and the four BRIC countries.

In order to compare the overall impact of tax on businesses in each country, the report examined the total tax liabilities faced businesses operating across 19 separate industries, and benchmarked them against the total burdens faced by businesses in the USA.

Across all of the developed countries examined in the report, Canada had the most competitive tax environment, with businesses facing tax burdens which are 40.9 percent lower than in the USA.

Businesses operating in Mexico, the UK and the Netherlands also enjoyed relatively competitive taxes, with total tax liabilities being 36.7 percent, 26.7 percent, and 26.8 percent lower than in the USA.

France and Italy were found to have the least competitive tax environments amongst all of the examined countries, with tax burdens being 79.7 percent and 52.9 percent higher than the benchmark.

Amongst the BRIC countries, India was found to have the lowest average tax burdens, with tax liabilities being approximately 50.3 percent less than in the USA.

The tax burdens faced by business in China and Russia were found to be 40.3 percent and 28.2 percent lower than in the USA respectively.

Brazil was the only BRIC country with a tax environment less competitive than in the USA, with businesses facing an average tax burden which was 42.6 percent higher than the benchmark.

Photo by 401(K) 2012