A Quick Look at Corporate Taxes By Country
February 23, 2016
Corporate taxes are one of the most important things to consider. With business operations taking place internationally, why not base your company in the country offering the lowest taxation? For global players tax planning is a vital part of their management since the 1980s. Sole proprietors and small businesses often complain about unfair tax privileges when they actually could claim the same. We’ve put together a brief overview over corporate tax rates for a few major countries.
Corporate Taxes in the United Kingdom
The normal general tax rate in the United Kingdom will weigh in at only 20 percent for the year ending in March 31st of 2016. By 2020, the corporate tax rate will drop to 18 percent. This tax rate would make the U.K. one of the most competitive countries in the world when it comes to corporate taxes.
Things get better, however, for profits derived from exploitable patents. In 2015/16, the tax rate for these profits amounted to only 12 percent, and in 2017 it dropped down to 10 percent. So if you’re an innovation and technology driven company, the United Kingdom is a very attractive place to be.
Corporate Taxes in France
Compared to the United Kingdom and various other tax jurisdictions, France is a relatively high tax country, with a tax rate of 33.33 percent. Worse yet, the corporate tax rate is just the beginning. According to some, France actually has the highest tax rate of any OECD country. Transferring profits of a corporation to the owner may be taxed with an additional 45%.
Corporate Taxes in Germany
Germany is one of the European Union’s strongest and most diverse economies. It should come as no surprise then that the country is home to a fairly high rate of 29%. As in the U.S. businesses in Germany can claim a number of exemptions and allowances reducing the effective tax rate. The complicated tax laws do, however, trigger additional costs for consultants, accounting and auditing. It should also be noted that Germany taxes corporations on income earned worldwide, though various tax treaties are in place to prevent double taxation.
Corporate Taxes in Hong
Hong Kong offers some of the most competitive tax rates in all of Asia, and indeed the world. The corporate tax rate in Hong Kong weighs in at just 17 percent, making it one of the lowest flat rates in the world. Further, only profits generated within Hong Kong are taxable. International earnings are fully exempt. Owing to all of these factors, Hong Kong has emerged as a top international financial hub and offshore center, with full incorporation packages starting at 1,799 Euros.
Corporate Taxes in Switzerland
Switzerland stands as a synonym for offshore bank accounts and tаx exemption. However, this is only true to certain holding structures and profits derived from dividends. A general corporation in Switzerland is subject to federal taxes of approximately 19 percent. Additional taxes may be levied by the 26 cantons. Swiss companies do require paid up capital of at least 50,000 CHF. Corporate maintenance, accounting and legal advice is subject to elevated Swiss rates.
Corporate Taxes in Cyprus
Cyprus is one of the countries with the lowest corporate tax in the European Union. Most businesses are subject to 12.5 percent. Some marine activities are charged only 4 percent and certain holding activities are fully tax exempt. As Cyprus companies have full access to the European market, they are a booking centre for offshore incorporations. Incorporation packages are available starting at 1,499 Euros.
Corporate Taxes in Belize
This list would not be complete if we would not add at least one fully tax exempt offshore jurisdiction. Belize does not charge any corporate tax from international business companies but only a flat fee to renew the company registration. Incorporation packages are available starting at 950 Euros.
If you are unsure which jurisdiction will best fit into your tax or wealth planning, please contact our consultants now.