The countries with the lowest corporate tax rates
Affluent nations that boast the most business-friendly tax regimes
The US has slashed corporate taxes and no longer has the highest rate in the world after the United Arab Emirates, where firms pay an eye-watering 55%. As competing countries mull over whether to cut theirs in line with President Trump's audacious move, we reveal the 30 OECD nations with the lowest company tax rates.
30. New Zealand: 29%
At 29%, corporate tax makes up 15% of New Zealand's total tax revenue, and a recent crackdown on tax-avoiding multinationals should swell the coffers even more. Apple, for instance, has reportedly paid zero tax in New Zealand since 2007 as its operations are run by a parent firm in Australia.
29. Portugal: 28%
All businesses in Portugal are subject to corporate tax of 21%, but companies with bumper revenues – think major retailers and large energy firms – are slapped with surtaxes, paying up to 28%.
28. Austria: 25%
Austria has one of Europe's most pro-business tax regimes. Firms that are headquartered in the country pay a unified rate of 25%, and can take full advantage of other incentives, including generous R&D tax reliefs.
27. Netherlands: 25%
In the Netherlands, small businesses are liable for less corporate tax. Firms in the country pay 20% on the first $305,000 (£222k) profit, and 25% on any excess, and are especially rewarded for innovation through additional tax benefits, innovation credits and lavish grants.
26. Spain: 25%
The Spanish economy has finally returned to healthy growth, which may be partly explained by its competitive corporate tax rate of 25%. The levy, which peaked at 35% during the 2000s, was lowered in 2016 from 28%.
25. Chile: 25%
Bucking the global trend, Chile has actually hiked up its corporate tax rate in recent years – in 2010, the rate stood at just 19%. The extra cash is being used to fund social projects and reduce inequality in the South American country.
24. Italy: 24%
Businesses in Italy are obliged to pay a 24% flat rate tax, as well as a 3.9% municipal tax, but all is not what it seems. According to a Congressional Budget Office (CBO) report, many businesses are eligible for rebates and credits that can pretty much cancel out their annual bill.
23. Norway: 24%
Like many countries in Europe and elsewhere, Norway has reduced its corporate tax rate to entice foreign investors – the rate remained at 28% for years until 2014, when it was lowered to 27%. The tax was further reduced in 2016 to 24%.
22. Israel: 24%
Rather than impose a flat corporate tax rate that can penalise small businesses, Israel cuts low income companies some slack by taxing them at just 6% on their annual profit. Only the richest firms in the country pay the higher rate of 24%.
21. Japan: 23.4%
Keen to stimulate the economy, which is stuck in a low-growth rut, Prime Minister Shinzo Abe's Government is committed to lowering corporate tax rates in the country, which stand at 23.4% for companies with share capital exceeding $900,000 (£654k).
20. Denmark: 22%
Denmark offers a lot to more for foreign investors besides a low corporate tax rate of 22%. Incentives include virtually no social security contributions and a special taxation scheme for high-salaried expats, who pay just 26% income tax for the first five years spent working in the country.
19. South Korea: 22%
The higher corporate tax rate in South Korea stands at 22%, but not for much longer. The Government recently approved a 3% rise for the 2018 tax year to pay for social welfare programmes and new public sector jobs.
18. Sweden: 22%
At one time, Sweden imposed one of the highest corporate tax rates in the world, peaking at a staggering 60.1% in 1989. Since then, successive governments have lowered the amount of tax companies pay, and the Scandinavian country is now more business-friendly than most.
17. Slovak Republic: 22%
Simplicity reigns in the straightforward Slovak tax system. Reforms carried out in the 2000s cut the corporate tax rate, which now stands at a flat 22%, and did away with a number of other taxes that everyone loathes paying, including inheritance tax and taxation of dividends.
16. USA: 21%
The Trump administration has lowered the corporate tax rate to 21% from 35%, but whether the reduction will attract investment and stimulate wage growth, or simply benefit shareholders, remains to be seen. In any case, before the tax cut US businesses were actually paying an average of just 18.6% after deductions, according to the CBO report.
15. Luxembourg: 20.3%
Luxembourg taxes regular SARL companies (private companies that operate in mostly French-speaking countries) at 20.3%, but offers intellectual property (IP) firms huge rebates. In fact, IP companies registered in Luxembourg are subject to corporate tax of less than 6%.
14. Finland: 20%
Taxes in Finland tend to be steep. VAT is charged at up to 24% on many goods and services, income tax can be excessive and taxpayers are even liable for 'church tax'. Corporate tax, on the other hand, is nice and low at just 20%.
13. Iceland: 20%
Likewise, Icelandic firms pay only 20% corporate tax. The country cut the rate by a whopping 40% in the 2000s, and Iceland is now seen as a leader in low enterprise taxation and a thoroughly straightforward place to do business.
12. Turkey: 20%
A low corporate tax trailblazer, Turkey reduced the levy to just 20% back in 2006. Despite mounting political instability, the country is still an attractive location for multinationals, which benefit from various incentives to boot.
11. Estonia: 20%
Estonia is considered one of the most attractive countries for foreign companies. Its low corporate tax rate of 20% only applies to distributed profits, and any profits generated abroad are totally exempt from taxation.
10. Czech Republic: 19%
An appealing place for international investors, the Czech Republic has a low corporate tax rate of 19%. Better still, income is taxed at a flat rate of 15%, which is a major plus for high-salaried executives looking to relocate to the country.
9. Poland: 19%
Poland may have a low corporate tax rate of 19% and a lax taxation system, but the Government is sharpening up its act and cracking down on firms that are registered in tax havens, transfer profits abroad and generally fail to pay their fair share.
8. United Kingdom: 19%
The UK is set to reduce the corporate tax rate by 2% to just 17% by April 2020. According to the Government, lowering the tax has stimulated foreign investment, boosted jobs and raised $£20 billion for public services.
7. Slovenia: 19%
In contrast to the UK, Slovenia has done the opposite and recently raised the level of corporate tax by 2% to 19%. The increase was implemented to finance a cut in income tax, which is considered excessively high in the country.
6. Germany: 15.9%
Businesses in Germany pay corporate tax at a rate of 15.9% on average, but this isn't the full story. Companies are also liable for trade tax of up to 14% and a solidarity surcharge pushing 5.5%, which inflate their tax liabilities.
5. Canada: 15%
Canada's low corporate tax rate of 15% has enticed countless US firms, but the country's appeal to American companies is likely set to wane following the Trump administration's dramatic corporate tax cut.
4. Latvia: 15%
In Latvia, businesses big and small benefit from low corporate tax rates. A standard rate of 15% applies to larger, higher-revenue companies, while smaller, low-income microenterprises pay a reduced rate of 9%.
3. Ireland: 12.5%
Ireland low corporate tax rate of 12.5% has transformed the economy and attracted major companies from far and wide, but while the country's model for attracting inward investment has been imitated by several nations worldwide, it has drawn the ire of others, including France.
2. Hungary: 9%
The latest country to initiate massive corporate tax cuts, Hungary has reduced its rate from 19% to 9%, and now has the lowest rate in the EU. Prime Minister Viktor Orban's Government is on a mission to attract significant foreign investment.
1. Switzerland: 8.5%
Switzerland boasts the lowest corporate tax rate in the world on paper. Company profits are taxed at just 8.5% at the federal level. However, the country's cantons impose further taxes, which can take a firm's annual bill to 23% or more, depending on its turnover.
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