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KPMG: Corporate vs indirect tax rate
January 15, 2013
By Rob Starr, Content Manager, Big4.com
Mirroring the trends seen in past years, the annual KPMG International Corporate and Indirect Tax Rate Survey shows that corporate and indirect tax rates around the world are in a constant state of change as governments look to increase indirect rates to raise revenue but to decrease corporate tax rates to attract investment.
As 2012 came to a close, KPMG International in their annual Corporate and Indirect Tax Rate Survey shows that the global indirect tax average increased by 0.17 percent to 15.50. Africa and Asia had the most significant increases, from 14.17 to 14.57 percent and 11.84 to 12.24 percent respectfully. A notable indirect development in 2012 saw the introduction of a VAT Pilot Program in Shanghai and its subsequent extension into other 10 other provincial-level regions.
For 2012, the United Arab Emirates claimed the highest corporate tax rate (55 percent), followed by the United States (40 percent) and Japan (38.01 percent). Of those countries with a corporate income tax, Montenegro had the lowest corporate income tax rate (9 percent), followed by a number of countries at 10 percent including Serbia, Cyprus, Paraguay and Qatar. It should be noted that the “statutory tax rates” could differ from the “effective tax rate”. For example the United Arab Emirates in practice does not levy corporate income tax.
“We expect the global indirect tax rate average to continue to rise in 2013 as more governments continue their path to economic recovery,” says Tim Gillis, KPMG’s Head of Global Indirect Tax Services. “Throughout 2013 a number of countries’ VAT systems will jump up including Finland, Dominican Republic and Cyprus.”
KPMG is a global network of professional firms providing Audit, Tax and Advisory services. We operate in 152 countries and have 145,000 people working in member firms around the world. The independent member firms of the KPMG network are affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. Each KPMG firm is a legally distinct and separate entity and describes itself as such.