There are fundamental changes in attitudes and approaches to tax all over the world. Tax rates, reflective of a country’s economic situation, are going up and down and there is no consistent approach.
“One of the biggest challenges today is that tax law is local but businesses are global,” says Wilbert Kannekens, KPMG’s Global Head of International Tax. “The complexity of applying national tax laws to companies that operate internationally causes problems. Many countries use their tax systems to compete for investment dollars and jobs, and to benefit from the foreign activity of their own multinationals.”
KPMG International’s Corporate and Indirect Tax Rate Survey 2014 shows that, since the publication of the survey’s previous edition in January 2013, 13 countries increased their indirect tax rate and none decreased. Nine countries increased their corporate tax rate and 24 decreased.
The increases in indirect tax rates are arguably evidence of it becoming the ‘tax of choice’ for governments around the world who are looking to raise much needed income.
“Indirect tax and its application changes almost every day in any number of countries. This variety comes with numerous challenges and complexities,” says Tim Gillis, KPMG’s Global Head of Indirect Tax Services. “Businesses must be proactive and maximize where they put their tax time, effort and dollars.”
Among countries that impose a corporate tax, the United Arab Emirates holds the top spot with the highest rate at 55 percent*. The lowest is Montenegro at 9 percent.
For countries that impose an indirect tax, Hungary takes the top spot at 27 percent. The lowest is Aruba at 1.5 percent.