Corporate Taxes by Country Around the World

Corporate taxes vary significantly from country to country, with some nations imposing relatively low tax rates while others charge much higher rates.

In the United States, for example, the corporate tax rate is 21%, significantly lower than the 35% rate that was in place before the Tax Cuts and Jobs Act of 2017.

Canada, on the other hand, has a corporate tax rate of 15% for small businesses and 26.5% for large corporations.

Sweden's corporate tax rate is a flat 21.4%, with no additional taxes or fees.

In Japan, the corporate tax rate is 30.62%, with a reduced rate of 20.42% for small and medium-sized enterprises.

The UK's corporate tax rate is 19%, with a reduced rate of 17% for companies that invest in research and development.

Countries with unique tax situations can be a challenge for businesses. For instance, in Singapore, there's a low corporate tax rate of 8.5% for the first S$300,000 of taxable income.

In the United Arab Emirates, taxes are generally low, with no personal income tax or corporate tax on most businesses. However, there are some exceptions, such as for oil and gas companies.

Some countries have special tax zones or free trade zones, like Bahrain, where businesses can operate with reduced tax rates or exemptions.

The WWTS territories are a unique case when it comes to corporate income tax rates. The heat map shows each territory's highest statutory CIT rate, with colors corresponding to the rate percentage.

Note that the rate applicable to a majority of industries is used for heat map purposes if rates are industry-specific. This means that some territories have different tax rates for different industries.

If a territory does not have a CIT, a rate of 0% is used for heat map purposes. This simplifies the process for territories that don't have a corporate income tax.

Territories with industry-specific rates or resident status-based rates will show the resident rate on the heat map. This adds an extra layer of complexity to understanding tax rates in these territories.

Clicking on a territory will take you to its 'Taxes on corporate income' page, where you can find more detailed information.

Countries with Low Corporate Tax Rates have a significant advantage when it comes to attracting businesses. Some countries in Eastern Europe and elsewhere have considerably lower than average corporate tax rates.

For example, Barbados boasts a corporate tax rate of just 5.5%. This is one of the lowest rates in the world. Other countries with low corporate tax rates include Hungary, Andorra, and Bulgaria, all of which have rates of 9-10%.

Here are some countries with low corporate tax rates:

It's worth noting that Asia has the lowest average corporate tax rate at 19.52%, while South America has the highest at 28.38%. Europe averages 19.74%, while North America averages 25.33%, and Africa 27.60%.

There are over 15 countries and self-governing territories with no corporate income tax at all. These include Anguilla, Bahamas, Bahrain, Belize, Bermuda, British Virgin Islands, Cayman Islands, Guernsey, Isle of Man, Jersey, Saint Barthelemy, Tokelau, Turks and Caicos Islands, United Arab Emirates, and Vanuatu.

Some of these countries, such as the Bahamas, Bermuda, and the Cayman Islands, are popular for offshore investing, particularly for U.S. businesses. Companies often use legal maneuvers to divert their profits to these countries and avoid paying higher taxes in their home countries.

These countries offer a range of tax advantages, including no tax on profits, dividends, or personal income. For example, the Bahamas doesn't tax profits, dividends, or personal income, and also doesn't impose capital gains, inheritance, gift, or unemployment taxes.

A few examples of countries with 0% corporate tax are:

These countries are often referred to as tax havens, offering little to no tax liability for corporations. However, customs and import fees are usually higher in these countries to account for it.

The United States has one of the highest statutory corporate income-tax rates among advanced countries, but its effective rate is quite close to the average of rich countries at 27.7 percent.

The US corporate income-tax rate is also not high by historic standards, having gradually been reduced from over 50 percent in the 1950s to its current 35 percent.

In fact, the current US corporate tax rate does not appear to be impeding corporate profits, with both before-tax and after-tax corporate profits as a percentage of national income at post–World War II highs.

Here's a comparison of corporate tax rates among OECD countries, including the US, ranked from lowest to highest:

The United States has one of the highest statutory corporate income-tax rates among advanced countries, but its effective corporate income-tax rate is quite close to the average of rich countries.

The current U.S. corporate tax rate is not high by historic standards. The statutory corporate tax rate has gradually been reduced from over 50 percent in the 1950s to its current 35 percent.

Corporate profits in the U.S. are at post–World War II highs. Both before-tax and after-tax corporate profits as a percentage of national income are 13.6 percent and 11.4 percent, respectively, in 2012.

There's no evidence that high corporate tax rates have a negative impact on economic growth. The analysis finds no correlation between changes in the statutory corporate tax rate or effective marginal tax rate on capital income and economic growth.

Here's a comparison of the U.S. corporate income-tax rate with its industrial peers:

Note that while the U.S. corporate income-tax rate is high, its effective rate is comparable to other rich countries.

The relationship between the statutory corporate tax rate and economic growth is a topic of much debate. The United States has one of the highest statutory corporate income-tax rates among advanced countries, but its effective corporate income-tax rate is quite close to the average of rich countries.

The statutory corporate tax rate has gradually been reduced from over 50 percent in the 1950s to its current 35 percent. This significant reduction has not led to a corresponding increase in economic growth.

Between 1950 and 1960, the economy grew at an annual average rate of 3.9 percent, when the statutory corporate tax rate was over 50 percent. In contrast, between 2000 and 2010, the statutory corporate tax rate was 35 percent, and annual economic growth averaged 1.8 percent.

A closer look at the data reveals a surprising trend: higher statutory corporate tax rates are actually associated with higher economic growth rates. The trend in real GDP growth is displayed in Figure B, with its ups and downs since 1947. The statutory corporate tax rate is also displayed in Figure B, leveling at about 52 to 53 percent through most of the 1950s and 1960s, then falling in steps to 35 percent.

Here's a summary of the key findings:

The United States has a corporate tax rate of 35%, which is one of the highest among advanced countries. The effective corporate tax rate in the US is 27.7%, which is quite close to the average of rich countries.

The US corporate tax rate is not high by historic standards. It has gradually been reduced from over 50% in the 1950s to its current rate. Prior to the 2017 passage of the Tax Cuts and Jobs Act (TCJA), the US corporate tax rate was 35%.

The Tax Foundation ranks the US 81st out of 225 jurisdictions in terms of corporate taxes, once state taxes are factored in. The US has a flat corporate tax rate of 21%, which is somewhat below the worldwide average of 23.37%.

Here is a comparison of corporate tax rates in various countries, based on data from the OECD:

The US corporate tax rate is not uniquely burdensome to US business when compared with the corporate tax rates of its industrial peers. The US has a high corporate tax rate, but the effective rate is not that different from other countries.