KPMG’s Corporate Tax Rate Survey 2005.pdf

KPMG’s Corporate Tax Rate Survey 2005 TAX Corporate Tax Rate Survey 2005 1 KPMG’s Corporate Tax Rate Survey 2005 KPMG’s International Tax Center is pleased to present its annual survey of corporate tax rates.The survey (begun in 1993) currently now covers 88 countries, including the 30 member countries of the Organization for Economic Cooperation and Development (OECD), the 24 members of the European Union (EU) and many countries in the Asia Pacific and Latin America regions. Local KPMG tax offices from these countries have contributed to this survey. Findings The global trend of decreased tax rates persists While the majority of nations had unchanged rates from 2004 to 2005, approximately 20 percent reduced their rates. The trend is most pronounced in Europe The rate reductions were most pronounced in Europe where Austria, Romania and the Czech Republic significantly reduced their rates. The average corporate tax rates fell to 26.49 percent for OECD countries (from 29.70 percent in 2004) and to 23.29 percent for EU nations (from 25.75 percent in 2004). Small changes in the Latin America and Asia-Pacific regions The tax rate changes in the Latin America and Asia-Pacific regions were much less pronounced than those in Europe. The largest reduction was implemented in Uruguay, where the tax rate was reduced from 35 percent in 2004 to 30 percent in 2005. Other notable changes were a decrease in Japan’s rate from 42.05 percent to 40.69 percent and a reduction in Singapore’s rate from 22 percent to 20 percent. Corporate tax rates only part of the equation Although the survey captures an interesting “snap shot” of global tax rates, it must be remembered that a low tax rate does not necessarily signify a low tax burden. Consequently, one must consider a particular nation’s tax base to properly gauge the