Most of the world’s leading economies are also the places where businesses pay the most tax, according to new research.
Foremost economies like the US, China, India, Germany, France or Brazil come nowhere in the top 20 nations for corporate tax.
The survey by global accountants PwC looked at all taxes a medium-sized business might expect to pay in a year across 189 nations.
The top 11 nations all maintained their places.
The Middle East fared well, retaining the top three places with the United Arab Emirates, Qatar and Saudi Arabia. Bahrain, Oman and Kuwait also held on to top11 places.
Coconut economy
The surprise package in the top 10 is tiny Christmas Island state of Kiribati in the Pacific Ocean, with a population of around 100,000.
The economy relies on the world demand for coconut and is generally considered weak.
Ireland ranks as the highest-placed western economy for corporate tax competiveness, with Canada in eighth, Denmark in ranking 12 and the UK taking the 14th place.
Kevin Nicholson, head of tax at PwC, said: “Britain has one of the most open global economies and faces stiff competition from overseas to keep jobs and balance tax revenue.
“The coalition government has dropped corporate taxes in successive budgets and has pledged to cut compliance and tax rates even more. This innovative approach could propel the nation into the top 10 by the time the next survey comes around.”
Overall, rather than see a reduction in taxes, many firms are paying more.
2,600 hours to file tax return
Corporate taxes fell the most in the Democratic Republic of the Congo, where sales tax was switched to VAT.
This led the average global corporate tax rate to fall 1%, but if the survey ignored this, the average rate would have risen 0.2%.
Mary Monfries, head of tax policy at PwC, said: “Shifting the tax burden from companies to individuals via personal taxation or labour costs is a worldwide trend to urge entrepreneurs to invest more and to promote start-up business.
“Many governments are struggling with balancing taxes. Taxes on profits can trigger growth that leads to jobs, while cheaper labour taxes make hiring easier.”
The cost of compliance is another issue – in the UAE, filing company tax returns takes around 12 hours, while in Brazil, the time is nearer 2,600 hours.
Corporate Tax Competitiveness 2013
| Rank | Country | Change since last year |
| 1 | United Arab Emirates | |
| 2 | Qatar | |
| 3 | Saudi Arabia | |
| 4 | Hong Kong | |
| 5 | Singapore | |
| 6 | Ireland | |
| 7 | Bahrain | |
| 8 | Canada | |
| 9 | Oman | |
| 10 | Kiribati | |
| 11 | Kuwait | |
| 12 | Denmark | +1 |
| 13 | Mauritius | -1 |
| 14 | UK | +2 |
| 15 | Luxembourg | -1 |
| 16 | Switzerland | +2 |
| 17 | Norway | +2 |
| 18 | Kazakhstan | +2 |
| 19 | Seychelles | +1 |
| 20 | Brunei | +2 |
Source: PwC
