Nations around the world are reducing corporate taxes, according to a report by PricewaterhouseCoopers.
The report found that 21 economies have cut their corporate income tax rates. Eight economies have reduced the number of taxes paid by businesses. Thirty-six economies have made it easier to pay taxes, with the Dominican Republic leading the way in this respect, followed by Malaysia. Twelve have improved their electronic filing and payments systems efficiency.
Among the 30 industrialized countries in the Organization for Economic Cooperation and Development, the U.S. has the second highest corporate tax rate. The U.S. has a combined federal, state and local corporate tax rate of approximately 39.3 percent, or 50 percent higher than the 26.2 percent average for the other 29 OECD member countries. However, this figure does not take into account the many deductions that corporations typically take. Other studies have found that many U.S. corporations pay no income taxes.
The PwC report noted that the high U.S. statutory corporate tax rate is partially offset by the 6 percent federal Domestic Production Activities Deduction, which reduces the effective federal corporate income tax rate on qualified income from 35 percent to 32.9 percent for qualified income.
The report also found that for small and midsized companies, the U.S. compares favorably with other countries in terms of ease of compliance. Widespread availability of electronic filing is an important factor in the favorable U.S. ranking in terms of the number of annual tax payments.
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