A professional organization called Tax Foundation, has been creating an annual ranking from OECD member countries, based on their taxability. In 2015 Estonia is the first, and France is the last on the list.
This ranking contains vital information for investors and contractors and also helps the governments evaluating their own progress. For an investor, there are many factors to measure, prior starting an investment somewhere and of course taxation is not the only factor, but it is one of the most important ones. Another important factor is, that how frequent the taxation regulations are changing in individual OECD countries. The burdens almost never lessen, but the association successfully achieved in the past 35 years, that the previous average corporation tax rate had been decreased from 47,5% to 25%. The report highlights one counter example though, which is the USA, where the 35% corporation tax is the highest amongst the industrialized countries.
Taxation became extremely important in globalized world economy, where the assets clearly moving towards to areas offering the least tax burdens. Meanwhile, the offshore taxation goes out of fashion, while the enquiry turns on those areas, what offer internationally approved tax-free or low taxation options. So the investments leaves the hig-tax countries and moves to low, or no tax jurisdictions.
Even those countries, which are less competitive in terms of taxation, can change their tax system for the better, to be able to successfully compete in the international tax competition. New-Zealand is a great example for this, where personal income tax rates had been decreased from 38% to 33%, while the corporation tax rates got decreased from 30% to 28. After these modifications, they changed their system to territorial taxation. With this, they made foreign earnings tax-free.
Estonia’s first place seems to be unquestionable in the OECD taxation ranking, because they offered the best options in subcategories like: corporation tax, consumption tax and property tax. After Estonia, New-Zealand got the second, and Switzerland got the third place. The USA, Italy, and France are the least promising countries for investors – according to the OECD list. The incompetence of the French tax system, is very well displayed by this ranking, because they earned the lowest ratings on almost all subcategories like: property-tax and consumption tax. Hungary earned the 22th place, but earned 3.rd place in international taxation related themes.
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