According to the Tax Foundation, the average highest corporate income tax rate is 22.9 percent, or 29.8 percent when weighted by GDP. However, some countries have significantly higher corporate tax rates. Let’s take a look at the five countries with the highest corporate tax rates in the world.
- The United Arab Emirates. This oil-rich gulf nation is known for its generally lax tax policies, as there is no income tax. However, the country certainly isn’t shy about taxing corporations. It has a corporate tax rate of 55 percent.
- Chad. When it comes to corporate tax rates, Africa has the highest simple average of 28.77 percent. Chad is certainly doing its part to drive up that figure, with a corporate tax rate of 40 percent.
- The United States. The United States has the highest corporate income tax of any of the 34 OECD countries, and it has the third-highest rate of all 173 countries in the world. The corporate tax rate is a full 16 percentage points higher than the worldwide average.
- Argentina. Argentina has a corporate tax rate of 35 percent. However, after years of rule by the leftist Peronist party, Argentina has a new center-right president, Mauricio Macri. He has introduced a number of pro-market economic reforms, and there is speculation that he may cut the country’s corporate tax rate, currently set at 35 percent. However, don’t get too excited: A non-Peronist president hasn’t managed to finish out his presidential term in over 70 years, and Macri could very well have difficulty getting his reforms through congress.
- The Democratic Republic of Congo. The second African country on our list, the Democratic Republic of Congo is marred by instability and violence. For those corporations that are within the country, the tax rate is 35 percent.
While these countries do have high corporate tax rates, overall, the global trend is a declining corporate tax rate. “Reductions in corporate income tax rates in the past 12 years have occurred across the globe, reducing considerably the worldwide average tax rate,” the Tax Foundation explained. “In 2003, the worldwide average was approximately 30 percent. By 2015, the average rate had declined by a little more than 7 percentage points to 22.8 percent and the worldwide GDP-weighted average tax rate has declined from 35.5 percent to 29.8 percent in the last 10 years.”
However, the Panama Papers leak has sparked a renewed interest in corporate tax rates around the world. Governments could find themselves under increasing pressure from international civil society to keep corporate tax rates high.
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