The Eight Countries Taxing Business Most

8. Spain
> 2012 tax rate: 30% (tied for 6th highest)
> 2002 tax rate: 35% (tied for 9th highest)
> GDP: $1.48 trillion (8th highest)
> Gov’t debt as pct. of GDP: 66.1% (17th highest)

Although Spain has cut its corporate tax rate from 35% to 30% over the past decade, its competitiveness may not have improved . The country’s corporate tax rank among OECD countries has increased from ninth highest to sixth highest — tied with Mexico and Australia. Additionally, the country’s tax rate may soon increase again. Spain continues to be at risk of financial meltdown and has announced plans to cut its budget gap by one third. Part of this process will include increased taxes on corporations.

Also Read: The Best American Cities for Business

7. Mexico
> 2012 tax rate: 30% (tied for 6th highest)
> 2002 tax rate: 35% (tied for 9th highest)
> GDP: $1.65 trillion (7th highest)
> Gov’t debt as pct. of GDP: n/a

Mexico’s corporate tax rate has been close to the OECD average for the past decade, although it is currently slightly higher. In 2002, the country had a tax rate of 35%. By 2007, this rate had decreased to 28%. In response to the global economic crisis and the country’s own budget deficit, Mexico’s President Felipe Calderon proposed raising this rate to 30%. This proposal was adopted in 2010. As of now, the country plans to scale back the corporate tax rate to 29% in 2013, and 28% in 2014 and future years.

6. Australia
> 2012 tax rate: 30% (tied for 6th highest)
> 2002 tax rate: 30% (tied for 16th lowest)
> GDP: $0.92 trillion (12th highest)
> Gov’t debt as pct. of GDP: 25.3% (2nd lowest)

Despite having a particularly low government debt relative to its GDP, Australia has one of the highest corporate tax rates among developed nations. The nation has plans to cut its current corporate tax rate of 30% down to 28% over two years, starting in 2013, to make the country more competitive with international trading partners. According to The Australian, these “changes to the corporate tax rate will cost the government $200 million in the first year, and then up to $2 billion each year after that.” However, this shortfall is expected to be covered by new taxes on natural resources.

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5. Germany
> 2012 tax rate: 30.2%
> 2002 tax rate: 38.9% (4th highest)
> GDP: $3.07 trillion (3rd highest)
> Gov’t debt as pct. of GDP: 87.0% (10th highest)

Germany has the fifth-highest corporate tax rate among developed nations at 30.2%. Yet this does not appear to have hindered the country’s economy. Germany has the third-largest GDP in the OECD and is home to the only economy in the European Union that is expanding significantly. Since the 1980s, Germany had one of the highest corporate tax rates, and as recently as 2000 the rate was 48.55%.