Many of the world’s industrialized countries have scrambled to cut their corporate tax rates to stay competitive in the face of the economic crisis. The United States is not among them. Recently, the U.S. became the industrialized nation with the highest statutory corporate tax rate.
The U.S. is not the only country with an above-average corporate tax rate. Among the 34 OECD countries, eight currently have corporate tax rates that exceed the group’s weighted average of 29.3%. 24/7 Wall St. has reviewed the tax rates of these countries and examined any recent changes countries may have made.
All of the countries with the highest corporate tax rates have particularly large gross domestic products, with six of the eight among the top 10 GDPs in the Organisation for Economic Co-operation and Development. Of course, this suggests that larger countries are relatively confident in their ability to keep businesses despite taxing corporations at higher rates. While this may be true, most of these countries also have cut back their rates recently.
In March, Japan reduced its corporate tax rate to 38.01%, making the U.S. rate of 39.2% the highest, according to a recent analysis by the Tax Foundation. Lowering the corporate tax rate had been on the country’s policy agenda for a number of years, and was passed in order to increase competitiveness.
The weighted average of the 22-non U.S. OECD nations’ corporate tax rates has decreased by 6.1 percentage points to 29.3% over the past decade. Meanwhile, the U.S.’s has only decreased 0.1 percentage points to 39.2%.
24/7 Wall St. used OECD’s listing of statutory corporate tax rates for 2011, with 2012 adjustments made where appropriate by the Tax Foundation. We also included GDP and government debt as a percent of GDP, both of which came from the OECD.
These are the eight countries taxing business most.