December 21, 2022
- In 2022, 16 countries made changes to their statutory corporate income tax rates. Six countries—Colombia, South Sudan, Netherlands, Turkey, Chile, and Montenegro—increased their top corporate tax rates, while 10 countries—including France, Greece, and Monaco—reduced their corporate tax rates.
- Comoros (50 percent), Puerto Rico (37.5 percent), and Suriname (36 percent) are the jurisdictions with the highest corporate tax rates in the world, while Barbados (5.5 percent), Turkmenistan (8 percent), and Hungary (9 percent) levy the lowest corporate rates. Sixteen jurisdictions do not impose a corporate tax.
- The worldwide average statutory corporate income tax rate, measured across 180 jurisdictions, is 23.37 percent. When weighted by GDP, the average statutory rate is 25.43 percent.
- Asia has the lowest regional average rate at 19.52 percent, while South America has the highest regional average statutory rate at 28.38 percent. However, when weighted by GDP, Europe has the lowest regional average rate at 23.59 percent and South America has the highest at 32.64 percent.
- The average top corporate rate among EU27 countries is 21.16 percent, 23.57 percent in OECD countries, and 32 percent in the G7.
- The worldwide average statutory corporate tax rate has consistently decreased since 1980 but has leveled off in recent years.
Notable Corporate Tax Rate Changes in 2022
Sixteen countries changed their statutory corporate income tax rates in 2022. Six countries increased their top corporate rates: Colombia (31 percent to 35 percent), South Sudan (25 percent to 30 percent), Netherlands (25 percent to 25.8 percent), Turkey (20 percent to 23 percent), Chile (10 percent to 27 percent), and Montenegro (9 percent to 15 percent).
Ten countries across four continents—Seychelles, Sierra Leone, Zambia, Bangladesh, Myanmar, Tajikistan, France, Greece, Monaco, and French Polynesia—reduced their corporate tax rates in 2022. The tax rate reductions ranged from just 1.5 percentage points in Monaco to a 5 percentage point reduction in Seychelles, Sierra Leone, Zambia, and Tajikistan.
| Country | 2021 Tax Rate | 2022 Tax Rate | Change from 2021 to 2022 |
|---|---|---|---|
| Africa | |||
| Seychelles | 30% | 25% | -5 ppt |
| Sierra Leone | 30% | 25% | -5 ppt |
| South Sudan | 25% | 30% | +5 ppt |
| Zambia | 35% | 30% | -5 ppt |
| Asia | |||
| Bangladesh | 32.5% | 30% | -2.5 ppt |
| Myanmar | 25% | 22% | -3 ppt |
| Tajikistan | 23% | 18% | -5 ppt |
| Turkey | 20% | 23% | +3 ppt |
| Europe | |||
| France | 28.4% | 25.8% | -2.6 ppt |
| Greece | 24% | 22% | -2 ppt |
| Monaco | 26.5% | 25% | -1.5 ppt |
| Montenegro | 9% | 15% | +6 ppt |
| Netherlands | 25% | 25.8% | +0.8 ppt |
| Oceania | |||
| French Polynesia | 27% | 25% | -2 ppt |
| South America | |||
| Chile * | 10% | 27% | +17 ppt |
| Colombia | 31% | 35% | +4 ppt |
| Notes:
* In response to the pandemic, Chile has adopted a temporary rate reduction to 10 percent for small businesses. In 2022, for large companies, a 27 percent corporate tax rate applies. Source: Statutory corporate income tax rates are from OECD, “Table II.1. Statutory corporate income tax rate,” updated May 2022, https://stats.oecd.org/index.aspx?DataSetCode=Table_II1; PwC, “Worldwide Tax Summaries – Corporate Taxes,” 2022, https://taxsummaries.pwc.com/. Bloomberg Tax, “Country Guides – Corporate Tax Rates,” accessed November 2022, https://www.bloomberglaw.com/product/tax/toc_view_menu/3380; and researched individually, see Tax Foundation, “worldwide-corporate-tax-rates,” GitHub, https://github.com/TaxFoundation/worldwide-corporate-tax-rates. |
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Scheduled Corporate Tax Rate Changes in the OECD and Selected Jurisdictions
Among Organisation for Economic Co-operation and Development (OECD) countries, Austria, the United Kingdom, and Turkey have announced they will implement changes to their statutory corporate income tax rate over the coming years. Additionally, the United Arab Emirates and South Africa also plan to amend their corporate income tax rates in 2023.
- In Austria, the corporate income tax will be cut from 25 percent to 24 percent in 2023 and further to 23 percent in 2024.
- In the United Kingdom, the standard statutory corporate income tax rate is due to increase from 19 percent to 25 percent on April 1, 2023.
- In Turkey, the corporate income tax was temporarily increased from 20 percent to 25 in 2021 and 23 percent in 2022. However, in 2023 the corporate income tax will return to 20 percent
- The United Arab Emirates announced the introduction of a federal corporate tax in mid-2023. The proposed corporate income tax rate of 9 percent on taxable income above AED 375,000 (USD 100,000) would apply to all business activities, while a different rate might apply to large multinationals. However, the new corporate income tax will not apply to the extraction of natural resources as these activities are already subject to taxation in the Emirates.
- In South Africa, the corporate income tax will be cut from the current 28 percent to 27 percent for fiscal assessment periods that end on March 31, 2023, or after.
Source: Tax Foundation
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