Growth and Development of International Tax Law

September 14, 2017

When looking for a country where businessmen can put their investment, they are considering the tax rates in different countries. This is the reason why many governments are trying to come up with the most competitive tax rates to attract international businessmen.  

To measure the tax competitiveness of different countries in the whole world, the World Economic Forum came up with a report showing the “total tax rate” wherein the lower figures, the better the total tax rate is. The total tax rate according to the World Bank is the total amount of taxes being paid by a business after deducting all necessary items and exemptions.  There are five different taxes being considered here: turnover taxes, profit or corporate taxes, social contributions and labor tax being shouldered by the employer (except the employee’s income tax), property tax and other small taxes.  

Let’s take a look at some of the countries with the lowest total tax rates in the world. These countries don’t necessarily mean that they are more progressive than other countries not included here. There are so many other factors that affect the economic growth and development of a particular country.  

Canada. 21%. This is one of the biggest countries with an advanced economy that occupies the upper ranks. In the province of Manitoba for instance, small businesses enjoy 0% corporation tax rates. 

Cambodia.21%. Sharing the spot with a giant country, this tiny government has attracted foreign investors in the last two decades. It has lower total tax rates than its neighbors in South East Asia. 

Namibia. With only 20.7%, this country is one of only two African nations in the list. 

Armenia. 20.4%. This country has implemented a simple tax system yet the government is plagued with revenue challenges.  

Luxembourg. 20.2%. All eyes were on this tiny country when its government faced tax scandals after investigative reports showed that some leaders are making “under the table” negotiations with major global companies.  

Croatia. After joining the European Union in 2013, the country cuts of its tax rate to only 18.8%. 

Singapore. With only 18.4% tax rates, no wonder why global companies choose Singapore as their home base in Asia. 

Macedonia. Their most recent business tax rate clocks in at 7.4% only making it the lowest in the world.