Comparison of corporate tax systems in Europe, 2021

On October 17th, we released the International tax competitiveness index 2021, a study that measures and compares the competitiveness and neutrality of the tax systems of the 37 OECD countries. In the coming weeks, we will illustrate the ranking of European OECD countries in each of the five components of the Index: corporate taxes, personal income taxes, consumption taxes, property taxes and international taxation. Today we take a look at how European countries corporate tax regimes compare within the OECD.

Unlike other studies that compare tax burdens, the Index the extent to which a country structures its tax code. A competitive and neutral tax code promotes economic growth and sustainable investment while generating sufficient revenue for government priorities. Our corporate tax component scores countries not only on their corporate tax rates, but also on how they handle net operating losses, capital deductions, inventory valuation, and deductions for business. company equity, whether and to what extent patent boxes and R&D tax incentives are granted. , the application of taxes on digital services and on the complexity of corporate tax.

Click on the link below to view an interactive version of corporate tax rankings for OECD countries, then click on your country for more information on the strengths and weaknesses of its tax system and how it compares to the top and bottom five OECD countries.

Latvia and Estonia have the best corporate tax systems in the OECD. Both countries have a cash flow tax on corporate profits. This means that profits are only taxed when they are distributed to shareholders. If a company decides to reinvest its profits instead of paying dividends to shareholders, there is no tax on those profits.

In contrast, Portugal has the least competitive and least neutral corporate tax system in Europe (Japan ranks last in the OECD). At 31.5%, Portugal levies one of the highest corporate tax rates on corporate profits. Only limited net operating losses can be carried forward and back; purchases of machinery, buildings and intangible assets cannot be fully expensed.

To see if your country’s tax classification has improved in recent years, check the table below. To learn more about how we determined these rankings, read our full methodology here.

Comparison of corporate tax systems in Europe, 2021
Corporate tax component of International tax competitiveness index between 2019 and 2021 (for all OECD countries)
OECD countries Ranking 2019 Ranking 2020 Ranking 2021 Change from 2020 to 2021
Australia (AU) 30 30 29 1
Austria (AT) 19 23 21 2
Belgium (BE) 20 ten 15 -5
Canada (CA) 22 21 23 -2
Chile (CL) 32 5 1 4
Czech Republic (CZ) 36 37 37 0
Denmark (DK) 6 7 8 -1
Estonia (EE) 15 16 16 0
Finland (FI) 2 2 3 -1
France (FR) 7 8 7 1
Germany (DE) 37 36 34 2
Greece (GR) 28 28 27 1
Hungary (HU) 21 22 22 0
Iceland (IS) 5 6 6 0
Ireland (IE) ten 11 13 -2
Israel (IL) 4 4 5 -1
Italy (IT) 29 29 17 12
Japan (JP) 26 31 30 1
Korea (KR) 35 35 36 -1
Latvia (LV) 33 33 33 0
Lithuania (LT) 1 1 2 -1
Luxembourg (LU) 3 3 4 -1
Mexico (MX) 25 25 25 0
Netherlands (NL) 31 32 31 1
New Zealand (NZ) 24 24 24 0
Norway (NO) 23 27 28 -1
Poland (PL) 12 14 11 3
Portugal (PT) 13 15 14 1
Slovak Republic (SK) 34 34 35 -1
Slovenia (SI) 16 17 19 -2
Spain (ES) 11 12 12 0
Sweden (SE) 27 26 32 -6
Switzerland (CH) 8 9 9 0
Turkey (TR) 9 13 ten 3
United Kingdom (GB) 14 18 26 -8
United States (United States) 17 20 18 2

Source: International tax competitiveness index 2021.

Launch 2021 International tax competitiveness index

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