Switzerland corporation tax under EU average
Switzerland ranks 18th in the latest edition of PricewaterhouseCoopers’ (PwC) Paying Taxes global study, which looks at how easy it is for a standardised, medium-sized domestic company to pay its taxes.
A Swiss medium-sized company will pay 28,8% of its profits in taxes, substantially lower than the 40.3% average across the EU.
The study ranks 190 countries according to the levels of bureaucracy involved in paying and filing taxes, but also the amount of tax levied on companies.
The report’s findings show that the total tax rate decreased by 0.1 percentage points to 40.6%; time to comply declined by eight hours to 251 hours; and the number of payments by 0.8 to 25 payments.
The eight-hour reduction in the global average for time to comply is higher than in recent years, which PwC says reflects ongoing improvements in electronic tax systems, and in particular as a result of reforms implemented in Brazil.
Similarly, the fall in the number of individual payments required is largely due to the introduction and use of electronic filing and payment systems, which was the most common feature of tax reform in the past year. Jamaica was the top reformer, reducing the number of payments by 26 to 11.
The small decrease in the total tax rate results from 44 economies increasing taxes while 38 recorded a reduction. It also represents a combination of a decrease in other taxes offset by small increases in both profit and labour taxes.
The top ten rankings for the EU countries for ease of paying taxes are Ireland, Denmark, UK, Finland, San Marino, Latvia, Luxembourg, Switzerland, Netherlands and Estonia.
The top ten worldwide list is headed jointly by Qatar and United Arab Emirates, Hong Kong, Bahrain, Ireland, Kuwait, Denmark, Singapore, Macedonia and the UK.
The survey further demonstrates that Ireland's statutory headline rate on profits is broadly similar to the effective rate. The study uses a case study approach so that the same circumstances can be compared across a large number of companies.
Examining the difference between low and high income countries, the study finds that in low income economies it can take more than twice as long to comply with procedures to correct corporate income tax errors, and it is twice as likely to be subject to an audit.
Andrew Packman, leader for tax transparency at PwC said: "While we recognise the pressures on governments to raise tax revenues to fund public spending, in many economies, governments and tax authorities can make it easier for companies to pay their taxes and this includes the ability to claim a VAT refund or deal with a corporate income tax audit."