U.S. has Third Highest Top Marginal Corporate Income Tax Rate in the World
Thursday, August 21st, 2014
Although it is well documented how the United States compares to other countries in the OECD, it is less well known how we stack up against other countries and tax jurisdictions throughout the world. According to the latest summary of worldwide corporate tax data from the nonpartisan Tax Foundation, the United States has the third highest general top marginal corporate income tax rate in the world at 39.1 percent, surpassed only by Chad and the United Arab Emirates.
In a survey of 163 countries, the report details the top corporate tax rates for each country, the average top marginal corporate tax rates and trends by region, and the distribution of worldwide corporate tax rates.
Some of the key takeaways include:
- The United States has the third highest general top marginal corporate income tax rate in the world at 39.1 percent, exceeded only by Chad and the United Arab Emirates.
- The worldwide average top corporate income tax rate is 22.6 percent (30.6 percent weighted by GDP).
- By region, Europe has the lowest average corporate tax rate at 18.6 percent (26.3 percent weighted by GDP); Africa has the highest average tax rate at 29.1 percent.
- Larger, more industrialized countries tend to have higher corporate income tax rates than developing countries.
- The worldwide (simple) average top corporate tax rate has declined over the past decade from 29.5 percent to 22.6 percent.
- Every region in the world has seen a decline in their average corporate tax rate in the past decade.
“The corporate income tax rate is one of many aspects of what makes a country’s tax code and economy attractive for investment,” said Tax Foundation Economist Kyle Pomerleau. “However, as the rest of the world’s economies mature and their tax rates on corporate income continue to decline, the United States risks losing its competitive edge due to its exceptionally high corporate income tax rate.”
Full report: Corporate Income Tax Rates around the World, 2014