As global trade becomes more interdependent, countries have increasingly used corporate tax rates as a way to attract international business and support domestic economic activity.
However, given the numerous ways that different countries apply corporate tax, it can be
difficult to compare nations at a glance.
Data for each country’s corporate tax rates and any special tax requirements that affect the
amount of taxes owed by small companies came from KPMG, the Tax Foundation, Trading
Economics, PricewaterhouseCoopers, Deloitte, and various government websites.
To better understand the costs of doing business around the world, OnDeck applied each
country’s tax laws to a model company with revenue of $1 million, profit of $100,000 a year, five to nine employees, is owned by a resident of the country in question, and earns a
majority of its revenue from business operations within the country in question. The study doesn’t include companies in the oil, gas, and mining sectors or publicly traded
● Tax rates are lowest in the Middle East and Europe — at 17.9% and 16.2%,
● They are highest in Africa and South America –– with average rates of 27.6% and
● The highest effective tax rate is in Suriname (36.0%).
● A handful of small nations have established themselves as tax havens with
effectively zero corporate tax rates — Bahamas, Bahrain, Monaco, Nauru, United
Arab Emirates, Vanuatu, and Vatican City.
How Small Businesses Are Taxed in Europe
On average, small businesses in Europe face a corporate tax rate of 17.9%, the lowest of any region other than the Middle East & Central Asia. Europe also excels in other measures of ease of doing business. It takes an average of 12.7 days to start a new business, and start-up costs are just 3.2% of GNI per capita — each the smallest such figures of any region.
● Georgia’s 15% general corporate income tax rate is one of the lowest in the world. It
also takes an average of just one day to start a new business, the second shortest
duration of any country.
● Companies in Monaco who earn at least 75% of their revenue within the country are
exempt from corporate tax.
● The 12.5% corporate tax rate in Cyprus is among the lowest in the world. The
country also has the third most new business registrations per capita of any country.
● Companies are subject to a flat corporate income tax rate of 21% in mainland
Portugal, while companies in the archipelagos of Madeira or the Azores are subject
to a corporate income tax rate of 14.7%.
● While Spain levies a general corporate income tax rate of 25%, newly created
companies are taxed at 15% for the first period in which they report a profit, as well
as the following tax period.