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12 Corporate Tax Rate Survey 2006

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22 Denmark (2006 rate = 28%) Two prepayments of corporate income tax during the taxable year are mandatory. If the final tax liability exceeds the prepayments a surcharge of 5.4 percent of the outstanding tax liability is payable. There are no local taxes on corporate income.

23 Dominican Republic (2006 rate = 30%) The 2005 Tax Reform Act increased the corporate income tax and withholding rates from 25 percent to 30 percent. These rates will fall to 29 percent in 2007, 27 percent in 2008 and 25 percent in 2009.

24 Ecuador (2006 rate = 25%/15%) The 15 percent rate applies to re-invested profits.

25 Estonia (2006 rate = 23% on distributed profits) Only profit distributions are subject to taxation. So a zero percent tax applies to profits that are not distributed, but retained in the company and/or re-invested; a 24 percent tax applies to profit distributions including dividend payments and other forms of profit transfers (transfer pricing items, non-business costs, payments to low-tax territories).

26 Fiji (2006 rate = 31%) In 2004 the corporate tax rate was reduced from 32 percent to 31 percent for companies incorporated in Fiji and also companies operating as branches of non-resident companies.

27 Finland (2006 rate = 26%) In 2004, the Finnish government proposed to lower the corporation tax rate to 26%. After the proposal was approved by the Parliament the tax rate became effective as of 1 January 2005, and generally applies to all Finnish corporations.

28 France (2006 rate = 33.33%) For fiscal years ending after 1 January 2006, the corporate tax rate is 33.33%. A 3.3 percent social contribution on the corporate income tax is applicable if the tax exceeds EUR 763,000, resulting in an overall tax rate of 34.43 percent. Companies (i) which have a turnover of up to EUR 7,630,000 and (ii) of which individuals hold at least 75 percent of the share capital (or are owned by companies meeting the same conditions) are subject to a corporate tax rate of 15 percent on the taxable profit in excess of EUR 38,120 and are exempt from the 3.3 percent contribution.

29 Germany (2006 rate = 38.34%) This rate applies to both retained and distributed profits. The rate includes corporate tax at 25 percent (plus a 5.5 percent solidarity surcharge thereon) and trade tax on income. The trade tax varies from 13.04 percent to 20 percent, assuming a municipality multiplier (Hebesatz) ranging normally from 300 percent to 500 percent (The average multiplier for 2004 was 388 percent. Since 2004 legislation has imposed a minimum trade tax multiplier of 200 percent to eliminate trade tax oases). Since the trade tax is a deductible item when calculating the corporate income tax, the corporate tax rate is based on the operating profit reduced by the trade tax (e.g. 16.25 percent based on an average multiplier of 388 percent).

© 2006 KPMG International. KPMG International is a Swiss cooperative of which all KPMG firms are members. KPMG International provides no services to clients. Each member firm is a separate and independent legal entity and each describes itself as such. All rights reserved.

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