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Corporate Tax Rate Survey 2006 9
companies, leasing companies and other financial institutions are taxed at 45 percent. A rebate amounting to 50% of the income derived from export business will be granted to companies registered in Bangladesh. Garment industries are subject to 10 percent corporate income tax and textile/jute industries to 15 percent, but these industries do not qualify for an export rebate.
If a listed company other than a bank, insurance or leasing company pays a dividend of less than 15 percent, despite having sufficient distributable profits, it is subject to an additional five percent tax on the undistributed profits. If the profit earned by a bank exceeds 50 percent of its capital and reserves, the bank is subject to a 15 percent "excess profits tax" on the additional profit.
7 Barbados (2006 rate = 25%) In 2003 the Government initiated a tax rate reduction program to reduce tax rates from 40 percent to 25 percent by 2006. The 25 percent corporate income tax rate applies to all corporate entities with respect to income not qualifying for international business concessions. The domestic corporate tax rate of 25 percent may be reduced, on a sliding scale, to 1.75 percent, by a foreign currency tax credit granted for qualifying foreign currency generating activities. An international financial service centre tax regime provides for exemption for qualifying insurance companies and a variable rate of 1 to 2.5 percent for other qualifying international business activities.
8 Belgium (2006 rate = 33.99%) A lower tax rate applies to companies that are owned more than 50 percent by individuals. The tax rate incorporates a “crisis” levy of three percent. As of fiscal year 2007 (income years starting January 1, 2006 or later) Belgian companies and foreign companies that have an establishment in Belgium benefit from a risk capital deduction (also called notional interest deduction) equal to a percentage (based on the return of a 10-year government bond; 3.442 percent for fiscal year 2007:) of the companies’ “adjusted” equity capital (including retained earnings). The notional interest deduction is expected to reduce the effective tax rate to an average of 26 to 27 percent (or even lower, depending on the equity capital of the company).
9 Bolivia (2006 rate = 25%) The corporate tax levied by the central government is the 25 percent annual profit tax (IUE). Payments of this tax are considered on-account payments for any subsequent year’s three percent Transactions Tax. Certain foreign companies activities performed in Bolivia through branches or agencies are subject to different tax rules. Such activities include transportation, international news agencies, foreign insurance companies and distribution of movies and videotapes. An effective rate of 5.5 percent is applied to gross income arising from these activities. Up to four percent of this tax is considered an on-account payment for any subsequent year’s three percent Transactions Tax.
10 Botswana (2006 rate = 25%) The corporate income tax rate is 25 percent, consisting of a 15 percent Company Tax and an additional 10 percent Company Tax (ACT). The ACT can be used to offset any withholding tax payable on dividend distributions. This arrangement can limit the overall corporate tax levied on both the company and the shareholder to 25 percent. Lower Company Tax rates are available for manufacturing entities (five percent). An approved International Financial Service Centre entity is only liable for Company Tax, not for ACT. Mining entities (with the exception of Diamond mining) are taxed at rates between 15 and 45 percent. Diamond mining taxation is negotiated with the Government.
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