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10 Corporate Tax Rate Survey 2006

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11 Brazil (2006 rate = 34%) The 34 percent rate includes Corporate Income Tax and Social Contribution Tax. The 25 percent corporate income tax comprises a 15 percent basic rate and a 10 percent surtax on income over BRL 240,000. The taxable income is adjusted in accordance with the Brazilian Corporate Income Tax Code. In addition, there is a nine percent Social Contribution on corporate taxable income, adjusted in accordance with Brazilian Social Contribution on Net Profits legislation. Depending on the type of income and further conditions a Social Contribution on Net Profits tax credit (bonus de adimplência fiscal) may be granted to certain Corporate Tax Payers. Some deferral of Social Contribution on Net Profits tax is available to companies that purchase new assets for industrial plants between October 1, 2004 and December 31, 2006. Each year, for four years, the qualifying taxpayer can decrease the payment of Social Contribution tax by 25 percent of the depreciation of these assets. At the end of the four-year period the Social Contribution tax deferred must be paid (it’s a tax deferral; not a tax credit). Additional conditions must be met to be eligible for this tax incentive.

12 Bulgaria (2006 rate = 15%) The 2006 Central government Corporate Income Tax rate is 15 percent. The tax year is on a calendar year basis and the annual return must be filed by March 31 of the following year. Annual corporate income tax liabilities must be settled within the same term (after deduction of the advance corporate income tax installments paid in the course of the tax year). Other taxes on corporate income include 10 percent on Representation expenses (for meals and entertainment), specific endowments and sponsorship, as well as corporate expenses for the maintenance and repair of automobiles. Social expenses (i.e. certain expenses for employee fringe benefits) are generally subject to a 15 percent tax.

13 Canada (2006 rate = 36.1%) Includes federal tax of 22.1 percent (including surtax) for 2006 plus provincial tax. Depending on the province, the total effective general corporate income tax rate for 2006 ranges from 32.0 percent to 39.1 percent (27.1 percent to 38.1 percent for manufacturers). Lower rates are available to Canadian-controlled private corporations (CCPC) on their first $300,000 to $475,000 of taxable active business income. A representative tax rate for 2006 for a CCPC on its first $300,000 of eligible taxable income is approximately 18.6 percent (13.1 percent federal tax plus 5.5 percent provincial tax). Depending on the province, the total effective tax rate for a CCPC on its eligible income ranges from 14.6 percent to 21.6 percent. The representative federal, provincial and combined federal/provincial corporate tax rates cited for Canada are compiled from the Income Tax Act (Canada), RSC 1985, c. 1 (5th Supp.) as amended; and the Ontario Corporations Tax Act, RSO 1990, c. 40, as amended.

14 Cayman Islands (2006 rate = 0%) There are no notes for 2006.

15 Chile (2006 rate = 17%) Chilean Corporate Tax (“First Category Tax”) does not apply to income from dependent employees and independent personal services realized by taxpayers, individual or legal entities, regardless of their nationality, residence or domicile.

The tax base is the accrued net taxable income after allowable deductions and expenses. First Category Tax paid can be credited against personal taxes.

© 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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