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Corporate Tax Rate Survey 2006 11
16 China (2006 rate = 33%) A tax reform is being carried out in China. Details may be issued in 2006 and become effective in 2007 at the earliest. The 33 percent tax rate is applicable to Foreign Investment Enterprises (FIE) and includes both the state tax rate of 30 percent and a local tax of three percent. Domestic enterprises are subject to a different set of tax laws and regulations. The state tax rate of 30 percent may be reduced to 15 percent or 24 percent if the FIE is located in one of the specially designated zones in the People’s Republic of China (PRC) and/or engaged in associated operations or projects. In addition, a qualified FIE may
be entitled to a tax exemption or reduction during a tax holiday period.
The local tax of 3 percent may be waived or reduced by the local government.
17 Colombia (2006 rate = 35%) The corporate income tax is levied at a rate of 35 percent. For 2006 there is a 10 percent surcharge resulting in an overall rate of 38.5 percent. Colombian companies and foreign branches that qualify as “industrial users” established in Colombian Duty Free Zones will be taxed at a 15 percent corporate income tax rate from 2007 onwards. Dividends and participations transferred abroad are kept to a 7 percent income tax rate. In addition a regional tax, the Industry and
Commerce Tax, is levied on industrial, commercial and service activities carried out within the municipality. The rate depends on the municipality and ranges between 4.14 and 13.8 per thousand. 80 percent of the Industry and Commerce Tax is deductible for tax purposes.
18 Costa Rica (2006 rate = 30%) The corporate income tax rate is 30 percent. Reduced rates are available for smaller companies. Corporate entities with a gross income under CRC 27,811,000
are subject to a 10 percent corporate income tax rate; corporate entities with gross income of more than 27,811,000 but less than 55,943,000 are subject to a 20 percent corporate income tax rate. Corporate entities with gross income exceeding 55,943,000 are subject to the ordinary 30 percent rate.
19 Croatia (2006 rate = 20.32%) The accounting profit adjusted in accordance with the provisions of the corporate income tax law is taxed at a 20.32 percent rate. Tourist tax, forestry tax and the
monumental protection fee are based on turnover.
20 Cyprus (2006 rate = 10%)
The corporate income tax for ‘public corporate bodies’ is 25 percent, plus a special three percent Contribution for the Defense of the Republic on the taxable income (before the deduction of losses) minus income from dividends, interest and rent.
21 Czech Republic (2006 rate = 24%) A special rate of five percent applies to profits of investment, mutual, and pension funds. Dividend income is taxed at 15 percent or, if received by a parent
company from its subsidiary (currently defined as a company resident in the Czech Republic, Switzerland or the EU in which the parent has held at least 10 percent for at least 12 months), zero percent. Subject to certain conditions
manufacturing companies can benefit from a corporate income tax relief for up to 10 years.
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