High corporate tax rates, an uncertain tax regime, and an uncertain policy environment such as the e-commerce policy have all made India one of the top litigation countries for foreign companies.
With no capital gains tax, robust IP protection, and one of the lowest corporate tax rates in the world, Singapore has topped the World Bank's Ease of Doing Business index year after year.
For instance, in 2011, the Joint Committee on Taxation estimated that repealing all corporate tax expenditures would be sufficient to lower the corporate tax rate to 28 percent.
These trade tensions are juxtaposed against the historic tax reform in the US that reduced the corporate tax rate for the first time in nearly 40 years.
A new US tax law, known as Tax Cuts and Jobs Act of 2017, has enabled companies to repatriate foreign profits at a low one-time-only corporate tax rate.
In these cases, the rate of corporate tax payable becomes a negative function of the rate of profit reinvestment, and hence firms which increase their rate of reinvestment diminish their taxation liabilities.
Ireland has positioned itself as a hub for tech business in recent years, attracting foreign companies with a 12.5 percent corporate interest rate as well as tax credits for research and development.
The Boston University study is similar to the findings from the Council of Economic Advisers study put out earlier this week, which said that the average household income could increase by $4,000 annually if the corporate tax rate was cut from 35 percent to 20 percent.
The report says 29 percent of Australia's top 200 companies are paying an effective corporate tax rate of 10 percent or less, while more than 14 percent have an effective tax rate of 0 percent, with Optus' parent company SingTel named as one of the country's top tax avoiders.
Companies including Apple, American Airlines and Home Depot are all generating positive headlines for giving some employees one-time bonuses, which they are crediting to the tax cuts recently passed by Congress(the corporate rate was reduced from 35 percent to 21 percent).
We still need to scrutinize the final proposal detailing matters such as the ways in which the tax base will be expanded, but it is my understanding that for companies doing business in the U.S. market the reduction in the corporate tax rate is a positive factor that will benefit them directly.
Specifically, the government should make all-out efforts to bring the nuclear power plant accident under control and ensure the stable supply of power, promote free trade agreements(FTA) and economic partnership agreements(EPA), reduce the corporate tax rate to the international level, prevent a rise in the value of the yen, and resolutely implement a mid-to-long-term growth strategy.
And an extensive review of the company's tax practices performed by the U.S. Senate's Permanent Subcommittee on Investigations in 2013 found that Apple pays taxes of less than 2 percent on its overseas income, and significantly less than the 35 percent U.S. statutory corporate tax rate on its domestic income.
These variables are output growth and hours worked(per capita), inflation(as measured by the core component of the Personal Consumption Expenditure deflator), the labor share as a measure of workers' compensation, the federal funds rate, and the spread between the BAA corporate rate and the ten-year Treasury yield as a measure of borrowing costs(see our New York Fed working paper for details).
English
中文
عربى
Български
বাংলা
Český
Dansk
Deutsch
Ελληνικά
Español
Suomi
Français
עִברִית
हिंदी
Hrvatski
Magyar
Bahasa indonesia
Italiano
Қазақ
한국어
മലയാളം
मराठी
Bahasa malay
Nederlands
Norsk
Polski
Português
Română
Русский
Slovenský
Slovenski
Српски
Svenska
தமிழ்
తెలుగు
ไทย
Tagalog
Turkce
Українська
اردو
Tiếng việt