Corporate tax rates

The company tax rate in Australia, at 30%, is competitive compared with other western major economies.

Australia's Research & Development (R&D) system features a highly competitive national tax incentive program which provides a:

  • 45% refundable tax offset (equivalent to a deduction of 150%) to entities with an aggregated turnover of less than $20 million per annum undertaking eligible R&D activities, and 
  • 40% non-refundable offset (equivalent to a deduction of 133%) to all other eligible entities.
Corporate tax rates, 2013
Country Rate (%)
India1 42.0
United States2 40.0
Japan3 38.0
France4 33.3
Australia 30.0
Philippines5 30.0
Germany6 29.6
New Zealand 28.0
China7 25.0
Indonesia8 25.0
Malaysia9 25.0
Korea10 24.2
United Kingdom11 23.0
Thailand12 20.0
Singapore13 17.0
Taiwan14 17.0
Hong Kong SAR 16.5

Footnotes:

It should be noted that the taxable profits (tax base) used for the computation of tax payable may differ between countries, and companies should seek advice on their specific circumstances.

  1. The effective tax rate for foreign companies with income greater than INR 10 million is 42.02% (40% basic corporate tax, plus surcharge of 2% of the tax, plus education cess of 3%). For foreign companies with income less than INR 10 million it is 41.2% (40% basic corporate tax plus education cess of 3%). The effective tax rate for domestic companies having income less than INR 10 million is 30.9% (30% basic corporate tax plus education cess of 3%), otherwise it is 32.45% (30% plus surcharge of 5% of the tax, plus education cess of 3% on tax and surcharge). A Minimum Alternate Tax (MAT) is levied at 18.5% of the adjusted profits of companies where tax liability is less than 18.5% of the book profit.
  2. The federal corporate income tax is applied on a sliding scale. The marginal federal corporate income tax rate on the highest income bracket of corporations (currently US$18.33 million and above) is 35%. State and local governments may also impose income taxes at rates ranging from less than 1% to 12% (top marginal rates average approximately 7.5%). A corporation may deduct its state and local income tax expense when computing its federal taxable income, generally resulting in a net effective rate of approximately 40%. The effective rate may vary significantly, depending on the locality in which a corporation conducts business. The United States also has a parallel alternative minimum tax (AMT) system, which is imposed on certain corporations and is generally characterised by a lower flat rate (20%) but a broader tax base with less deductions.
  3. The corporation tax rate is 38% as of 1 April 2012, and consists of corporation tax (national tax), special local corporate tax (national tax), business tax (local tax which is deductible from income) and prefectural and municipal inhabitant tax (local tax). The corporation tax rate is 25.5% for companies with paid-in capital of over JPY 100 million (15% on the first JPY 8 million and 25.5% thereafter for companies with paid-in capital of JPY 100 million or less), and there is a 10% surtax on the corporation tax payable for fiscal years between 1 April 2012 and 31 March 2015 in order to finance recovery from the March 2011 earthquake. Local tax rates vary depending on the locality, the amount of paid-in capital of the company, number of employees, etc. The standard tax rate is 5% as prefectural tax and 12.3% as municipal tax, but may be increased to 6% and 14.7%, respectively, depending on the local government.
  4. The corporate tax rate is 33.3%. An additional social contribution levy of 3.3% is applied to companies whose turnover exceeds EUR 7.63 million euros. This additional levy is calculated on the basis of the reference amount of corporate income tax less 763,000 euros. A temporary corporate income tax surcharge of 5% of the amount of their corporate income tax is also applied to companies whose turnover exceeds EUR 250 million, and is applicable to fiscal years ending on or after 31 December 2011 until 30 December 2013. Small and medium sized companies (those which have a turnover of up to EUR 7.63 million, and where individuals hold at least 75% of the share capital, or which are owned by companies meeting the same conditions) are subject to a corporate tax rate of 15% on the taxable profit up to EUR 38,120 and the standard rate on remaining profits, and are exempt from the 3.3% contribution tax and temporary surtax.
  5. The corporate tax rate is 30%. Corporations and resident foreign corporations are subject to the 2% minimum corporate income tax (MCIT) starting in their fourth year of operation. The MCIT is based on gross income and is paid in lieu of the 30% corporate tax on net income whenever it is greater than the latter.
  6. The overall income tax rate for corporations includes corporate income tax at 15% plus a solidarity surcharge of 0.825% (5.5% of the corporate income tax). In addition, a local trade tax, which ranges from 7% to 17.15% depending on the location, is levied. The 7% rate is the legal minimum and applies in a few villages in depressed areas, while the top rate applies to Munich. The local rates in most cities range between 14%-16%. This trade tax is not deductible as a business expense.
  7. The standard corporate income tax rate is 25%. Reduced rates are available for businesses meeting certain requirements, including small scale enterprises with low profitability (20%), qualified new/high tech enterprises (15%), and key software production enterprises (10%), for example.
  8. A flat rate of 25% applies to net taxable income. Public companies that satisfy a minimum listing requirement of 40% and certain other conditions are entitled to a tax discount of 5% off the standard rate, providing an effective tax rate of 20%. Small enterprises with an annual turnover of not more than IDR 50 billion are entitled to a tax discount of 50% of the standard rate on the proportion of taxable income which results when IDR 4.8 billion is divided by the gross annual turnover. When gross turnover is less than IDR 4.8 billion, the reduction applies on all taxable income.
  9. Resident companies with paid-up capital of MYR 2.5 million or less are subject to a corporate income tax rate of 20% on the first MYR 500,000 of chargeable income. For chargeable income in excess of MYR 500,000, the corporate income tax rate is 25%. For non-resident companies and all other resident companies, the tax rate is 25%.
  10. The corporate income tax rate is 24.2% (including a 10% resident surtax) if taxable income exceeds KRW 20 billion. For taxable income over KRW 200 million up to KRW 20 billion, a corporate tax rate of 22% (including the surtax) applies. The corporate tax rate is 11% (including the 10% resident surtax) up to KRW 200 million.
  11. The main rate of corporation tax fell to 23% from 1 April 2013. Companies with taxable profits of GBP 1.5 million or more pay tax at the full rate of 23%. For companies with taxable profits below GBP 300,000, the rate is 20%. For most companies with taxable profits between GBP 300,000 and GBP 1.5 million there is a sliding scale of tax rates.
  12. The corporate income tax rate is 20%, having been reduced for the two accounting periods beginning on or after January 2013. For small and medium enterprises with paid-up capital of less than THB 5 million and less than THB 30 million turnover, a rate of 0% applies on the first THB 150,000 of net taxable profits, 15% on THB 150,001 to THB 1 million of net taxable profits, and 20% on net profit over THB 1 million.
  13. The corporate income tax rate is 17%. From the year of assessment 2013 to 2015, companies will receive a 30% corporate income tax rebate capped at SGD 30,000 per year of assessment. A partial tax exemption is granted on 75% of the first SGD 10,000 of income and 50% on the next SGD 290,000.
  14. The corporate income tax rate is 17% and is applicable to taxable income in excess of TWD 120,000. The income tax payable may not exceed half of the part of taxable income that exceeds TWD 120,000.

Sources: PricewaterhouseCoopers, Worldwide Tax Summaries Online, www.taxsummaries.pwc.com, as at 8 April 2013; KPMG International, Corporate Tax Rates Table, as at 8 April 2013, www.kpmg.com/global/en/services/tax/tax-tools-and-resources/pages/corporate-tax-rates-table.aspx