Countries with the lowest taxes on corporate profits. Which countries have the lowest taxes on corporate profits? Which country has the lowest corporate tax rate? Which country has the lowest tax on profits in sole proprietorship? Which countries have the best business tax environment in the EU? Which EU member has the lowest tax on company revenue?
TOP 10 – World champions in low corporate tax 2021
(This applies to limited companies and similar)
|1||Bermuda||0||(no tax on profits, income, dividends or capital gains).|
|1||Cayman Islands||0||(no tax on profits, salaries or capital gains)|
|1||Guernsey||0||(20% for cannabis growers; banks 10%)|
|1||Isle of Man||0||(banks 10%, real estate 20%)|
|1||Jersey||0||(Finance companies 10%, large retail companies 20%, real estate companies 20%)|
|1||UAE||0||(oil and gas 55%; foreign banks 20%)|
|2||Barbados||5.5||(BBD > 1 MILLION EURO = 3%; BBD > 20 MILLION EURO = 2%; BBD > 30 MILLION EURO = 1%)|
|3||Turkmenistan||8||(foreign companies 20%)|
|4||Hong Kong SAR||8.25||(first 2 million HKD 8.25%, remaining profits taxed at 16.5%)|
|6||Bosnia and Herzegovina||10|
|6||Qatar||10||(35% may apply to companies in the oil and gas sector)|
|7||Switzerland||11.9||(effective tax rate between 11.9% and 21.6% depending on location)|
|9||Ireland||12.5||(25% non-commercial businesses)|
|10||Canada||15||(Provincial and territorial tax rates vary between 8% and 16%)|
|10||Iraq||15||(35% may apply to companies in the oil and gas sector)|
|10||Mauritius||15||(3% for goods-exporting companies)|
Table last updated 24 April 2021. Source: PWC.
TOP 10 – Countries with lowest tax rates for Sole Proprietorships 2021
If you plan to move out of your country entirely and have a small business, work as a consultant or make money on the Internet, you may not think it is worth it to start the equivalent of a limited company in another country. It may then be appropriate to look at the equivalent of a Sole Proprietorship which in English is called Sole Proprietorship. It is usually more challenging to obtain a list of tax rates for sole proprietorships in other countries compared to corporation tax for limited companies. Therefore, I have compiled a unique list of the taxes you will pay on the profits of the equivalent of sole proprietorship in different countries around the world. Often the tax is the same as for a limited company, or it follows the same tax structure as for salaries, but not always, and it can differ a lot both between countries and between different business forms. Each country also has a varying degree of complexity with different deductions and reductions on income, which can differ between ordinary wage income and profits from business activities.
|1||Saudi Arabia||0||(non-resident 20%)|
|1||Kuwait||0||(15% foreign business owners)|
|1||Bermuda||0||(In some cases up to 11.5%)|
|8||Russia||13||(>5M RUB 15%; non-resident 30%)|
|9||Sudan||15||(Manufacturing 10%; Agriculture 0%; Tobacco 2%)|
|9||Seychelles||15||(0% < 150000 SR; 15% < 850000; 33%)|
|9||Costa Rica||15||(5-10% < $15000; 20% < $175000; 30%)|
|9||Czech Republic||15||(23% > 1.7M CZK)|
|10||Ukraine||18||(plus 1.5% military tax since 2014)|
The table was last updated on April 22, 2021. Main source: PWC
*Why isn’t Monaco included? They have NO income tax. The simple answer is that in order to register in Monaco you have to open a bank account and deposit at least 300000 Euros, hence this is not a practical option for a small business owner or a freelancer.
*UK – if you have sole proprietorship registered in the UK you will have to pay tax on the profits/income, therefore the country is not listed as you will have to pay tax on profits over £12,500 per year. The tax is 20% on profits up to £37.5K, 40% over £37.5K and 45% over £150K. The UK is therefore far from being a tax haven.
*Temporary corporate tax reductions come in many shapes and forms during the Corona period. Several countries have already announced increases after the pandemic (including the UK, which is increasing to 25% on 1 April 2023).
TOP 10 – Lowest corporate tax rates in the EU 2021
|3||Ireland||12.5||(25% non-trading corp.)|
|6||Croatia||18||(10% for profits < 7.5M HRK)|
|7||Poland||19||(9% up to 2M Euro in turnover)|
|8||Estonia||20||(undistributed profits are tax-free)|
|10||Portugal||21||(plus local tax depending on location)|
|10||Slovakia||21||(15% for SMEs up to 100000 Euro in profit)|
|14||Belgium||25||(SMEs 20% up to 100000 Euro in profit)|
|14||Netherlands||25||(SMEs 15% for profits < 245000 Euro)|
|14||Spain||25||(15% for startups)|
|15||France||28||(plus a social security contribution of 3.3% calculated on corporate income tax. Revenue > 250M Euro gives 31% for profits > 0,5M Euro)|
|16||Germany||30||Corporate tax/solidarity surcharge: 15.825%; trade tax: 12.6%-20.3%, depending on location.|
|17||Malta||35||(Often only 5% for limited companies)|
Table last updated 22 April 2021. Source: PWC.
SME = Small company.
Malta officially has up to 35% tax on profits for limited companies but due to shareholder deductions the real tax in practice is often only 5%. Malta is therefore 2nd on the list in reality.
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