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  • Residence and basis for taxation

    In Argentina coexist 3 levels of taxation: federal, provincial (state) and municipal level.

    An entity is deemed resident for tax purposes when it is incorporated in Argentina under the laws of Argentina. An Argentine individual is considered a tax resident unless they lose their tax residence status by choice, obtain legal residence in other country or by fact, when the individual is outside the country for at least a 12-month period, with certain exemptions.

    Domestic

    Local entities and resident individuals are subject to income tax on domestic and foreign source income.

    Foreign

    Non-resident entities or individuals are taxed on income of Argentine source. The tax applicable is the income tax that comprises corporate earnings and capital gains. In general, a local resident paying to a foreign entity or individual is obliged to withhold income tax. The withholding rate varies in connection with the type of payment. 

    Permanent establishments are taxed as local entities on income attributable to the permanent establishment.

    Income tax on indirect transfer

    Income tax on an indirect transfer may apply if a non-resident entity is transferred provided that at least 30 percent of value of the entity is represented by assets located in Argentina and provided that the transferor owns at least 10 percent of the capital of such entity.

  • Taxable income

    Domestic

    In general, the taxable income in the income tax for resident entities and resident individuals is equal to gross earnings minus deductions. In general, all expenses incurred to obtain, maintain and preserve taxable income are deductible unless expressly forbidden.

    Foreign

    Non-resident entities and individuals are taxed on income of Argentine source by way of income tax. The local resident paying to a foreign entity or individual is obliged to withhold the income tax at a 35-percent (or 15-percent for some gains as capital gains) tax rate applied on a presumption of taxable income that varies in connection with the concept by which the payment is made. The presumption of taxable income can be from 35 percent up to 100 percent of the amounts paid.

    For incomes connected to the transfer of shares, bonds or titles, or incomes connected with the rental of real estate or the transfer of assets located in Argentina owned by a non-resident, the non-resident individual or entity is entitled to choose to apply the presumption of income or to present evidence of all the expenses incurred and deduct those expenses from the gross amount to be paid.

  • Tax rates

    Domestic

    Local entities are subject to an income tax rate of 30 percent for the fiscal year 2020 and 25 percent as of the fiscal year 2021.

    In general, local individuals are taxed at a progressive tax rate that goes from 5 percent to 35 percent, except for earnings with a fixed tax rate. Those are the following:

    • For local individuals, the transfer of sovereign bonds or any title is taxed at a 5-percent income tax rate if the title is issued in Argentine pesos, or 15-percent income tax rate if a share of a corporation is transferred, or if the title or sovereign bond is issued in Argentine pesos with an adjustment clause or in foreign currency except an exemption results applicable.
    • The transfer of real estate by a local individual is taxed at a rate of 1 percent of income tax.  

    Foreign

    In general, non-resident entities and individuals are taxed at an income tax rate of 35 percent applied on the presumption of taxable income with effective tax rates of 12.5 percent up to 31.5 percent (see Taxable Incomes). Some concepts are not taxed at the general 35-percent tax rate and are taxed to a specific tax rate.

    • Transfer of sovereign bonds or any title (public or private) is taxed at a 5-percent income tax rate if the title is issued in Argentine pesos, or 15-percent income tax rate if the title is issued in Argentine pesos with adjustment clause, or in foreign currency except an exemption results applicable. The transfer of shares of a local corporation is taxed at a 15-percent income tax rate. This assumes that the foreign beneficiary is in a jurisdiction considered as cooperative for tax purposes. 
    • Dividends paid to a non-resident individual or entity are taxed at a 7-percent tax rate for the fiscal year 2020 and 13 percent as of the fiscal year 2021.
    • The applicable tax rates can be lower if a double taxation treaty is applicable.
  • Tax compliance

    Local entities and individuals are obliged to fill tax returns at the federal, state and municipal level depending on their activities. Tax returns must be filled on a monthly or yearly basis depending on the tax.

    Information regimes are applicable to certain activities. Advance payment regimes are applicable for some taxes.

  • Alternative minimum tax

    Not applicable for this jurisdiction.

  • Tax holidays, rulings and incentives

    Tax holidays

    Not applicable for this jurisdiction.

    Tax rulings

    In some cases, taxpayers are entitled to present to the tax authorities a request for a ruling on a specific case. The ruling is binding for the consultant.

    Tax incentives

    There are tax incentives at the federal, state and municipal level which target specific activities, such as renewables and software services and development.

  • Consolidation

    Not applicable for this jurisdiction.

  • Participation exemption

    Argentina tax legislation does not provide for a participation exemption.

    Dividends paid by a local entity to another local entity are exempt from income tax. Dividends are only taxed when distributed to a local individual or to a foreign entity or individual.

  • Capital gain

    Capital gains are taxed by the income tax.

    Domestic and foreign, see Taxable income and Tax rates.

    Income tax on indirect transfer

    Income tax on indirect transfer may apply if a non-resident entity is transferred provided that at least 30 percent of value of the entity is represented by assets located in Argentina and provided that the transferor owns at least 10 percent of the capital of such entity. When the transfer is carried on intragroup, the income tax on indirect transfer is not applicable.

  • Distributions

    Distributions are taxed as dividends. Regardless of the tax residence of the recipient, dividends are taxed at a 7-percent tax rate for the fiscal year 2020 and 13 percent as of the fiscal year 2021.

    Domestic and foreign, see Taxable income and Tax rates.

  • Loss utilization

    Losses can be carried forward and can be offset with future profits for a 5-year period.

    Losses considered to be of Argentine source can be offset only with profits considered to be of Argentine source. Losses considered to be of foreign source can only be an offset of foreign-source profits.

  • Tax-free reorganizations

    In Argentina, it is possible to carry on an intragroup reorganization with no tax effects. Mergers, spinoffs or partial spinoffs are exempted from income tax, VAT and turnover tax if certain requirements are met.

    Income tax on indirect transfers can also be carried on with no tax costs if it is an intragroup transfer.

  • Anti-deferral rules

    According to CFC rules, the profits of a foreign entity directly or indirectly owned by a local entity or individual should be declared and taxed in the fiscal year of accrual in the following cases:

    • Trusts: When the trust is revocable, when the settlor is also the beneficiary or when the resident individual or entity has full control of the trust
    • When the foreign entity is not considered a tax resident of the jurisdiction where it is incorporated
    • When:
      • The local individual or entity directly or indirectly owns at least 50 percent of the capital of the foreign entity
      • The foreign entity does not have sufficient structure to carry on its business or when at least 50 percent of the profits of the foreign entity are passive income
      • The taxes paid by the foreign entity in the country where it is incorporated are less than the 25 percent of the income tax that would be payable in Argentina (this requirement is deemed as occurred if the entity is incorporated in a non-cooperative jurisdiction).
  • Foreign tax credits

    Subject to conditions and limitations, foreign tax credits are available for foreign income taxes paid.

  • Special rules applicable to real property

    Domestic and foreign

    When a local entity or a non-resident individual or entity sells or transfers real estate property located in Argentina, income tax is triggered.

    For resident individuals, if the real estate property that is being transferred has been acquired by the seller before January 1, 2018, no income tax is applicable, and the local individual must pay a special tax on transfer of real estate property.

    There is the possibility of a tax deferral on the income tax applicable to the sale of a real estate property using a sale and replacement mechanism.

  • Transfer pricing

    Argentine transfer pricing rules apply to transactions between an Argentine party and a foreign related entity or any entity domiciled in a tax haven jurisdiction, a jurisdiction considered as non-cooperative, or that is subject to a privileged tax regime.

    Argentine transfer pricing rules follow arm's-length rule and follow the OECD guidelines with some divergences.

  • Withholding tax

    (see Taxable income and Tax rates.)

    Domestic

    Payments made by banks and financial institutions to local entities or individuals in the case of interests on bank deposits or financial investments are subject to income tax withholding.

    Dividends paid by a local entity to a local individual are subject to income tax withholding. The tax rate applicable is 7 percent for the fiscal year 2020 and 13 percent as of FY 2021.

    Foreign

    Non-resident entities or individuals are taxed on their income considered to be of Argentine source.

    The local payer is obliged to withhold the income tax at the time of the payment. Tax rates and presumptions of taxable income vary in connection with the type of payment made.

    Tax treaties may reduce or eliminate withholding of income tax.

  • Capital duty, stamp duty and transfer tax

    Capital gains are taxed by the income tax (see Taxable income and Tax rates.).

    Stamp duty or stamp tax is a provincial tax triggered by the entering of written agreements signed by both parties. The tax rate applicable varies in connection with the province and in connection with the agreement. Tax rates are of 0.2 percent up to 5 percent of the total amount of the agreement.

    There are legal mechanisms to avoid the payment of stamp tax by entering into an agreement as an offering letter.

    Transfers of shares, assets and real estate property are taxed under the income tax (see Taxable income and Tax rates.).

  • Employment taxes

    Employers must withhold income tax and social security contributions. Employers also must pay their share of social security contributions. These taxes are deductible by an employer for Argentine income tax purposes.

  • Other tax considerations

    Provincial taxes - Turnover tax

    Turnover tax or gross income tax is a tax collected by the province. The taxable event is the performance of commercial or industrial activity in the territory of the province. Tax rates can be 0.5 percent up to 6 percent in connection with the activity applied on the gross income. Some activities are charged with higher tax rates, such as online gambling, which is taxed at a 15-percent tax rate in the Province of Buenos Aires.

    In some provinces, turnover tax is also applicable to the import of digital services.

    Every province has its own turnover tax. However, the turnover tax collected by each province is similar, although different tax treatments may be applicable for certain activities.

    Tax benefits

    For some activities, there are special tax benefits at the federal level and provincial level.

    There are tax benefits for an investment in renewable energy, software production and services, investments in capital assets, biodiesel fuel and mining.

    The benefits may include partial or full exemptions, accelerated depreciation and drawback.

    VAT on the import of digital services

    The federal government collects VAT on the importation of digital B2C services. The taxpayer is the local resident unless the service provider has a fixed place in the Argentina. The tax rate is 21 percent.

    PAIS Tax

    The PAIS tax is applicable to the purchase of foreign currency by resident individuals. It is also applicable when a local individual pays for services to a foreign entity using their credit/debit cards. The tax rate is 30 percent, or 8 percent when the service being paid is already taxed with the VAT on digital services.

    Double taxation treaties

    Argentina has signed tax treaties with Germany, Australia, Austria, Belgium, Bolivia, Brazil, Canada, Chile, Denmark, United Arab Emirates, Spain, Finland, France, Italy, Mexico, Norway, Netherlands, the UK, Russia, Sweden and Switzerland (all in force), and Japan, Luxembourg, Turkey, China, and Qatar (signed but not yet in force).

  • Key contacts
    Augusto Nicolás Mancinelli
    Augusto Nicolás Mancinelli
    Partner DLA Piper (Argentina) [email protected] T +5411 41145500 View bio

Tax rates

Argentina

Domestic

Local entities are subject to an income tax rate of 30 percent for the fiscal year 2020 and 25 percent as of the fiscal year 2021.

In general, local individuals are taxed at a progressive tax rate that goes from 5 percent to 35 percent, except for earnings with a fixed tax rate. Those are the following:

  • For local individuals, the transfer of sovereign bonds or any title is taxed at a 5-percent income tax rate if the title is issued in Argentine pesos, or 15-percent income tax rate if a share of a corporation is transferred, or if the title or sovereign bond is issued in Argentine pesos with an adjustment clause or in foreign currency except an exemption results applicable.
  • The transfer of real estate by a local individual is taxed at a rate of 1 percent of income tax.  

Foreign

In general, non-resident entities and individuals are taxed at an income tax rate of 35 percent applied on the presumption of taxable income with effective tax rates of 12.5 percent up to 31.5 percent (see Taxable Incomes). Some concepts are not taxed at the general 35-percent tax rate and are taxed to a specific tax rate.

  • Transfer of sovereign bonds or any title (public or private) is taxed at a 5-percent income tax rate if the title is issued in Argentine pesos, or 15-percent income tax rate if the title is issued in Argentine pesos with adjustment clause, or in foreign currency except an exemption results applicable. The transfer of shares of a local corporation is taxed at a 15-percent income tax rate. This assumes that the foreign beneficiary is in a jurisdiction considered as cooperative for tax purposes. 
  • Dividends paid to a non-resident individual or entity are taxed at a 7-percent tax rate for the fiscal year 2020 and 13 percent as of the fiscal year 2021.
  • The applicable tax rates can be lower if a double taxation treaty is applicable.

Australia

Both resident companies and non-resident companies (with Australian-sourced income) are subject to income tax at the company tax rate of 30 percent, unless they qualify for a lower rate (25 percent for the 2021-22 income year and later income years) by satisfying specific requirements (ie, having an aggregated turnover of less than AUD50 million and satisfying an active income test).

Austria

Due to the qualification of corporations as independent tax subjects, a distinction must always be made between tax ramifications at the level of the company and those at the shareholder level. Profits of corporate entities are taxed at the company level at a flat rate of 25 percent corporate income tax (Körperschaftsteuer). Payments where the recipient is not disclosed (Empfängerbenennung) may attract a 25 percent surcharge and are not tax deductible.

The planned tax reform for 2021 includes a reduction in wage and income tax rates. Details of the relief for the economy have not yet been specified. Measures can be expected, such as a reduction in corporation tax from 25 percent to 21 percent over the course of several years.

 

Belgium

Resident companies are subject to a standard corporate income tax rate of 25 percent. The first income band of EUR100,000 of small companies is subject to a lower rate of 20 percent, provided that certain conditions are met.

Brazil

Canada

The federal general corporate tax rate for 2022 is 15 percent on general active business income, and the combined federal and provincial corporate tax rates for 2022 range from 23 percent to 31 percent depending on the provinces in which the permanent establishments of a corporate taxpayer are located.

Chile

The Chilean Income Tax Regime is structured as an integrated system in which corporate income tax paid by companies could be credited against the final taxes payable by shareholders or equity holders.

Corporate income tax is paid by the entity on its income and is payable on an accrued basis. The tax rate applicable to companies is 27 percent. Shareholders or equity holders must pay final taxes on effective distributions. In this case, shareholders or equity holders are entitled to credit, in general, 65 percent of corporate income tax paid by the company against final taxes according to the partially integrated regime. Nevertheless, foreign investors domiciled in a country with a double taxation treaty in force with Chile are entitled to credit against final taxes the total amount of the corporate income tax paid by the entity. In this regard, distributions to foreign investors are taxed at 35 percent and the corporate income tax paid by the company is fully creditable. Therefore, the final tax burden to foreign investors in this situation is 35 percent.

There is an alternative tax regime for small and medium companies with annual income below USD2.6 million. In this regime, the corporate income tax rate is 25 percent and the owners pay final tax on effective distributions.  In this regime corporate income tax is fully creditable against final taxes.

However, due the Covid-19 pandemic effects, the tax rate has been temporarily reduced to 10 percent for years 2020, 2021 and 2022.

 

Personal tax

Individuals domiciled or resident in Chile must pay personal tax (Impuesto Global Complementario) on their total income obtained during a year (dividends, interests, fees, among others). Personal tax has a progressive rate ranging from 0 to 40 percent.

Value-added tax

Value-added tax (VAT) applies to sales of tangible goods. Likewise, certain types of services related to the industry, commerce, mining, extractive activities, insurance, banking, telecommunications, publicity, hospitals, laboratories and entertainment, digital services, among others, are subject to VAT at a rate of 19 percent

In general, Chilean VAT law contains minimal exemptions.

Moreover, from January 1, 2023, all services except for the health, education and transportation sectors, and for all taxpayers who issue fee receipts as individuals, will be subject to VAT.

China

The standard enterprise income tax rate is 25 percent, with a few preferential tax rates applicable to qualified enterprises.

The standard withholding income tax rate for non-resident enterprises is 10 percent, which may be reduced by applicable tax treaties.

Colombia

Corporate Income Tax Rate is 35 percent as of 2022. Financial institutions that report a taxable income exceeding 120,000 UVT (in 2022, COP4,598,484,000) are subject to a special rate of 38 percent from 2022 to 2025.

Finland

The corporate income tax rate is 20 percent.

France

The Finance Act for 2018 provided for a progressive reduction of corporation tax rates to 28 percent on January 1, 2020, applicable from the first euro, 26.5 percent on January 1, 2021 and 25 percent as from January 1, 2022. Graduated income tax rates start at 15 percent with a top rate of 25.83 percent in 2022 (including a 3.3-percent additional contribution).

Germany

The corporate income tax rate is 15 percent plus a 5.50-percent solidarity surcharge levied on the corporate income tax (ie, 15.825 percent including the solidary surcharge).

The trade tax rate, which is levied by municipalities, varies, but in practice averages 14 percent to 17 percent of taxable income.

Trade tax is based on taxable income as calculated for corporate income tax purposes. However, several income adjustments apply.

Hong Kong, SAR

Under the 2-tiered profits tax rate regime (effective from April 1, 2018), the profits tax rate for the first HKD2 million of profits of corporations will be lowered to 8.25 percent; profits above that amount will continue to be subject to the normal tax rate of 16.5 percent. The said rates apply on all assessable income with only a few exceptions. The most significant one is the offshore fund profits tax exemption, which exempts most profit of offshore funds carrying on business in Hong Kong. Partial rate exemption (ie, 8.25 percent) applies to items of income such as income from qualifying debt instruments issued in Hong Kong or the onshore business income of professional reinsurance companies. In addition, qualifying corporate treasury centers may enjoy a 50 percent concession (ie, 8.25 percent) on the prevailing rate of normal Hong Kong profits tax (ie, 16.5 percent) on the qualifying profits.

Hungary

The corporate income tax is levied at a flat rate of 9 percent.

Local business tax is payable at a maximum of 2 percent on adjusted total trading turnover; it is deductible for corporate income tax purposes.

India

Income tax rates applicable to an individual taxpayer range from a rate of 0 percent to 30 percent. No income tax is payable if the income of the individual taxpayer is below INR250,000. A tax of 5 percent is payable if the income of the individual taxpayer is between INR250,000 and INR500,000 , a tax of 20 percent is payable if the income of the individual taxpayer is between INR500,000 and INR1 million and a tax of 30 percent is payable if the income of the individual taxpayer exceeds INR 1 million. The income tax rate for domestic companies is 25 percent if turnover or gross receipt of the company does not exceed INR4 billion in the financial year 2020-21. A surcharge of 7 percent is payable if the income of the domestic company exceeds INR10 million but does not exceed INR100 million. A surcharge of 12 percent is payable if the income of the domestic company exceeds INR100 million. Over and above the income tax and surcharge, health and education cess is payable at the rate of 4 percent of the income tax and surcharge by all taxpayers.

Domestic companies also have an option to pay income tax at a base rate of 22 percent for the financial year 2020-21 (assessment year 2021-22) on satisfying certain specific conditions such as not claiming certain deductions. A surcharge of 10 percent and cess of 4 percent will be applicable on companies claiming this option.

Ireland

Corporate tax is applied at 2 rates: 12.5 percent for trading income and 25 percent for non-trading (passive) income.

Israel

Both ordinary income and real capital gains of a corporation are subject to a flat tax rate of 23 percent.

These rates might be significantly reduced if the corporation is entitled to one of the incentive regimes discussed under Tax incentives.

Italy

The IRES standard rate equals 24 percent. Specific surcharges are applied to specific sectors.

Japan

For corporate tax, the basic national corporate tax rate is 23.2 percent for taxable years commencing from April 1, 2018 or later. Corporations are also subject to local taxes, which increase the standard effective tax rate to 30.62 percent (if the office is located in Tokyo). Since April 2016, the amended Corporation Tax Act has come into force, and corporate tax on a foreign corporation with a permanent establishment in Japan is imposed on its income attributable to the permanent establishment in Japan. For small and medium-sized enterprises, the lowered 19 percent national corporate tax rate is applicable for the income equal to or less than 8 million yen perannum. Until the taxable years commencing before April 1, 2023, such rate is further lowered to 15 percent for a corporation which average taxable income for the last 3 fiscal years is not exceeding JPY1.5 billion.

Luxembourg

For the fiscal year 2022, the corporate income tax (CIT) is 17 percent, leading to an overall tax rate for companies of 24.94 percent in Luxembourg City (taking into account the solidarity surtax of 7 percent and including 6.75 percent municipal business tax (MBT) rate applicable and which may vary depending on the seat of the company).

Mexico

The corporate income tax rate is 30 percent and, for individuals, it is progressive up to a 35 percent rate.

There is also a value-added tax (VAT) of 16 percent on transfers of goods, rendering of independent services, leasing of goods and importation of goods or services into Mexico.

Further, there is an excise that intends to reduce consumption of harmful products (eg, tobacco, alcohol, pesticides) and limit the use of resources (eg, gasoline, energy).

Mozambique

The general rate of IRPC is 32 percent.

Netherlands

The standard corporate income tax rate is 25,8 percent. A lower rate of 15 percent applies for taxable income up to EUR395,000. 

The Netherlands only levies withholding tax up to 15 percent on outgoing dividends, often reduced under the application of tax treaties or a domestic withholding exemption. As of January 1, 2021, the Netherlands levies a conditional withholding tax of 25 percent (25.8 percent as of 2022) on payments of interest and royalties to low tax jurisdictions and in abusive situations.

Norway

The corporate tax rate is 22 percent (2022).

Peru

In Peru, CIT rate is 29.5 percent, which is applied on net income. The same rate and tax basis apply to businesses that are carried out directly by individuals.

It should be pointed out that there are special tax regimes (mainly for small businesses and business that carry on activities in the Amazon) where the business tax rate or business tax burden could be reduced if certain conditions are met.     

Personal tax

Individuals that are domiciled in Peru shall pay personal tax on their income obtained during a year (eg, dividends, interests, fees, among others). The tax rate depends on the type of income as follows:

  • 5 percent on royalties, interests and dividends obtained in Peru.
  • Income obtained by independent professionals are subject to a progressive tax rate as explained in the upcoming points.

Value-added tax

Valued-added tax (VAT) has a flat rate of 18 percent if incurred in the following transactions: supply of goods within Peru; supply of services within Peru and utilizations of services in Peru; construction contracts; first sale of real state property made by the constructors; and importation of goods.

Poland

The corporate income tax (CIT) rate is 19 percent or 9 percent for taxpayers with sales revenue, excluding output VAT and not exceeding EUR2 million (with certain restrictions).

Portugal

The general corporate income tax rate is 21 percent. A reduced tax rate of 17 percent applies to the first EUR25,000 of taxable profits of small and medium-sized enterprises.

A state surcharge is levied on taxable profits at the following rates: 3 percent for profits over EUR1.5 million up EUR7.5 million; 5 percent on profits over EUR7.5 million up to EUR35 million and 9 percent on profits exceeding EUR35 million.

A municipal surcharge may be levied on taxable profits at rates up to 1.5 percent, depending on the municipality.

Romania

Romanian legal entities can be subject of 1 of the following tax systems:

Corporate income tax regime

Romanian tax resident entities and local permanent establishments of foreign entities are subject to 16 percent tax on their profits, computed/allocated as described above.

Micro-enterprise tax regime

Newly incorporated legal entities and companies that register a cumulative level of their taxable revenues (as listed by the tax legislation) lower than the RON equivalent of EUR1 million are obliged to apply the micro-enterprise taxation regime unless specific criteria regarding the share capital and the number of employees are met. The micro-enterprise tax applies to revenues derived by the entity and is 1 percent for entities that have at least 1 employee, and 3 percent for entities that have no employees.

After the above-mentioned threshold is exceeded, the legal entity automatically shifts to the corporate income tax regime.

Specific tax system for certain industries

Entities that operate in the hospitality industry are obliged to apply a specific taxation regime that is based on the business capacity and not on the level of the profits derived from their activity.

Casinos are obligated to apply the corporate income tax regime and pay a tax no lower than 5 percent of revenues related to gambling activities.

Russia

The general corporate profits tax rate is a flat rate of 20 percent.

Singapore

The current prevailing rate of corporate income tax is 17 percent. Partial exemptions are available in respect of the first S200,000 of chargeable income, as follows:

YA 2020 Onwards

Chargeable income

Exemption available

Exempt amount (S)

First S10,000

75-percent exempt

7,500

Next S190,000

50-percent exempt

95,000

Total exempt amount

 

102,500

Alternatively, a 75-percent tax exemption on the first S100,000 of normal chargeable income and a 50-percent exemption on the next S100,000 of normal chargeable income is available to new start-up companies, subject to certain conditions.

South Africa

The tax rate for resident and foreign corporate entities is 28 percent. In the 2022 National Budget, it was announced that the corporate tax rate would be reduced to 27 percent with effect for companies with tax years ending on or after March 31, 2023

South Korea

The basic rate on corporate income tax starts at 10% with a top rate of 25%. Corporate local income tax equivalent to approximately 10% of the corporate tax is also imposed.

Spain

The general corporate income tax rate is 25 percent. Reduced tax rates of 20 percent, 15 percent, 10 percent and 1 percent are applied to certain corporations. An increased tax rate of 30 percent applies to credit institutions and certain oil companies.

Sweden

The corporate income tax rate is 20.6 percent.

Switzerland

Federal corporate income tax is levied at a flat rate of 8.50 percent on profits after tax (ie, the effective tax rate, or ETR, is about 7.83 percent on profit before tax, since income and capital taxes are deductible in determining taxable income).

In addition, each canton has its own tax laws and levies cantonal and municipal corporate income taxes, generally imposed at flat rates.

As a general rule, the combined effective federal, cantonal and communal corporate income tax rate (ETR) currently varies between 12 to 22 percent on profits before tax, depending on the canton and municipality.

For associations, foundations and other legal entities, as well as collective investment vehicles, lower rates may apply.

Equity tax is levied on a cantonal and communal level. The tax rates currently vary from 0.001 to 0.60 percent. On a federal level, no equity tax is levied.

Taiwan, China

Income tax is assessed at a rate of 20 percent, and the threshold for subjecting a Taiwan company to corporate income tax is TWD20,000 per annum.

Turkey

In principle, the standard corporate tax rate is 20 percent. However, as per a provisional clause under the relevant legislation, it is applied as 23 percent for the 2022 fiscal year. It is calculated based on the fiscal profits on an annual basis.

Ukraine

Corporate income tax rate is 18 percent. Lower tax rates are applicable to income from insurance and gambling activities.

United Arab Emirates

Oil and gas producing companies pay tax in the form of royalties as per specific government concession agreements, which are confidential.

Branches of foreign banks are subject to income tax at a rate of 20 percent.

United Kingdom

The standard corporation tax rate is 19 percent (although the main corporation tax rate is due to rise to 25 percent from April 1, 2023).

Where the diverted profits tax applies, the applicable tax rate is 25 percent (although this is due to rise to 31 percent from April 1, 2023), and income subject to the ORIP rules is taxed at 20 percent.

The digital services tax rate is 2 percent of group revenue derived from UK users (in excess of a de minimis revenue of GBP25 million), although there is an alternative “safe harbor” calculation for groups with low operating margins.

United States

Flat federal corporate income tax rate of 21 percent. State and local taxes also may apply.

Zimbabwe

Tax rates differ based on the entity being taxed and are subject to change at the beginning of each tax year.