Canada ranks among world’s best places for corporate taxes

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Canada has moved up three places to eighth in a global comparison of the most advantageous place to pay corporate taxes, placing the country in the top 10 for the first time.

The annual study by PwC, in conjunction with the World Bank and the International Finance Corporation, shows Canada moving sharply up in a 185-country comparison.

Canada placed 28th as recently as 2010, but continuing reductions of the corporate rate both federally and provincially, as well as reduced red tap, has dramatically improved its standing.

The advance, from a business point of view, coincides with the federal government’s efforts to brand a 25% national corporate tax rate, harmonization of sales taxes in Ontario, and improvement in the easy of filing taxes.

“As far as most countries are concerned, we’re actually a pretty friendly jurisdiction,” said Jason Safar, a partner with PwC’s tax service in Toronto.

“Canada’s current tax laws have attractive tax regimes, which impact all companies — in particularly small-medium sized domestic companies.”

The new study, which is being issued early Monday, is not the only one to have judged Canada’s corporate tax regime favourably from a business viewpoint.

Last year, Forbes magazine ranked Canada the best country in the world to do business, citing its dropping tax rate, sound banks, investor protection and relative lack of red tape.

The PwC comparison looks at three specific metrics — tax rates, the average number of hours businesses devote to paying taxes each year, and how many times a year they must file. The latter two relate to the ease of operating in the country, and PwC says it is more important than many believe.

“The economic analysis to compare the paying taxes indicators with gross domestic product and foreign direct investment suggests that while higher business taxation can be linked to slower economic growth and international investment, reducing the administrative burden and complexity of the tax system can potentially be linked to a greater change in overall growth,” the report states.

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One thought on “Canada ranks among world’s best places for corporate taxes

  1. Pingback: Canada ranks among world’s best places for corporate taxes | besttorontotours

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