About Effective Tax Rates by Country
All countries have separate tax rates for corporations and individuals, plus some countries have various forms of consumption taxes, variously called VAT (value added tax) or sales taxes. Most nations also have property taxes and excise taxes, such as those imposed on alcohol and cigarettes. Accurate totals of total taxes are thus elusive even to the most skilled accountant, but certain rough numbers can be given.
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Effective Taxes
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Effective tax rate gauges the percentage that an individual is taxed on earned income. It is also the average tax rate, expressed as a percentage, on pre-tax corporate profits.
Owing to loopholes, exceptions and legal dodges, there is often a yawning gap between official, statutory tax rates and the actual, effective tax rates. In the United States, the many deductions and exclusions make effective rates nearly impossible to calculate without specific knowledge of who or what is being taxed.
Making the calculations of effective tax even more difficult in the United States are the numerous taxes levied by school districts, municipal governments, counties and states.
The confusion of exceptions and exclusions exist to a greater or lesser extent in all countries. -
U.S. and Canada
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According to Worldwidetax.com, the United States imposes taxes, on average, of 15 percent to 35 percent on individuals and corporations. No consumption tax is listed because sales taxes are levied by cities and states. Canada taxes individuals from 15 percent to 29 percent. The Canadians tax small businesses 11 percent and corporations 19 percent. Provinces tax individuals from 10 percent to 16 percent.
U.K., France and Germany
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The United Kingdom taxes the income of individuals up to 28 percent and corporations up to 40 percent, in addition to a 15 percent value added tax. France taxes individuals up to one-third of their income, corporations from 5.5 percent to 40 percent, plus has a 19.6 percent VAT.
Germany imposes an income tax of 30 percent to 33 percent, a corporation tax of 14 percent to 45 percent, and has a VAT of 19 percent.
China, Japan, and Singapore
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China has a 25 percent personal income tax, a 14 percent to 45 percent corporate income tax, and a 19 percent VAT.
Japan taxes individual income at 30 percent, corporate income at 5 percent to 45 percent, plus has a 5 percent consumption tax.
Singapore has an 18 percent personal income tax, corporate taxes of 3.5 percent to 20 percent, and a 7 percent VAT.
Brazil, India, and Indonesia
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Brazil taxes personal incomes at 34 percent, corporate income at 7.5 percent to 50 percent, in addition to a VAT that ranges from 17 percent to 25 percent.
India imposes personal income taxes of 30 percent to 40 percent, corporate income taxes of 10 percent to 30 percent, plus levies a 12.5 percent VAT.
Indonesia has a 28 percent personal income tax, a corporate income tax rate of 5 percent to 30 percent, and a 10 percent VAT.
Israel, Ireland, and Russia
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Israel imposes a 26 percent tax on personal income, a corporate tax of 10 percent to 46 percent, and a 16.5 percent VAT.
Ireland taxes individuals 12.5 percent, corporations from 20 percent to 41 percent, and has a 21.5 percent VAT.
Russia has a 20 percent personal income tax, a 13 percent corporate income tax, and an 18 percent VAT.
References
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