Tag: Sean Bray

The EU’s Windfall Profits Tax: How “Tax Fairness” Got in the Way of Energy Security

Mary Pat Campbell

Link: https://taxfoundation.org/windfall-profits-tax-eu-energy-security/

Excerpt:

On 30 September, the Council of the European Union agreed to impose an EU-wide windfall profits tax on fossil fuel companies to fund relief for households and businesses facing high energy prices (due primarily to Putin’s war on Ukraine).

Given the dire economic environment for families and the urgency to transition away from Russian energy, extracting profits from fossil fuel companies to transfer to needy households sounds like killing two birds with one stone. It might even sound fair in a year when oil companies are making record profits because of higher energy prices. 

Unfortunately, it’s not sound policy. If history is any indicator, it will only make these goals harder to achieve.

The tax (or “Solidarity Contribution” in EU-speak) is calculated on taxable profits starting in 2022 and/or 2023, depending on national tax rules, that are above a 20 percent increase of the average yearly taxable profits since 2018. The EU anticipates the policy will raise about €140 billion.

Author(s): Sean Bray

Publication Date: 4 Oct 2022

Publication Site: Tax Foundation

Corporate Tax Rates around the World, 2021

Mary Pat Campbell

Link:https://taxfoundation.org/corporate-tax-rates-by-country-2021/?

Graphic:

Excerpt:

In 2021, 20 countries made changes to their statutory corporate income tax rates. Three countries—Bangladesh, Argentina, and Gibraltar—increased their top corporate tax rates, while 17 countries—including Chile, Tunisia, and France—reduced their corporate tax rates.

Comoros (50 percent), Puerto Rico (37.5 percent), and Suriname (36 percent) are the jurisdictions with the highest corporate tax rates in the world, while Barbados (5.5 percent), Uzbekistan (7.5 percent), and Turkmenistan (8 percent) levy the lowest corporate rates. Fifteen jurisdictions do not impose corporate tax.

The worldwide average statutory corporate income tax rate, measured across 180 jurisdictions, is 23.54 percent. When weighted by GDP, the average statutory rate is 25.44 percent.

Asia has the lowest regional average rate, at 19.62 percent, while Africa has the highest regional average statutory rate, at 27.97 percent. However, when weighted for GDP, Europe has the lowest regional average rate at 23.97 percent and South America has the highest at 31.03 percent.

The average top corporate rate among EU27 countries is 21.30 percent, 23.04 percent among OECD countries, and 69 percent in the G7.

The worldwide average statutory corporate tax rate has consistently decreased since 1980, with the largest decline occurring in the early 2000s.

The average statutory corporate tax rate has declined in every region since 1980.

Author(s): Sean Bray

Publication Date: 9 Dec 2021

Publication Site: Tax Foundation