Among countries that changed their statutory corporate income taxa rates over the past year, the overwhelming majority cut them, continuing a trend towards lower rates that has persisted for several years, according to KPMG’s Corporate Tax Rate Survey 2006.
The global survey of statutory corporate income tax rates covers 86 countries. It found that rate reductions were most pronounced in Europe, where the average statutory corporate income tax rate fell from 25.32% to 25.04%, thanks to rate cuts in six EU member states. The reduction in the EU average rate compares with a reduction in the Organisation for Economic Co-operation and Development’s average rate from 28.55% to 28.31%.
The result is a slightly wider gap between the EU and OECD averages from 3.23 to 3.27 percentage points.
This may reflect intensifying tax competition inside the EU as a result of the accession of 10 new member states last year and the encouragement that EU law and jurisprudence has been giving to capital mobility in the EU.