More On Tax Planningfrom The Advisor's Professional Library
- ETF Taxation The use of ETFs may be attractive to certain investors. The tax advantages may make them even more attractive.
- IRAs: In General Individual Retirement Accounts are highly popular tools for contributing funds that grow on a tax deferred basis. Depending on the type of IRA, the accumulation can be tax free.
Even though global corporate tax rates have been on the decline, falling slightly from 25.44% in 2009 to 24.99% in 2010, indirect taxes have been rising as governments all over the world seek new sources of revenue and adjust their tax rates accordingly. So says the 2010 Global Corporate and Indirect Tax Survey from KPMG International, released on Thursday.
That average indirect tax rate has climbed, albeit slowly, from 15.41% in 2009 to 15.61% in 2010, although change in both direct and indirect rates has been varied throughout the world. The survey results show that, since 2009, Africa, Asia, Europe, North America, and Oceania have all fallen in average corporate tax rates: 29.77% to 29.36% in Africa, 24.81% to 24.44% in Asia, 21.70% to 21.52% in Europe, 36.50% to 35.50% in North America, and 29.2% to 29% in Oceania. Latin America, however, increased from 26.82% in 2009 to 27.87% in 2010, primarily because of the Mexican corporate tax rate, which rose 2% to 30%.
In indirect taxes, Africa and North America held steady at 14% and 5%, respectively. Asia fell just a bit, thanks to the lower rate of newly admitted Cambodia’s below-average rate; omitting Cambodia from the survey shows that Asia has either held firm or risen. Europe, Latin America, and Oceania all rose as well.
Research by KPMG shows that more than 17 countries have changed tax rates, both corporate and indirect, since 2009, or have said they plan to alter the existing tax structures in years to come.
Loughlin Hickey, global head of tax for KPMG International, said in a statement, “Next year, the numbers will look much different. We fully expect to see numerous fluctuations as many economies around the world announce tax rate changes that will come into effect in the last few months of 2010 and into 2011. The issue for companies is who is best placed to absorb the costs of increased taxes as the worldwide pressures for tax revenues to fund stimulus or tackle government debt will impact them either directly or indirectly.”