Corporate taxation is a complex tax system, and differs by country. This tax can also be referred to as corporation tax or company tax and is a tax on the income of some types of corporations. Company income tax is often decided like taxable income for individuals but sometimes the corporate tax rates can differ. Some countries tax companies on income and when the business pays a dividend. Sometimes businesses may not have to pay any tax.
There are some countries that do not have a corporate income tax rate but the companies are required to pay other types of taxation. In some countries, multinationals (MNCs) pay a potential tax rate of between 5% and 15% conditional on market cap.
US Claims the Highest Corporate Tax Rate
The foremost corporate tax rate in the world belongs to the US. At 40% the highest-ranking corporate tax rate the US has motivated many industries to “invert”. Inversion of US businesses means that a business buys a foreign subsidiary and relocates its main office (on paper at least) to that country where it benefits from a reduced tax rate. Some have called this practice “positively un-American.”