Asia Pacific corporate tax rates continue to trend lower
Data released from KPMG International shows that since 2009 the average Asia Pacific corporate tax rate has fallen from an average of 27.5 percent in 2009 to 27.0 percent in 2010. Meanwhile, the average VAT/GST rate for the region has remained steady at 10.8 percent.
According to Ayesha Macpherson, Head of Tax at KPMG in Hong Kong, governments in the Asia Pacific region are undertaking aggressive monetary and fiscal measures to respond to the global economic crisis of the last two years. This may help the region lead the world's recovery out of recession. "Given this environment, tax management will become much more important for companies as an urgent need for more revenue is pushing many governments to increase the tax take from indirect taxes and broaden the tax base for corporate income taxes," she comments.
The data represents the initial Asia Pacific region results of KPMG International's annual Corporate and Indirect Survey that will be launched later this year. It was released to coincide with KPMG's annual Asia Pacific Tax Summit, which took place at the Grand Hyatt in Hong Kong on 23-25 June.
At present, Japan has the highest corporate tax rate at 40.7 percent, followed by Pakistan and Sri Lanka both at 35 percent. On the opposite end is Macau (12 percent), Hong Kong (16.5 percent) and Singapore (17 percent). Both Fiji and Singapore have reduced their corporate tax rates (Fiji: 29 to 28 percent, Singapore: 18 to 17 percent).
China currently has the highest indirect tax rate at 17 percent, followed by Pakistan (16 percent) and Bangladesh (15 percent). Japan and Taiwan are at the lowest end of the scale at 5 percent, while Hong Kong does not have an indirect tax. China has endorsed a legislative plan to introduce a new VAT system by 2013.
To request a copy of our upcoming research on global tax rates, contact Tanya Jayasuriya.
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