Paul L. Caron
Dean



Thursday, October 25, 2018

2018 International Tax Competitiveness Index

ITCA2018 International Tax Competitiveness Index:

The International Tax Competitiveness Index ( ITCI ) seeks to measure the extent to which a country’s tax system adheres to two important aspects of tax policy: competitiveness and neutrality. A competitive tax code is one that keeps marginal tax rates low. In today’s globalized world, capital is highly mobile. Businesses can choose to invest in any number of countries throughout the world to find the highest rate of return. This means that businesses will look for countries with lower tax rates on investment to maximize their after-tax rate of return. If a country’s tax rate is too high, it will drive investment elsewhere, leading to slower economic growth. In addition, high marginal tax rates can lead to tax avoidance. ...

To measure whether a country’s tax system is neutral and competitive, the ITCI looks at more than 40 tax policy variables. These variables measure not only the level of taxes, but also how taxes are structured. The Index looks at a country’s corporate taxes, individual income taxes, consumption taxes, property taxes, and the treatment of profits earned overseas. The ITCI gives a comprehensive overview of how developed countries’ tax codes compare, explains why certain tax codes stand out as good or bad models for reform, and provides important insight into how to think about tax policy.

Table 1: 2018 International Tax Competitiveness Index Rankings
Country Overall Rank Overall Score Corporate Tax Rank Individual Taxes Rank Consumption Taxes Rank Property Taxes Rank International Tax Rules Rank
Estonia 1 100.0 1 1 9 1 6
Latvia 2 86.0 2 2 27 6 5
New Zealand 3 83.0 18 3 6 3 15
Luxembourg 4 80.5 21 17 2 18 1
Netherlands 5 77.5 19 8 12 10 3
Switzerland 6 77.0 6 9 1 34 8
Sweden 7 75.0 7 20 16 7 7
Australia 8 72.2 27 19 7 4 17
Czech Republic 9 69.6 8 4 33 13 9
Austria 10 69.6 15 21 10 9 13
Slovak Republic 11 69.4 10 6 32 2 27
Turkey 12 68.8 17 5 24 17 10
Hungary 13 68.4 3 15 34 26 2
Finland 14 67.7 5 27 14 11 18
Norway 15 66.2 13 11 18 24 14
Germany 16 65.3 24 28 11 14 11
Korea 17 64.4 28 10 5 25 31
Canada 18 64.0 22 23 8 20 22
Belgium 19 63.8 23 7 25 23 12
Ireland 20 63.7 4 33 23 12 21
Denmark 21 63.7 14 30 17 8 23
Slovenia 22 63.6 12 12 28 21 16
United Kingdom 23 63.1 16 24 22 30 4
United States 24 61.5 20 26 4 28 32
Iceland 25 60.2 11 31 19 22 20
Japan 26 59.5 35 25 3 29 25
Spain 27 57.4 26 18 15 31 19
Mexico 28 57.2 31 13 26 5 34
Greece 29 51.9 25 14 30 27 29
Israel 30 51.7 29 35 13 15 33
Chile 31 48.3 30 22 29 16 35
Portugal 32 48.2 33 29 31 19 28
Poland 33 47.7 9 16 35 32 30
Italy 34 46.9 32 32 20 33 26
France 35 41.4 34 34 21 35 24

The United States adopted a comprehensive tax reform package that included a reduction of the corporate income tax rate from 35 percent to 21 percent, improvements to expensing of capital investments, and rate changes for the personal income tax. As a result, the U.S. improved its ranking from 28th to 24th

https://taxprof.typepad.com/taxprof_blog/2018/10/2018-international-tax-competitiveness-index.html

Tax, Think Tank Reports | Permalink

Comments

Estonia is # 1. Danske Bank Estonia was laundering hundreds of millions of Euros (possibly as much as 200 billion Euros). Just a coincidence, of course!

Posted by: John Saunders | Oct 25, 2018 12:45:28 PM