These are the conclusions of the latest tax report from KPMG International, the 2015 Global Tax Rate Survey. Drawing on information from KPMG member firms in 145 countries, the survey shows that while tax rates in general are not changing very fast, governments are moving to widen the tax base, increasing the range of goods, services and activities that can be taxed to bring in more revenue. At the same time, tax concessions introduced during recession to support industries and encourage consumers to spend are being withdrawn.
Simply raising income tax rates is difficult when companies and people can easily make comparisons between tax rates in different countries. Governments are having to find different ways to increase their revenue.
The survey shows that social security rates have been increasing around the world. Global average social security rates for employers and employees are now higher than they have been at any time in the past seven years.
There has also been a quiet movement in favor of indirect taxes -- Value Added Tax (VAT) or Goods and Services Tax (GST). With new VATs being introduced this year in Malaysia and the Bahamas, and plans for a similar tax in India and the Gulf States, VAT is now in more than 160 countries.
The economic and social drivers for higher taxes comes at a time when a major international effort to update and modernize tax systems is reaching completion. Initiated by the Organisation for Economic Co-operation and Development (OECD) in 2013 and endorsed by the G20, the OECD’s Action Plan to address Base Erosion and Profit Shifting (BEPS) includes 15 key areas to encourage more transparency, better reporting and more co-operation between countries in which multinational companies operate. On 5 October 2015, the OECD issued a final package of reports as well as a plan for follow-up work and a timetable for implementation. While implementation and timing will vary across borders—and some European jurisdictions have already incorporated aspects of the plan—the final OECD release marks a crucial shift from the recommendation and consultation phase of BEPS to legislation and implementation. 2015 Global Tax Rate Survey
Full details of KPMG's 2015 Global Tax Survey, including detailed information on tax rates and systems for each of 145 countries including Denmark, can be found here.