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Competitive Alternatives 2012 - Focus on Tax 

Compare tax competitiveness in 14 global economies

 

What factors impact your company’s tax burden in the countries in which you do business?

 

Competitive Alternatives 2012 – Focus on Tax [PDF 1.62MB] shines a spotlight on 14 countries – including BRIC countries Brazil, Russia, India and China – and assesses the general tax competitiveness of 113 urban areas, with an emphasis on 55 major international cities.

 

See the interactive graphic below for highlights of the report.

Canada holds the lowest effective rate for corporate income taxes, a competitive rate of 7.3 percent after allowing for relevant tax incentives.
The United States sees a large spread in tax burden between cities due to the significance of state and local taxes - the spread between Cincinnati and San Francisco is 25.8 percent.
Mexico's highly centralized tax system results in a low variation in tax burden between cities (1.4 percentage points between Monterrey and Mexico City).
Brazil's high statutory labor costs and other corporate taxes both impact its results - ranking 11th overall among 15 countries.
The United Kingdom has seen a drop in its TTI of 14.8 points from 2010 to 2012 - the largest reduction in tax burden among the countries compared.
France has the highest TTI ranking for Corporate Services (244.2 points) due to the effect of high statutory labor costs.
The Netherlands also enjoys a low variation in tax burden between its cities - tax costs in Amsterdam and Rotterdam vary by only 0.5 percent - due to Netherlands' strongly centralized tax system.
Germany ranks 9th overall with a Total Tax Index of 122.0 - representing tax costs 22 percent higher than the US.
Russia performs well in the digital sector, where it ranks 3rd - ahead of its 5th place overall ranking.
China ranks second lowest for tax costs in the manufacturing sector, holding a TTI of 51.2
Japan ranks 11th for its TTI in Research and Development (R&D) - helped by an income tax credit of 8-12 percent on R&D expenditures.
India ranks first overall with a (Total Tax Index) TTI of 49.7 points. This is largely due to India's low statutory labour costs.
Italy has the second largest change in TTI among the countries studied (an increase of 23.3 points) due in part to the expiry of economic stimulus tax credits.
Australia sees the largest change in TTI between 2010 and 2012 with an increase of 44.3 points, in part due to the strong appreciation of its dollar.

 

Canada named second most competitive tax market

 

Saskatoon had the lowest TTI among all the Canadian cities studied – 43.8.
Vancouver followed Fredericton with a TTI of 49.2.
Prince George came in 10th place with a TTI of 54.2.
Calgary ranked 8th with a TTI of 50.7.
Edmonton followed Saskatoon with a TTI of 44.2.
Winnipeg ranked 12th with a TTI of 54.7.
The Windsor-Essex region follows closely after Toronto, with a TTI of 56.8.
Toronto ranked 13th with a TTI of 56.0.
Montreal ranked 15 out of the 16 Canadian cities studied, with a TTI of 62.1.
Quebec City took up last place amongst the Canadian cities studied with a TTI of 62.8.
Trois-Rivieres holds a TTI of 53.8.
Fredericton ranked 5th with a TTI of 45.5.
Moncton ranked third with a TTI of 45.1.
St. John's followed Moncton with a TTI of 45.4.
Charlottetown followed Prince George closely, with a TTI of 54.4.
Halifax maintains a TTI of 49.4.
Among the 14 countries studied, Canada ranked 2nd for its overall TTI of 59.1.

This report assesses the general tax competitiveness of 113 cities in 14 countries using a Total Tax Index (TTI) figure (which represents the total amount of taxes paid by corporations in a specific location, as compared to the US average at 100.0).

 

The report features 16 Canadian cities among the 113 studied worldwide. Check out how they fare in the interactive graphic above.

 

Canada is the second most tax competitive country after India, according to the study which also focuses on Australia, France, Germany, Italy, Japan, Mexico, the Netherlands, the United Kingdom and the United States.

 

Competitive Alternatives 2012 – Focus on Tax [PDF 1.62MB] report is a supplement to the 2012 edition of Competitive Alternatives – KPMG's guide to international business location costs.

 

Focus on Tax on your iPad or BlackBerry

 

You can now access Competitive Alternatives 2012 – Focus on Tax wherever you are through KPMG's Tax App.

Elio Luongo

Elio Luongo

Canadian Managing Partner, Tax

416-777-3586

What is TTI?

Competitive Alternatives 2012 – Focus on Tax compares total tax costs between countries and cities using a Total Tax Index (TTI) for each location. The TTI is a measure of the total amount of taxes paid in a specific location by a corporation, as compared to the US average at 100.00.