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  • Service: Tax, Global Indirect Tax, Mergers & Acquisitions, Global Compliance Management Services, International Tax
  • Type: Business and industry issue
  • Date: 4/19/2013

Navigating change – corporate & indirect tax rates in Asia Pacific 

Continuing the trends seen in past years, corporate and indirect tax rates are in a state of flux as governments seek to hike indirect tax rates to attract investment. Here is a snapshot of significant tax rates movements in the Asia Pacific region.

China – Asia Pacific’s highest indirect tax rate

In China, the standard VAT rate is 17 percent. With the first stage of its VAT pilot program for the modern services and transportation sectors now implemented in many commercial centers, the construction, real estate and financial services sectors are expected to be the next to transition from China’s business tax to VAT, likely in the second half of 2013.

Japan – Asia Pacific’s highest general corporate tax rate/lowest indirect tax rate

To finance recovery from the 2011 earthquake, the corporate tax rate rose to 38.01 percent for three years (from 1 April 2012), and then drops to 35.64 percent. Japan’s consumption tax is scheduled conditionally to rise from 5 percent to 8 percent on 1 April 2014 and to 10 percent on 1 October 2015.

Taiwan – Asia Pacific’s lowest general indirect tax rate

In Taiwan, the indirect tax rate is 5 percent. Once Japan’s rate rises in 2014, Taiwan will have the lowest indirect tax rate among those Asia Pacific countries that impose indirect taxes.

India

The central and state governments continue talks toward a nation-wide VAT to replace a number of indirect taxes, but, despite an April 2013 target date, no details or implementation plans have been agreed upon to date.

Thailand

The Thai corporate tax rate dropped to 23 percent (from 30 percent) for the 2012 tax year, and to 20 percent for the 2013 and 2014 tax years, where it is expected to hold. The temporary reduction of Thailand’s VAT rate to 7 percent (from 10 percent) is further extended until 30 September 2014.

Malaysia

VAT or GST has been proposed at a general rate of 4 percent, but its fate now awaits the outcome of elections.

Australia

At 30 percent, Australia’s general corporate rate is higher than many of its more developed neighbors (e.g. Singapore at 17 percent; Hong Kong at 16.5 percent). To date, however, the Australian government has not bowed to pressure from business to increase its GST rate (10 percent) to achieve a more competitive corporate tax rate or to fund the abolition of numerous 'nuisance' taxes.

 

View and compare tax rates from around the world via KPMG's Tax Rates Online.


 

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Corporate and Indirect Tax Survey

Corporate and Indirect Tax Survey
The annual KPMG International Corporate and Indirect Tax survey compares corporate and indirect tax rates from over 125 countries.
 

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