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EY - the outlook for global tax policy in 2014

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Across the world, many of the tax policies unveiled for 2014 indicate an increasing tax burden across virtually every type of tax. The EY 2014 global tax policy guide summarizes countries’ tax policy outlook for 2014. Use the map or the menu to see the relevant country guide at: http://www.ey.com/2014taxpolicyoutlook

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The outlook for global tax policy in 2014 61 jurisdictions surveyed Headline rate of taxation changes How many countries have announced changes to headline rates of taxation for 2014? 3 reported increase 10 48 reported decrease countries reported no change Globally, Finland had the largest decrease (24.5% to 20%, an -18.4% decrease), while Israel had the largest increase (25% to 26.5%, a 6.0% increase) in the CIT rate. France India Israel Denmark Dominican Republic Finland Guatemala Japan Norway Portugal Slovak Republic United Kingdom Vietnam Corporate income tax (CIT) rate Israel India -2.0% Norway Japan Vietnam 5.3% 4.8% 6.0% France -3.4% -3.6% -4.3% Dominican Republic UK -6.2% Slovak Republic -8.0% -8.7% Portugal -9.7% -18.4% Guatemala -12.0% Denmark 2 Guatemala Norway Mexico Sweden 2 reported decrease countries reported no change Globally, Guatemala had the largest decrease (31% to 28%, a -9.7% decrease), while Mexico had the largest increase (30% to 35%, a 16.7% increase) in the PIT rate. Mexico reported increase 57 Top marginal personal income tax (PIT) rate Finland 3.5% 16.7% -3.6% Sweden Norway -9.7% Japan Guatemala 3 56 Globally, only Puerto Rico has so far announced a VAT decrease for 2014 (7% to 6.5%, an -7.1% decrease), while Japan’s increase from 5% to 8% represents a 60% increase. Overall direction of tax burden What is the overall direction of the tax burden in 2014? CIT burden reported higher 16 reported no change 11 4 reported mixed reported lower 2.0% 13.3% 60.0% Luxembourg -7.1% VAT/GST/ sales tax burden 13 reported higher 30 France Puerto Rico PIT burden 16 reported mixed Mixed Puerto Rico countries reported no change 4 Higher 1 reported decrease France Japan Luxembourg Standard VAT/GST/ sales tax rate* reported increase 34 reported no change 7 reported lower reported higher 3 reported mixed 42 reported no change 3 reported lower No change Lower How are countries manipulating their corporate income tax base in 2014? 24 15 12 Changes to (or focuses on) tax enforcement, including disclosure, substance requirements, GAAR Changes to R&D incentives Changes to interest/business expense deductibility (including payments to low tax jurisdictions) 12 12 11 Changes to other business incentives (i.e., non R&D) Changes to withholding taxes Significant transfer pricing changes 10 9 6 Decreasing the statutory CIT rate Changes to the tax treatment of losses Changes to CFC rules/ thin capitalization To learn more about EY’s 2014 outlook for global tax policy, please visit ey.com/2014taxpolicyoutlook All are based upon a sample of 61 jurisdictions. *Hong Kong does not levy VAT/GST. © 2014 EYGM Limited. All Rights Reserved. ED None. 1401-1183067

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EY - the outlook for global tax policy in 2014

  • 1. The outlook for global tax policy in 2014 61 jurisdictions surveyed Headline rate of taxation changes How many countries have announced changes to headline rates of taxation for 2014? 3 reported increase 10 48 reported decrease countries reported no change Globally, Finland had the largest decrease (24.5% to 20%, an -18.4% decrease), while Israel had the largest increase (25% to 26.5%, a 6.0% increase) in the CIT rate. France India Israel Denmark Dominican Republic Finland Guatemala Japan Norway Portugal Slovak Republic United Kingdom Vietnam Corporate income tax (CIT) rate Israel India -2.0% Norway Japan Vietnam 5.3% 4.8% 6.0% France -3.4% -3.6% -4.3% Dominican Republic UK -6.2% Slovak Republic -8.0% -8.7% Portugal -9.7% -18.4% Guatemala -12.0% Denmark 2 Guatemala Norway Mexico Sweden 2 reported decrease countries reported no change Globally, Guatemala had the largest decrease (31% to 28%, a -9.7% decrease), while Mexico had the largest increase (30% to 35%, a 16.7% increase) in the PIT rate. Mexico reported increase 57 Top marginal personal income tax (PIT) rate Finland 3.5% 16.7% -3.6% Sweden Norway -9.7% Japan Guatemala 3 56 Globally, only Puerto Rico has so far announced a VAT decrease for 2014 (7% to 6.5%, an -7.1% decrease), while Japan’s increase from 5% to 8% represents a 60% increase. Overall direction of tax burden What is the overall direction of the tax burden in 2014? CIT burden reported higher 16 reported no change 11 4 reported mixed reported lower 2.0% 13.3% 60.0% Luxembourg -7.1% VAT/GST/ sales tax burden 13 reported higher 30 France Puerto Rico PIT burden 16 reported mixed Mixed Puerto Rico countries reported no change 4 Higher 1 reported decrease France Japan Luxembourg Standard VAT/GST/ sales tax rate* reported increase 34 reported no change 7 reported lower reported higher 3 reported mixed 42 reported no change 3 reported lower No change Lower How are countries manipulating their corporate income tax base in 2014? 24 15 12 Changes to (or focuses on) tax enforcement, including disclosure, substance requirements, GAAR Changes to R&D incentives Changes to interest/business expense deductibility (including payments to low tax jurisdictions) 12 12 11 Changes to other business incentives (i.e., non R&D) Changes to withholding taxes Significant transfer pricing changes 10 9 6 Decreasing the statutory CIT rate Changes to the tax treatment of losses Changes to CFC rules/ thin capitalization To learn more about EY’s 2014 outlook for global tax policy, please visit ey.com/2014taxpolicyoutlook All are based upon a sample of 61 jurisdictions. *Hong Kong does not levy VAT/GST. © 2014 EYGM Limited. All Rights Reserved. ED None. 1401-1183067