Canada is a tax-friendly country
It is gratifying to report that Canada has the lowest business taxes of all the G7 countries, which include: Canada, France, Germany, Italy, Japan, the United Kingdom and the United States.
According to a KPMG special report on tax included in its Competitive Alternatives 2010, Canada has the second-lowest tax costs for business, only second to Mexico, which ranks No. 1. Canada has moved up from No. 3 since the last rankings were formulated in 2008.
The report assesses the general tax competitiveness of 95 cities in 10 countries (Australia, Canada, France, Germany, Italy, Japan, Mexico, the Netherlands, the United Kingdom, and the United States). The analysis focuses on 41 major cities with populations greater than 2 million, and compares the total tax burden faced by companies, including income tax, capital tax, sales tax, property tax, miscellaneous local business taxes, and statutory labor costs.
The report also compares the total tax cost between countries and cities using a Total Tax Index (TTI) score for each location, expressed as a percentage of total taxes paid by corporations in the US. A lower score is better since it means lower tax costs for businesses.
Among the countries studied, Mexico has the lowest TTI at 59.9; in other words, total tax costs in Mexico are 40.1 percent lower than in the US, which has a TTI of 100.0. Canada has a TTI of 63.9. The Netherlands, Australia, and the UK also have TTI ratings below the US. At the other end of the spectrum, France’s TTI of 181.4 signifies that its total tax costs are 81.4 percent higher than the US standard.
The report also compares tax costs between industries and these vary widely. Canada ranks No. 2 in manufacturing with a score of 67.7, compared to a score of 100 for the U.S.
Among the major international cities compared for tax competitiveness, Vancouver takes first place, Montreal fourth and Toronto fifth.