Chili is the country of OECD in which corporate tax contributes the most to total tax revenue, 24.3% of the total with 2020 data, followed by Colombia (23%) and Mexico (20.1%).
They are the only members in which corporation tax (which taxes company profits) represents more than twenty% of total tax revenue, indicates the Organization for Economic Cooperation and Development (OECD) in its annual report on tax reforms published this Wednesday.
The relative weight of taxation on companies is highly variable between the countries of the organization, taking into account that it represents less than 5% in Estonia (4.9%), USA (4.9%)Italy (4.8%), Germany (4.3%)Hungary (3.6%)Greece (3.1%) and Lithuania (23%).
The authors of the report point out that there are various factors that explain these differences, such as the tax rate applied by countries, the breadth of the tax base, the degree of integration of companies or the phase of the economic cycle (when the situation is bad, companies have fewer profits and automatically pay less money).
Another important explanatory element is that in Latin American countries other taxes account for a much less important part of the collection, particularly income tax or Social Security contributions.
Furthermore, it must be taken into account that the relative weight of taxation in terms of gross domestic product (GDP) in these Latin American countries is one of the lowest in the OECD, well below the 34.1% on average across the organization as a whole in 2021.
In fact, that year Mexico was by far the one with the lowest tax rates of all, with a 16.7%lower than 17.8% of 2020.
In Colombia the percentage was 19.5% of GDP in 2021, seven tenths more than the previous year; in Chile it was 22.2% (2.8 points more) and in Costa Rica the 24.2% (1.5 points more).
Apart from the four Latin American countries, there were only two more that did not reach the threshold of the 25%: Ireland, with a 21.1% of GDP and Türkiye with a 22.8%.
Source: EFE
Source: Gestion
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