Date:23/05/2006 URL: http://www.thehindubusinessline.com/2006/05/23/stories/2006052303900800.htm

Back EU tops in co tax rate cut: KPMG

Our Bureau

Hyderabad, May 22

Company tax rates across Europe are being driven steadily down by a combination of competition amongst EU member states for jobs and capital, and economic liberalisation, according to KPMG International's latest global corporate tax rates survey.

Of the 86 countries surveyed, the majority had either kept their tax rates unchanged since 2004, or had reduced them. The largest reductions were in Barbados (-5 per cent to 25 per cent), Israel (-3 per cent to 31 per cent) and India (- 2.9 per cent to 33.66 per cent).

The countries with the highest tax rates were Japan with 40.69 per cent and the US with 40 per cent. Cayman Islands had zero per cent corporate tax rate.

The Global Head of KPMG's Tax practice, Mr Loughlin Hickey, in a statement said, "The accession of 10 new members to the EU and the efforts of the EU judicial system to break down barriers to free movement of capital, seem to have combined to increase tax competition among EU member states. There is a clear contrast with other parts of the world where borders are less permeable, but even so, the global trend seems to be stable or declining tax rates."