Countries With the Highest and Lowest Corporate Tax Rates

Corporate tax rates vary widely among countries, from a high of 50% in the African nation of Comoros down to 0% in more than a dozen others. The average corporate tax rate globally is 23.37%. Here is how rates stack up around the world.

Countries With High Corporate Tax Rates 

While Comoros—a small and economically challenged nation off the eastern coast of Africa—tops the list for high corporate taxes, a number of others aren't far behind. Here's a list of the 10 countries with the highest corporate income tax rates, according to the Tax Foundation:

• Comoros 50%
• Suriname 36%
• Argentina: 35%
• Chad: 35%
• Colombia: 35%
• Cuba: 35%
• Equatorial Guinea: 35%
• Guinea: 35%
• Malta: 35%
• Sudan: 35%

Puerto Rico, a U.S. territory rather than an independent country, would also rank high, with a corporate income tax rate of 37.5%.

Countries With No Corporate Tax 

There are more than 15 countries, or self-governing territories, that have no corporate income tax at all. They include:

• Anguilla         
• Bahamas       
• Bahrain        
• Belize           
• Bermuda       
• British Virgin Islands 
• Cayman Islands         
• Guernsey       
• Isle of Man    
• Jersey
• Saint Barthelemy      
• Tokelau          
• Turks and Caicos Islands
• United Arab Emirates          
• Vanuatu
• Wallis and Futuna Islands

(Note that while Bahrain, Belize, and the United Arab Emirates (UAE) have no general corporate income tax, all three impose a tax on companies in the petroleum industry and, in the case of the UAE, also on foreign banks.)

Because of their 0% corporate tax, Bahamas, Bermuda, and the Cayman Islands are among the most popular countries for offshore investing, particularly for U.S. businesses. Companies often use legal maneuvers to divert their profits there and avoid paying higher taxes in their home countries.

The Bahamas offers an added tax advantage because its government doesn't tax profits, dividends, or personal income. Nor does it impose capital gains, inheritance, gift, or unemployment taxes. It does however, charge business licensing fees and some property taxes, as well as a value-added tax (VAT). In addition, foreign investors enjoy a shield of privacy. The country also has an easily accommodating framework for setting up business structures that can take advantage of the 0% corporate tax rate.

Bermuda and the Cayman Islands offer similar advantages. Bermuda also doesn't tax income, dividends, or capital gains. The same applies to the Cayman Islands. There, businesses pay a licensing fee to the government rather than corporate taxes.

Countries With Low Corporate Tax Rates

In addition to countries with no corporate taxes, many countries in Eastern Europe and elsewhere have considerably lower than average corporate tax rates, including:

• Barbados: 5.5%
• Turkmenistan: 8%
• Hungary: 9%
• Andorra: 10%
• Bosnia and Herzegovina: 10%
• Bulgaria: 10%
• Republic of Kosovo: 10%
• Kyrgyzstan:10%
• Former Yugoslav Republic of Macedonia: 10%
• Paraguay: 10%
• Qatar: 10%
• Timor-Leste: 10%

By region, Asia has the lowest average corporate tax rate at 19.52%, and South America the highest, at 28.38%. Europe averages 19.74%, while North America averages 25.33%, and Africa 27.60%.

How the U.S. Corporate Tax Rate Compares 

The U.S. corporate income tax rate is currently a flat 21%, somewhat below the worldwide average of 23.37%. Prior to the 2017 passage of the Tax Cuts and Jobs Act (TCJA), it was 35%.

The Tax Foundation ranks the U.S. 81st out of 225 jurisdictions in terms of corporate taxes, once state taxes are factored in.

Corporate income is taxed on the state level in 44 states. Those taxes range from North Carolina's flat rate of 2% to New Jersey's top bracket of 11.5%. In some states, like New Jersey, corporate taxes are graduated, with different brackets for different levels of income.

Added together, federal and state corporate income taxes range from 25%, again in North Carolina, to 30%, again in New Jersey, with many states in the 25% to 29% range. Determining the combined rate is not as simple as adding the state's tax rate to the 21% federal rate because state taxes are deductible on the company's federal tax return, effectively reducing the federal tax rate.

States that don't have a corporate income tax may instead have a gross receipts tax, which taxes the company's gross sales—rather than its income after deducting business-related expenses and other costs. Some states have both types of taxes. Only South Dakota and Wyoming have neither.

Besides the states, some local governments impose taxes on corporations.

The Bottom Line

Corporate taxes are one of the ways that nations around the world raise money to support their government operations. Corporate tax rates vary considerably from one country to the next, with some countries using attractively low rates to lure businesses and investors.