Why paying taxes is easy in Canada

This year Canada placed 8th overall when it came to the ease of paying taxes for businesses, according to Paying Taxes 2013, a joint study from PwC, the World Bank and the International Finance Corporation (IFC) that looks at tax regimes in 185 economies.

Paying Taxes 2013 measures the overall ease of paying taxes for a hypothetical small to medium-sized domestic business by assessing the number of tax payments per year and the time taken to compile returns and submit tax payments. It also calculates companies’ total tax liability as a percentage of pre-tax profits.

One of the biggest reasons for Canada’s top-10 position is our competitive Total Tax Rate (TTR), which has dropped from 49.1% in 2004 to 26.9% in 2011.

The report also finds:

• The highest number of payments is now made in Africa (37) and the lowest in North America (8.3)
• Economies in the Central Asia and Eastern European region have shown the largest fall in both the time to comply (200 hours) and number of payments (22.2).
• The Asia-Pacific economies tend to have TTRs below the world average and they have continued to fall as they look to compete in the world economy.
• Firms in the United Arab Emirates face the lightest administrative burden in paying taxes. They must only make four payments a year and spend 12 hours doing so.

Staff

The staff of Advisor.ca have been covering news for financial advisors since 1998.