Tax Report: Luxembourg ranks first within the EU
Luxembourg has confirmed its reputation as a competitive country to do business from a tax perspective. The country ranks first within the European Union for its total tax rate and the time necessary to comply with filing obligations. These data are taken from the latest report “Paying Taxes 2010-the global picture “from PricewaterhouseCoopers and The World Bank Group. The study measures the ease of paying taxes across 183 economies worldwide by assessing both the cost of taxes and the administrative burden of tax compliance.
The analysis criteria used in the report were threefold: Total Tax Rate, time to comply with the filing obligations and the number of tax payments. PricewaterhouseCoopers points out that within the countries having a high Human Development Index (HDI) such as Switzerland, Ireland, Hong Kong and Singapore, the Grand Duchy presents both the lowest Total Tax Rate (20,9%, 17th position worldwide) and the shortest time to comply ( 59 hours, 6th position worldwide).
This year’s study was conducted against the backdrop of a global recession, which has meant falling tax revenues around the world and the need for governments to make difficult tax policy choices. According to PwC, the tax reforms remain high on governments’ agendas. In the past five years, 171 reforms affecting the Paying Taxes indicator in 104 economies around the world have been recorded.
Many reforms are aimed at simplifying the tax law and making it easier for firms to comply with regulations. The ability to pay and file electronically has a significant positive impact on the “number of payments” indicator.
PwC concludes that the tax system should encourage, not discourage business growth. Higher taxes should contribute to improving the quality of life for citizens, and tax administration should be as professional and efficient as possible.