The lowest corporate tax rates are known to be found in smaller countries to attract investment from multinational corporations and foreign firms.
In fact, multinationals sheltered $1 trillion in profits in tax havens in 2022 alone. Many of these countries have corporate taxation rates of 0%, while others have rates falling around 5%. By comparison, the global average corporate tax rate stands at 23.5%.
The above graphic, from Pranav Gavali, via Visual Capitalist, shows where corporate taxation rates are the lowest as of 2023.
Ranked: The Top 10 Lowest Corporate Taxation Rates
Below, we rank the countries with the lowest taxation rates for corporations, based on data from the Tax Foundation. Countries with tax rates of 0% are not included:
Perhaps as no surprise, Barbados ranks top on the list, a tax haven where American corporations have transferred profits that exceed the country’s entire GDP.
Like the U.S., many big Canadian companies—from grocery giant Loblaws to Petro-Canada—shelter profits in the country thanks to a tax treaty signed in 1980. Overall, the Tax Justice Network estimates that $62 million in profits are shifted into the country across global multinational companies annually.
With the lowest rate in the Middle East, UAE ranks fourth on the list. For the first time ever in 2023, the country increased its corporate tax rate from 0% to 9% to better align with the international push in raising corporate tax rates. This also allows the country to diversify revenues, which are heavily concentrated in the energy sector.
Compared to 1980, tax rates have fallen across the board. We can see that in 1980, Hong Kong had the lowest rate, which stood at 17% to encourage business investment.
Overall, 91% of countries across 225 jurisdictions have corporate tax rates under 30% today.
