What contributes to a robust tax environment for businesses? According to The Tax Foundation’s International Tax Competitiveness Index, it’s over forty variables across the categories of corporate taxes, consumption taxes, property taxes, individual taxes, and international tax rules.
This year’s Index ranks New Zealand the second most competitive of the 34 OECD countries considered. Australia also comes in high with a rank of fifth. This indicates these two countries promote a high degree of international business competitiveness and are attractive environments for foreign investment. Both rank well above other prominent jurisdictions such as the United Kingdom (21st) and the United States (30th).
New Zealand, for example, lacks inheritance taxes, payroll taxes, and general capital gains taxes. In response to global trends it has also lowered company and personal tax rates to 28% and 33% respectively.
These simple tax systems make it easier for companies to do business in Australasia. Both local businesses and inward investment can leverage this attractive feature.
See the full report on the competitiveness of OECD tax environments here.
By Emma Armitage, Business Analyst, BioPacific Partners