SMEs paying taxes in Canada have it easy
PwC, World Bank report puts Canada in the top 10 globally for ease of payment.
TORONTO — You may not think much of Canada’s system of taxation, but when it comes to paying, we have it pretty easy compared to other countries, according to the World Bank Group, IFC and PwC’s annual Paying Taxes report.
It measures the overall ease of payment for SMEs based on the number of tax payments per year, the time required to compile and submit returns, and a company’s total tax liability as a percentage of pre-tax profits. The good news for Canadian SMEs is we’re in the top 10 worldwide and the leader among G7 nations.
The report found on average Canadian companies had a total tax rate of 21.1% of commercial profits compared to a 40.8% rate globally. Mexico is 51.7% while the US (53 in the rankings) comes in at 43.9%.
In 2014, 46 economies increased their rate, while 41 decreased their tax burdens.
Canadian companies average eight tax payments per year and take 131 hours to comply with requirements. The global average is 25.6 payments and 261 hours. The report notes electronic filing continues to have a significant impact in easing the burden of tax administration.
Paying taxes became easier for medium-sized companies globally, but the focus has moved from reducing tax rates for companies to embracing technology and relieving their compliance burden.
The eight countries ahead of Canada are Qatar, UAE, Saudi Arabia, Hong Kong, Singapore, Ireland, Macedonia and Bahrain.
Click here for the report.