- Highly Qualified Individuals
- Sustainability of Fiscal Policy
The BAK Taxation Index for corporations uses the EATR tax burden (i.e., effective average tax rate) of a successful investment as the most important indicator. For this, all relevant forms of taxations and tax regulations at a location are taken into account. The resulting tax burden is an important criterion in the location decision for profitable corporations.
BAK Taxation Index for Corporations 2017
Notes: Effective average tax rate (EATR) applicable to companies in Swiss cantons (calculated for the cantonal capital) and at international business locations (calculated for the economic capital) in % (cf. blue pillars or 4th column). In/decrease from 2015 figures in percentage points (cf. third column). In the case of the Swiss cantons, the chart presents the figures for all cantons involved in the project, as well as the Swiss minimum (NW, project participant), the Swiss maximum (GE) and the GDP-weighted average of all 26 cantons.
Source: ZEW / BAK Economics
The range of the EATR tax burden at the approximately 40 locations examined ranges from the most competitive Hong Kong (9.9 percent) to the least competitive New York in the United States (40.8 percent). In particular, generous depreciation regulations, where patents and machines can already be written off fully in the year acquired, reduce the assessment basis significantly and help Hong Kong attain its top ranking. In New York, high national income tax rates and unfavorable depreciation regulations drive the tax rates higher.
The range of scores for the Swiss cantons is good to very good in the competitive tax race. Of the ten top locations in our ranking, eight are held by Swiss cantons. At the top, just behind first place, are the cantons Nidwalden, Appenzell A.Rh., and Luzern. The Swiss cantons, which are home to the largest urban centers (Bern, Zürich, Basel, Geneva) have EATRs that are clearly above the national average but still below the international average.
The 2017 BAK Taxation Index average is at 29 percent. The GDP-weighted average is increased by the economically strong and high-tax capitals or urban centers, such as Madrid (27.8 percent), München (29.3 percent), Paris (34 percent) and New York (40.8 percent). For this reason, most of the locations evaluated find themselves below the BAK Taxation Index average.
The Eastern European countries (dark blue) are among the rather low-taxation countries in the BAK Taxation Index. The Scandinavian countries (light blue) occupy the middle, but their actual tax burdens are scattered much wider. The countries in the rest of Europe (blue), with the exception of Ireland (Dublin), belong to the countries with higher taxes. The Asian countries (yellow) we looked at are widely scattered over the ranking.
For tax rate comparaison between 2017 and 2015 see BAK Taxation Index 2017