[kintamanimatt]

It appears to be the second highest[0], second only to the UAE's 55%! The global average appears to be about 23.57%.

KPMG state that the US corporate income tax is approximately 40% with the following reasoning:

"The marginal federal corporate income tax rate on the highest income bracket of corporations (currently above USD 18,333,333) is 35%. State and local governments may also impose income taxes ranging from 0% to 12%, the top marginal rates averaging approximately 7.5%. A corporation may deduct its state and local income tax expense when computing its federal taxable income, generally resulting in a net effective rate of approximately 40%. The effective rate may vary significantly depending on the locality in which a corporation conducts business. The United States also has a parallel alternative minimum tax (AMT) system, which is generally characterized by a lower tax rate (20%) but a broader tax base."

[0] http://www.kpmg.com/global/en/services/tax/tax-tools-and-res...

[judk]

Note that the corporate income tax is on profit, not revenue. Personal income tax is on revenue, minus some limited deductions.

Money reinvested or paid to employees is not taxed. Furthermore, corporations pay no sales or income tax on value added inside the corporation for the benefit of the corporation, unlike if the corporation were split into several independent companies.

[lionhearted]

Tangent: UAE is actually effectively 0% corporate tax rate for most industries. From the notes on that KPMG link --

> Although in theory these emirate-level decrees impose tax on the income of all corporate entities, in practice tax is currently only enforced on foreign oil companies engaged in the exploration and production of oil and branches of foreign banks. Although the tax rate applicable to oil companies is generally 55% of operating profits, the amount of tax actually paid by such companies is based on a rate agreed in individual concessions between the company and the respective emirate. This rate can range between 55% and 85%. Branches of foreign banks are subject to tax at 20% of their profits under the banking tax decrees.

They're trying to attract industry to move there. It's kind of pricey for small businesses to take advantage of though, since incorporation (if I remember correctly) costs $7000 once + something like $4000 per year, requires renting office space in a special economic region, and likewise establishing personal tax residence there also requires some mildly expensive registration procedure or other. For someone with a small business making upper-middle class income, the basically-equivalent-to-effective tax rate would probably be somewhere from 10% to 40%, but those are mostly fixed fees that would fall when revenue/income goes up.

[bedhead]

Yes, this is true and I excluded it for a reason. UAE has no personal income tax, property tax, or capital gains taxes. My guess is that it all evens out and then some.