Taxation

"Paying Taxes 2018" report

The World Bank and PwC have published the 12th edition of the "Paying Taxes" report, which analyses the complexity of tax systems in 190 countries worldwide.

taxIn the latest edition of the "Paying Taxes" study, Luxembourg is ranked 21st out of 190, with a score of 87.37. The aim of the report is to gauge the complexity of the national tax systems for companies. Qatar, the United Arab Emirates and Hong-Kong currently top this global ranking. As for our neighbours, Germany ranks 41st (82.14), Belgium 59th (77.69), France 54th (78.55) and the Netherlands 20th (87.59).

Four indicators to measure complexity

This report does not only take into account the tax paid, but also the time companies need to comply with their tax obligations. The analysis is based on the following four indicator categories:

  • The total tax burden effectively borne by companies, i.e. the "Total tax and contribution rate" (TTCR);
  • The time needed for companies to comply with all of their tax requirements;;
  • The total number of payments made by companies to the public authorities;
  • The interaction between companies and the tax authorities in the event of a VAT refund or a request to correct an error in a corporate income tax return.

In the first category- the total tax and contribution rate (TTCR) - Luxembourg has a rate of 20.5% and ranks first in the EU. In the second category - the time needed to comply with tax obligations - Luxembourg ranks third in the EU with an average hourly rate of 55 hours. As regards the number of payments to be made by companies, the Luxembourg tax system requires 23 payments in total. Finally, in the fourth category - the interaction between companies and the tax authorities in the event of a VAT refund or a request to correct an error in a corporate income tax return - Luxembourg ranks in the middle of the EU table with a score of 83.8/100..

(Article written by the editorial team of the luxembourg.lu portal - Source: Observatory for Competitiveness)
  • Updated 06-12-2017