Territorial and Worldwide Tax Systems in the OECD


Territorial Systems Transition Since 2000 Worldwide Systems Top Marginal Tax Rate
Australia Chile 20%
Austria Greece 20%
Belgium Ireland 12.5%
Canada Israel 24%
Czech Republic 2004 Korea 24.2%
Denmark Mexico 30%
Estonia 2005 United States 39.2%
Finland
France
Germany
Greece
Hungary
Iceland 2003
Italy
Japan 2009
Luxembourg
Netherlands
New Zealand 2009
Norway 2004
Poland 2007
Portugal
Slovak Republic 2004
Slovenia
Spain
Sweden
Switzerland
Turkey 2005
United Kingdom 2009

Unlike most OECD (Organization for Economic Co-operation and Development) nations, the United States taxes American companies on their business income earned in foreign countries.

In fact, while the U.S. has stood still on reform, a growing number of developed economies are transitioning to the modern international tax system (i.e. “Territorial Taxation”). Now, 28 of the 34 OECD nations (and all other G8 member countries), employ some form of territoriality, which is up from 17 just a decade ago.

According to the non-partisan Tax Foundation, every independent U.S. advisory board, working group, and federal agency tasked with exploring corporate tax reform has recommended that the U.S. pivot toward a territorial system. These include President Obama’s Economic Recovery Advisory Board, Council on Jobs and Competitiveness, National Commission on Fiscal Responsibility and Reform, among others.

OECHChart.pdf

 

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