Paying taxes now easier for firms

Paying taxes now easier for firms

The time it takes an average company to meet its tax obligations dropped by four hours last year, according to the Paying Taxes 2015 study.



By Staff Report

Published: Tue 25 Nov 2014, 12:07 PM

Last updated: Tue 7 Apr 2015, 10:40 PM

Dubai: Paying taxes has become easier over the past year for medium-sized companies around the world, the latest report from the World Bank Group and PwC finds.

The time it takes an average company to meet its tax obligations dropped by four hours last year, according to the Paying Taxes 2015 study. The report also revealed that the total amount the average company paid in taxes and the number of payments it made also declined in the past year.

The Paying Taxes 2015 report finds that on average, the standard company studied has a total tax rate (as defined under the doing business methodology) of 40.9 per cent of commercial profits. It makes 25.9 tax payments per year and takes 264 hours to comply with its tax requirements.

Over the ten years of the study, 78 per cent of the 189 economies covered in the report have made significant changes to their tax regimes at least once. The time and the number of payments required to comply with tax obligations have fallen over the ten-year period, as has the average total tax rate.

The fastest rate of decline for the total tax rate occurred during the financial crisis from 2008-2010 with an average decline of 1.8 percentage points per year during that period. The rate of decline then started slowing in 2011.

According to the study the Middle East continues to be the least demanding tax framework, with an average Total Tax Rate of 24 per cent, 16.8 average number of payments and an average time to comply of 160 hours.

Qatar and UAE share an equal first place in the overall tax ranking, with a Total Tax Rate of 11.3 per cent, 41 hours and four payments for Qatar and a Total Tax Rate of 14.8 per cent, 12 hours and four payments for the UAE.

business@khaleejtimes.com


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