Corporaton Tax (Hansard, 3 July 1992)

§ Sir Thomas Arnold
To ask the Chancellor of the Exchequer what proportion of public sector receipts was accounted for by corporation tax in each of the fiscal years 1985 to 1992; what proportion of those figures was attributable to foreign companies paying tax in the United Kingdom; and what proportion of public sector receipts he has forecast to arise from corporation tax in 1992–93.
749W

§ Mr. Dorrell
The figures requested are given in the table. I regret that insufficient information is available to estimate the proportion of corporation tax receipts accounted for by foreign-owned companies.

Corporation tax receipts¹ as percentage of general government receipts

Year Percentage

1985–86 7.1

1986–87 8.4

1987–88 9.0

1988–89 9.7

1989–90 10.4

1990–91 9.9

1991–92 8.3

²1992–93 7.3

¹ including advance corporation tax

² FSBR forecast

§ Sir Thomas Arnold
To ask the Chancellor of the Exchequer what information he has on the levels of corporation tax or corresponding taxes in each EEC or Group of Seven country.

§ Mr. Dorrell
The current main tax rates on corporate income are given in the table.

Country Main national corporate in-come tax rate Per cent. Notes

Belgium 39

Canada 38 a. Rate for Canadian manufacturing income is 33 per cent.;

b. Less provincial tax credit of 10 per cent.

c. Plus 3 per cent, surcharge on federal tax;

d. Plus provincial corporate income tax (eg. Ontario; 14.5 per cent.) (13.5 per cent, on manufacturing income);

e. Effective total (in Ontario: 43.34 per cent.) (37.19 per cent. on manufacturing income).

Denmark 34 The 34 per cent, rate is conditional on payment of the tax in two instalments during the income year; otherwise 38 per cent.

France 34

Germany 50 a. 36 per cent, on distributed profits;

b. Plus local trade tax on corporate income—average rate about 20 per cent.— deductible for federal tax; effective total: approximately 60 per cent. (49 per cent, on distributed profits).

Greece 46 Rates are 35 per cent, or 40 per cent, for certain manufactur-ing companies.

Ireland 40 10 per cent, for manufacturing companies

Italy 36 Plus local corporate income tax at standard 16.2 per cent, rate, of which 75 per cent, is deductible for national tax, giving effective total of 47.8 per cent.

750W

Country Main national corporate in-come tax rate Per cent. Notes

Japan 37.5 a. Plus 2.5 per cent, surcharge on tax over Y4 million;

b. Plus local taxes on corporate income at varying rates;

c. Effective total: approximately 52 per cent.

Luxembourg 33 a. Plus 1 per cent, surcharge for the unemployment fund:

b. Plus local trade tax on corporate income at varying rates—typically 10 per cent. —deductible for national tax;

c. Effective total: approximately 40 per cent.

Netherlands 35

Portugal 36 Plus municipal surcharge—typically 10 per cent.—deductible for national tax, giving effective total of 38.3 per cent.

Spain 35 Plus 1.5 per cent, surcharge for the Chamber of Commerce, giving effective total of 35.525 percent.

United Kingdom 33

United States 34 a. Plus corporate income tax in most states (eg. 9.3 per cent, in California), deductible for federal tax:

b. Effective total (in California): 40.13 per cent.

In several of the above countries, lower tax rates apply to the income of small companies.

Corporation tax receipts¹ as percentage of general government receipts
Year	Percentage
1985–86	7.1
1986–87	8.4
1987–88	9.0
1988–89	9.7
1989–90	10.4
1990–91	9.9
1991–92	8.3
²1992–93	7.3
¹ including advance corporation tax
² FSBR forecast

Country	Main national corporate in-come tax rate Per cent.	Notes
Belgium	39
Canada	38	a. Rate for Canadian manufacturing income is 33 per cent.;
		b. Less provincial tax credit of 10 per cent.
		c. Plus 3 per cent, surcharge on federal tax;
		d. Plus provincial corporate income tax (eg. Ontario; 14.5 per cent.) (13.5 per cent, on manufacturing income);
		e. Effective total (in Ontario: 43.34 per cent.) (37.19 per cent. on manufacturing income).
Denmark	34	The 34 per cent, rate is conditional on payment of the tax in two instalments during the income year; otherwise 38 per cent.
France	34
Germany	50	a. 36 per cent, on distributed profits;
		b. Plus local trade tax on corporate income—average rate about 20 per cent.— deductible for federal tax; effective total: approximately 60 per cent. (49 per cent, on distributed profits).
Greece	46	Rates are 35 per cent, or 40 per cent, for certain manufactur-ing companies.
Ireland	40	10 per cent, for manufacturing companies
Italy	36	Plus local corporate income tax at standard 16.2 per cent, rate, of which 75 per cent, is deductible for national tax, giving effective total of 47.8 per cent.