This is the sixth year that the Global Indicators and Analysis group within the World Bank and IFC and PwC have produced the Paying Taxes report. Paying Taxes 2012: The Global Picture measures the ease of paying taxes in 183 economies around the world.
The report covers the cost of taxes borne by the case study company as well as the administrative burden of tax compliance for the firm. Both are important for business. They are measured using three sub-indicators: the Total Tax Rate (the cost of all taxes borne), the time needed to comply with the major taxes (profit taxes, labour taxes and mandatory contributions, and consumption taxes), and the number of tax payments.
Paying Taxes measures all taxes and contributions mandated by government at any level (federal, state, or local) as they apply to the standardised business. The Total Tax Rate sub-indicator measures the impact of taxes and contributions that are borne by the company which impact the company’s financial statements. It includes corporate income tax, social contributions and labour taxes paid by the employer, property taxes, property transfer taxes, dividend tax, capital gains tax, financial transactions tax, waste collection taxes, vehicle and road taxes, and other taxes and mandatory fees. The other two sub-indicators, the time to comply and number of payments, measure taxes borne and taxes collected, and so include taxes and contributions withheld or collected, such as sales tax or value added tax (VAT).