Remaining competitive on the global stage for small businesses
Paying Taxes, now in its 13th edition, continues to be a unique study from PwC and the World Bank group, which investigates and compares tax regimes across 190 economies worldwide. A young, growing business was used as a case study to measure the relative ease of paying taxes, looking at the time the company requires to prepare, file and pay its taxes, the number of taxes it has to pay, the method of payment and the total tax liability as a percentage of its commercial profits.
This year’s publication focuses on how new tax software, real-time reporting systems and data analytics are changing the way companies meet their tax compliance obligations and how tax authorities monitor and enforce those obligations. The report examines the connection between labour and income taxes, the changing nature of work and the resulting impact on revenue streams. We also look at some of the different approaches taken by tax authorities to tax audits, and to the provision of training for both tax auditors and taxpayers.
This year’s report once again shows that Canada remains an excellent place for small- and medium-sized businesses (SMBs) to operate. It identifies the favourable tax climate and incentives that set up Canadian entrepreneurial ventures for success. For Canada, the study shows small businesses will continue to benefit from a reduction in income tax rates (for taxation years starting in 2019) and government investment in supportive research and development tax policies.
But for Canada to remain competitive on the global stage and continue to be an attractive place for large, multinational firms to do business, the federal government will need to review the corporate taxation system, especially in light of enacted US tax reforms and the United States-Mexico-Canada Agreement (USMCA). These changes have contributed to increased uncertainty for Canadian organizations doing business south of the border, with questions around the implications of having US subsidiaries and Canadian staff working in the United States. There are also questions about the impact on cross-border trade given the current US government’s more protectionist attitude than previous administrations.
North America has the lowest number of payments, as all three countries—Canada, Mexico and the United States—have online filing and payment systems for all taxes.
The average time to comply for North America remained unchanged in 2017, at 182 hours.
The regional average for the time to correct a corporate income tax return and comply with any resulting reviews is 12.2 hours.
In North America, the average number of payments, at 8.2, remains the lowest of any region. All three economies in this region have fully implemented electronic filing and payment, which help to achieve the low average.
PwC and the World Bank Group present the study results and answer the audience’s questions on the findings.
Explore current and historical tax data from all 14 years of the study to find the results for your economy.
You can compare individual economies, geographic regions and economic regions for any year since 2004 and save your results.