Canada is the most tax competitive country for biz

By Staff | July 12, 2016 | Last updated on September 15, 2023
2 min read

Canada once again tops the list as the most tax competitive country for business globally, finds a report by KPMG. Our country’s top international ranking is attributed to low corporate tax rates combined with moderate statutory labour costs, as well as low goods and services tax/harmonized sales tax. The U.K. ranks second, and the Netherlands third.

“This year’s report reinforces Canada’s position as an attractive option for businesses looking to relocate and expand their operations,” says Jodi Kelleher, National Leader, International Tax, KPMG. “As our economy continues to rebound, this provides more positive news for the provinces and cities featured in the study.”

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According to the study, all 17 of the featured Canadian cities have lower total effective tax costs when compared to the U.S.

Further, St. John, NFLD emerged as the most tax competitive city in Canada followed by Fredericton, NB and Moncton, NB. Toronto, Vancouver and Montreal held three of the top four spots among the 51 major international cities (with a population of two million or more) ranking first, second and fourth, respectively. Manchester, U.K. placed third.

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How Canada ranks

  • Canada’s federal Corporate Income Tax rate of 15% provides a very competitive base for corporate tax even when combined with provincial rates, which typically range from 10% to 15%. In comparison, the U.S. federal corporate income tax rate is approximately 34%.
  • Among other corporate taxes, Canada’s GST and HST sales taxes, which are generally refundable to businesses after Input Tax Credits are claimed, result in lower tax costs than the non-refundable sales taxes that apply in most US states. (Non-refundable sales taxes also apply to B.C., Saskatchewan and Manitoba.)
  • For Statutory Labour Costs, income thresholds for CPP and EI (at approximately $51,000) result in low statutory plan costs for Canada relative to many other countries. staff


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