Lower Corporate Rates are Competitive with Global Rates

Deloitte’s international tax department came out with a corporate tax rate chart for 2018. The chart is quite comprehensive and provides brief notes about the tax structure in the listed country.

I have a client I met for coffee last week that formed a corporation in the US with a fiscal year end of 9/30. Therefore, his first full year end was 9/30/2018. We discussed upcoming filing dates, now 3 and 1/2 months from year end or 1/15/19.

The IRS changed the filings dates a couple of years ago to allow for pass-through entities, such as, S Corps and Partnerships to file by 2 and 1/2 months from year end with C Corps filing now as individuals do on April 15, if they are a calendar year end filer. It seems the logic behind the change was to allow for individuals to receive K-1’s in order to file their personal income tax returns timely.

Anyways, at our meeting over coffee, the topic came up about comparative corporate tax rates in the United kingdom and the client seemed happy that our US corporate tax rates have dropped considerably and at similar rates to the United Kingdom.

This drop does allow taxpayers to reconsider how transactions and ultimate corporate tax will play between the US corporation and the sole shareholder, in this case, the UK Corporation.

In prior years corporations were encouraged to keep profits at a minimum as they would be taxed at up to 35% on earnings above $50,000.

The Compilation of international tax rates published by Deloitte can be found at:

https://www2.deloitte.com/content/dam/Deloitte/global/Documents/Tax/dttl-tax-corporate-tax-rates.pdf

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