Publish in Special Reports - Monday, March 25, 2013
TAX CHAMPIONS Presidents Sebastian Pinera of Chile and Juan Manuel Santos of Colombia have Latin America's best corporate tax environments. (Photo: Felipe Pinzon -SIG)
A closer look at the tax burden for companies operating in Latin America.
BY JOACHIM BAMRUD
Chile has Latin America’s best corporate tax environment but Colombia now trails closely behind. A key reason is that Colombia reduced its corporate tax rate from 33 percent last year to 25 percent this year, while Chile increased its rate from 18.5 percent in 2012 to 20 percent this year.
Meanwhile, Brazil remains the worst country in Latin America, followed by Venezuela, according to the Latin America Tax Ranking from Latinvex. It is based on three factors: The 2013 corporate tax rate, time necessary to comply with tax payments and number of payments. It uses data from accounting firm KPMG, The World Bank and the Heritage Foundation.
Although the Brazilian government has implemented various tax breaks recently, they are not enough to alleviate the tax burden in the South American country, experts say. “Those are mostly temporary tax breaks,” says Rogerio Menezes, the CFO of the Brazil unit of a major multinational chemical company. “We need a more structural reform.”
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Keywords: Argentina, Bolivia, Brazil, Chile, Colombia, Costa Rica, Dominican Republic, Ecuador, El Salvador, Guatemala, Haiti, Honduras, Mexico, Nicaragua, Panama, Paraguay, Peru, Uruguay and Venezuela