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Keep It Simple, Stupid!

Freemont Group
10 January, 2014

An old universal rule of everything we do sounds:

K.I.S.S. (Keep It Simple, Stupid!).

For all businesses and tax payers, it is not only the total height of tax payable that counts. What matters as well is the simplicity of the tax system.

It is always beneficial when the tax agenda is clear, easy and straight forward so that it takes the least possible time to calculate and file. Simple taxes facilitatebusiness development.

According to the World Bank and PwC report "PAYING TAXES 2014 - THE GLOBAL PICTURE", the worst rating out of 189 countries belongs to Chad. In general, African countries don't score well. The Central European economies are not much better, either.

The ratings of Hungary, Czech Republic and Poland show particularly a very time-consuming system that employers have to apply for the payment of all taxes, levies and mandatory contributions for their employees.

The ranking system includes several criteria including the overall tax burden and the time required to complete all tax forms or the total number of tax payments.


The simplest tax systems are in place in countries rich in mineral resources where the state income comes mainly from oil. These countries collect less tax which makes the tax system easier. The top ten of teh ranking is occupied by the United Arab Emirates, Qatar, Saudi Arabia, Hong Kong, Bahrain, Singapore, Ireland, Canada, Oman and Kuwait.


From the OECD member countries, Ireland has the best rating as number 6 and Canada occupies teh 8th place. Total taxation of Ireland and Canada is below average across OECD countries, ranging around 30 % of GDP. The average in Western Europe is higher than 40 % of GDP.

Taxes in Canada are divided into federal, provincial and municipal. Total taxation in each province therefore varies. Overall taxation of labor being the difference between labor costs of employers and net wages that employees receive in their bank account, is 30.8 %. The sales tax varies between 5% and 13%. Canada can be found on top positions of various rankings as it was able to combine excellent conditions for both business and family life.


In the evaluation of the complexity of the tax systems, teh Scandinavian countries perform very well too. Denmark holds the 12th place, Norway is number 17, Finland number 21 and Sweden number 41. These are examples of countries with rather high tax burden but very clear and easy tax system. It does not take much time to a Scandinavian entrepreneur to comply with the local tax regulations. Everything can be arranged quickly and most of it on-line.

Tags: Euro

About the Author

Freemont Group

Freemont Group is a comprehensive provider of fiduciary services, including corporate formation and administration, trust, fund formation, legal-and tax services. Contact: info@freemontgroup.com


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