When it comes to paying taxes, some Latin American countries are better places to live than others.
Brazil, for example, is poised to become a business powerhouse but struggles with its tax structure. and was rated last on the annual Latin Tax Index from Latin Business Chronicle. The index measures the overall tax climate in a country by looking at four factors: corporate tax rates, tax rates as a percent of profits and the number of payments and hours spent to pay taxes yearly. The index uses data from The World Bank, KPMG and the Heritage Foundation, according to a recent article.
Brazil has one of the highest corporate tax rates in Latin America and the world’s highest number of hours needed to pay taxes per year. Brazil’s 34 percent corporate tax rate is second to Argentina and Honduras, both at 35 percent. Venezuela is also 34 percent.
The Brazilian tax system requires tax payers work 2,600 hours per year to pay taxes, according to The World Bank, the highest in Latin America, five times higher than the regional average, and the worst among 183 countries throughout the world studied by Latin Business Chronicle.
Argentina, Venezuela and Bolivia also prove a bad bet for businesses, and rank 15, 16 and 17, respectively, on the Tax Index list. High tax rates coupled with red tape in those countries gives them a very poor rating.
Bolivia has Latin America’s second-worst tax climate. It takes 1,080 hours and 42 payments to comply with fiscal law in Bolivia and 70 tax payments a year in Venezuela. Argentina has the region’s highest corporate tax rate of 35 percent.
Chile and Paraguay are better places to live for taxpayers. Chile has Latin America’s second-lowest corporate tax rate of 18.5 percent. Paraguay ranks second on the Latin Tax Index with a corporate tax rate of 10 percent, the lowest in Latin America.
