Tax

Corporation Tax
Austria 25% of the annual profits; annual minimum corporate tax in the amount of EUR 1,750.
The minimum corporate tax is reduced for a newly founded LLC and amounts in the first five years EUR 500 and the following five years EUR 1,000.
China Generally corporate income tax (CIT) rate is 25%. Preferential tax treatment may be granted to a foreign investment enterprise (e.g. in certain regions or if you qualify as a so-called "high-tech enterprise").
Czech Republic The corporate tax rate is 19%. Investment funds have a special tax rate of 5% and for pension funds the rate is 0%.
England & Wales Current rate (for the tax year 2019/2020): 19%

The UK government has previously stated its intention to maintain the most competitive rate in the G20.
France 28% over the first EUR500,000 of taxable income, 31% above this limit.
Germany Corporate income tax rate: 15.825% including solidarity surcharge plus trade tax rate: approx. 13% - 18%. Trade tax rate depends on the municipal assessment rate.
Hong Kong 18.25% on assessable profits up to HK$2,000,000; and 16.5% on any part of assessable profits over HK$2,000,000 (only for profits arising in or derived from Hong Kong).
Hungary The corporate tax rate at a national level is 9% of the positive tax base. At local level there is usually a turnover based tax amounting to maximum 2%.
Ireland Current rate (For the tax year 2019) 12.5% (trading profits)
25% (possible income)
The 12.5% rate has been a core part of the Irish corporate tax offering and the Government's commitment to the rate is confirmed in each annual budget statement.
Netherlands 16,5% over the first EUR 200,000. 25% over the surplus. In 2021 the rate will be 15% over the first EUR 200,000 and 21.7% over the surplus.

A reduced rate applies to activities covered by the innovation box. The innovation box provides tax relief to encourage innovative research.

Qualifying profits earned from innovative activities are taxed at this special rate.
Preferential 20% rate as above but no holding periods.

Qualifying profits earned from innovative activities are taxed at this special rate.
Preferential 20% rate as above but no holding periods.
Poland The standard CIT rate is 19% on annual profit, however a reduced tax rate of 15% CIT is available to a:
a) company commencing a business activity in its first fiscal year,
b) so called “small taxpayer” – a company with an income (revenue) from sales, including output VAT if applicable, not exceeding in the preceding year the equivalent in PLN of EUR 1.2 m.
Singapore 17%
Slovakia As of 1 January 2020, the company (corporate) income tax rate for Slovakia is now determined by the revenue (income) of the company. Companies with annual revenue (income) not exceeding the threshold of EUR 100.000,- will be subject to a reduced tax rate of 15 %. Companies exceeding the said threshold will be subject to 21 % corporate income tax rate.

New regulation introduces a definition of “micro-taxpayer” applicable to businesses (natural persons or legal entities) with annual revenue (income) not exceeding EUR 49.790,- (i.e. the amount of the turnover mandatory for the VAT registration). Various beneficial tax conditions apply to this group of taxpayers, such as more beneficial conditions of tax loss deduction, or simplified depreciation rules. It shall be noted that the status of a “micro-taxpayer” can be acquired for the first time for the tax period beginning not earlier than 1 January 2021.
United Arab Emirates There is currently no corporate tax for legal entities generally.

A few exceptions related to specific industries such as finance and oil and gas exist.
VAT (sales tax)
Austria 20%, 13%, 10%, 0%.
General obligation to pay VAT as long as turnover is realised that is subject to Austrian VAT.
Pre-tax deduction (Vorsteuerabzug) is possible under certain circumstances.
China China implements a VAT system applicable to both sales of goods and provision of (most) services. Usual VAT rates are 6%, 11% and 17%. Input VAT credit: General VAT-payers are allowed to offset input VAT incurred on the purchase of goods / services against payable output VAT.
Czech Republic 21% - standard rate
15% - first reduced rate (food, non-alcoholic beverages, restaurant and hotel services etc.)
10% - second reduced rate (essential child nutrition, gluten-free food, some pharmaceutical products, newspapers and periodicals)
England & Wales Standard rate (for the tax years 2018/2019 and 2019/2020): 20%
Reduced rate (for the tax years 2018/2019 and 2019/2020): 5%
Zero rate (for the tax years 2018/2019 and 2019/2020): 0%
Most goods and services are standard rated.
The ‘transfer of a business as a going concern’ (TOGC) is outside the scope of VAT, if certain conditions are met. Share purchases are generally VAT exempt.
France 20% - Standard rate
Germany General VAT rate: 19%
Reduced VAT rate: 7% (e.g. on print media)
Hong Kong No.
Hungary 27% - Standard rate
Ireland Standard rate for the tax year 2019 (x 3).
Reduced rate for the tax year 2019: 23%.
Zero rate for the tax year 2019: 0%.
Most goods and services are standard rated.
The 'transfer of a business' (TOB) is outside the scope of VAT, if certain conditions are met.
Share purchases are generally exempt.
Netherlands Standard rate: 21%
Reduced rate: 9%
Zero rate: 0%
Poland The standard VAT rate is 23%. This rate applies to almost all supplies of goods and services, unless specific VAT regulations provide reduced rates – 8%, 5% or 0%.

Under some conditions the supply of goods or services can be exempt from VAT.
Singapore 7%
Slovakia The standard VAT (sales tax) rate in Slovakia stands at 20% with a reduced VAT rate of 10% applicable to certain goods, e.g. certain groceries, medical products etc.; as of 1 January 2020, the said list of goods was extended to newspapers, magazines, articles and several types of healthy food. Certain supplies (universal postal services, insurance services, financial services) are exempt from tax.
United Arab Emirates Value Added Tax was implemented in the UAE on 1 January 2018, pursuant to Federal Decree Law No. 8 of 2017 (the 'Tax Law').

The Tax Law requires that any taxable person (individual or corporation) who is providing goods or services in the UAE with a value in excess of the mandatory threshold (AED 375,000) to register for, charge for and pay VAT to the Federal Tax Authority (FTA).

VAT will apply on the supply of goods and services in the UAE (including imports) except on the exempt goods and services as specified under the VAT Law. The standard rate of VAT is currently set at 5% on any supply or import of goods or services.

There are a number of goods and services which are zero rated (including exports outside the GCC, newly constructed residential properties, education services and healthcare services), for which VAT will be charged at 0%, and others which are exempt entirely (including financial services).

The place of supply determines whether a supply is made in the UAE or outside the UAE. As such, if the supply is treated as made outside the UAE, VAT is not chargeable. However, if a supply is made in the UAE, VAT may be chargeable. In relation to goods, the place of supply is the location of the goods when the supply occurs and VAT is chargeable for domestic supplies and exports. In relation to services, the place of supply is where the supplier has the place of residence.

For business-to-business imports into the UAE from outside the UAE, the recipient accounts for VAT under a 'reverse charge' mechanism.
National Insurance / Social Security Contributions
Austria Depending on assessment basis (gross salary).
China Statutory social security insurance consists of basic pension, basic medical, maternity, work injury, and unemployment insurance. There are plans to integrate maternity into the basic medical insurance. On top of the social security insurance, there is also a housing fund program to be respected.

Contributions are made by the employer and partially also by the employee on a monthly basis. The exact contribution rates are set by the local governments within the overall statutory framework.

Expatriates working in China are generally also required to participate in the Chinese social security insurance system, though this is not always strictly enforced throughout China (e.g. remaining optional in Shanghai). Exemptions may further apply under bilateral social insurance treaties.
Czech Republic Paid by employer – 24.8 %
Paid by employee – 6.5 %
Self-employed – 29.2 %
England & Wales For the tax year 2019/2020, generally 12% for employees earning between £166 and £962 per week; 2% on any excess.
For the tax year 2019/2020, generally 13.8% for employers on any salary over £166 per week and on any taxable benefits.
France Between 40 and 45% for employers. Between 20 and 25% for employees.
Germany Social security contributions are payable only up to a set income level. The contribution ceilings are:

- Health (and nursing care insurance) for all Federal States: EUR 4,687.50 (monthly) EUR 56,250 (yearly)
- Yearly statutory remuneration ceiling: EUR 62,550
- Special yearly statutory remuneration ceiling: EUR 56,250
- Pension and unemployment insurance:
- Old Federal States EUR 6,900 (monthly) EUR 82,800 (yearly)
- New Federal States: EUR 6,450 (monthly) EUR 77,400 (yearly)

Social security contributions are payable only up to a set income level. The contribution ceilings are described in the table below:
- 18.6% pension insurance gross wage % (9.3% employer; 9.3% employee)
- 14.6% health insurance gross wage % (7.3% employer; 7.3% employee)
- 2.4% unemployment insurance gross wage % (1.2% employer/ 1.2% employee)
- 3.05% nursing care insurance gross wage % (1.525% employer / 1.525% employee)
- 1.16% accident insurance gross wage % (1.16% employer)
Hong Kong No.
Hungary The rates for 2019 are the following:
Employer: social tax amounting to 17.5 % of the gross salary, vocational training contribution amounting to 1.5 %.
Employee: 10% pension, 7% health insurance, and 1.5% labour market contribution.
Some local taxes can be payable by the owner of a building or land parcel depending on the local governments.
Ireland For the tax year 2019: 4% flat rate for employees, or nil for employees earning between €38 - €352 inclusive per week.
For the tax year 2019 generally 10.95% for employers, or the lower rate of 8.70% between €38 - €386 inclusive per week.
Netherlands National social insurance contributions integrated in income tax/wage tax/ Employees’ insurance contributions levied from employers and vary per industry.
Poland Payable both by the employee (13.71%) and employer (20.74% on top to the gross remuneration).
Singapore Known as CPF (see above). Generally, employer contribution rates from 1 January 2016 for private and public sector non-pensionable employees depends on their age. If younger than 55, the rate is 17% of their wages, and this gradually drops to 7.5% for those over 65.
Slovakia The social security system consists of social security and health insurance contributions. If an individual is on the Slovak payroll, the employer withholds social security on a monthly basis. A self-employed individual must also pay the social security and health insurance contributions related to their 'earnings'.

Health insurance contributions represent in 2020:
- self-employed: 14%
- employer and employee: employer: 10% and employee: 4%.

Social security contributions represent in 2020:
- self-employed: 33.15%
- employer and employee: employer: 25.20% and employee: 9.4%.
United Arab Emirates
Capital gains
Austria 27.5% on dividends and capital gains; however, depending on group structure and applicable double taxation treaties.
China Generally none; however foreign shareholders selling their equity interest in a Chinese subsidiary are subject to a withholding tax of 10% on capital gains.
Czech Republic For tax residents, gains derived from the sale of assets generally are included with other taxable income and taxed at the regular 15% personal income tax rate, respectively, 19% corporate income tax rate. Dividends and interest are subject to a 15% withholding tax at source.
England & Wales Tax year 2019/2020: 28% (broadly, relating to residential property) or 20% (other gains), for trustees or personal representatives or to the extent taxable gains, when aggregated with taxable income, exceed £37,500 threshold.
Gains up to £12,000 (for tax year 2019/2020) are exempt.

Entrepreneurs’ Relief (ER) – individuals may qualify for a tax rate of 10% on certain disposals.

Chargeable gains made by companies (i.e. on the disposal of a business asset) are charged to corporation tax.
France For individuals: subject to income tax at a 12.8% fixed rate and social contributions at a 17.2% rate (overall tax rate of 30%). Taxpayers are allowed to opt for the former taxation regime (income tax at the progressive scale up to 45%, after application of an ownership duration rebate provided that the shares were acquired or subscribed before January 1, 2018 + social contributions at a 17.2% rate). For real estate capital gain: income tax at the rate of 19% after application of a tax rebate the amount of which depends on the length of ownership of the property (up to 100% after 22 years) + social contributions at the rate of 17.2% after application of a tax rebate of the same kind (up to 100% after 30 years of ownership) + additional tax for real estate capital gains exceeding €50k (up to 6%).

For companies: effective tax rate of 3,4% for substantial ownership (ownership of more than 5% of the company’s share capital for more than 2 years). This preferential tax regime does not apply to shares of predominant real estate company.
Germany Private assets (individuals): 26.375% (incl. solidarity surcharge plus church tax, if any); Business assets (individuals): approx. 30% (incl. solidarity surcharge and church tax, if any); Business assets (corporations): approx. 1.5% (including solidarity surcharge).
Hong Kong No.
Hungary Two varieties of tax obligation apply:
- social tax amounting to 17.5 % only up to a limit (in 2020) of HUF 676,200 / year (approximately EUR 2,049.00).
- personal income tax amounting to 15%.
Ireland Tax year 2019: there is a standard rate of 33%.
Every Irish tax-resident individual has the benefit of an annual exemption that can be set against chargeable gains in a tax year (currently €1,270 for the tax year 2019).
Entrepreneurs' Relief (ER) — individuals may qualify for a tax rate of 10% on certain disposals.
Chargeable gains made by companies (i.e. on the disposal of a business asset) are charged to corporation tax.
Netherlands 0% to 25%
Capital gains are included in taxable profits and subject to the normal corporate income tax rate. The basis for calculating a capital gain or loss is the difference between the book value of an asset and the amount for which the asset is sold (or fair market value).

Under the participation exemption, capital gains derived from the sale of shares in a company are, in principle, exempt from corporate income tax.
Poland Capital gains are in general subject to 19% CIT or PIT rate, unless applicable tax treaty or Polish law provides otherwise.
Singapore Singapore does not tax capital gains.
Slovakia Individuals: 19% (from the tax base not exceeding 176.8 times the amount of the minimum living wage - EUR 37.163,36), and 25% (from the tax base exceeding the said EUR 37.163,36);

Corporations: 21%, or 15 % in case the revenue (income) does not exceed EUR 100.000.
In general, transfer of an ownership interest or shares in a Slovak company, or a membership interest in a cooperative with its seat in Slovakia is taxable, unless certain exemptions apply.

Sale of shares and ownership interests in Slovak and foreign companies (as of 2020 also simple joint-stock company, so-called “JAS”) can be exempt from the corporate income tax if certain conditions are met (the sale arises no earlier than 24 months after the acquisition of at least 10% in the registered capital of said company and the taxpayer is not a shell company). This tax exemption does not apply to taxpayers in liquidation, and to the income from sale of shares/ownership interests in companies in liquidation, bankruptcy or restructuring.

Separate rules are applicable to derivatives and hedging derivatives.

New regulation extends the definition of “dividend” also to:

(i) usage of retained earnings after tax for creation of “capital fund of contribution”; and
(ii) redistribution of reserve fund resources among shareholders, in the same part as they were created from retained earnings after tax.

Dividends distributed out of profits generated from 1 January 2004 until 31 December 2010 are not subject to any tax or national health insurance contributions.

Dividends distributed out of profits generated from 2011-2012 to individuals are subject to health insurance contribution at the rate of 10% and limited by specific caps.

Dividends distributed out of profits generated from 2013-2016 to individuals are subject to health insurance contribution at the rate of 14% and limited by specific caps.

Dividends distributed out of profits generated from 2017 onwards to:

(i) legal entities resident in Slovakia or in a treaty state are not subject to any tax;
(ii) individuals resident in Slovakia or in a treaty state, or dividends received by individuals resident in Slovakia from a treaty state are taxable at 7%;
(iii) legal entities or individuals resident in a non-treaty or dividends received by Slovak residents from a legal entity in a non-treaty state are taxable at 35%.

The taxation of an income in Slovakia can be adjusted based on the existence of a relevant double tax treaty.
United Arab Emirates
Technology company tax advantages
Austria Depending on individual circumstances, several tax advantages aiming at inter alia tech companies may be available.
China A company (including a foreign invested one) qualifying as a high-tech company may enjoy a reduced corporate income tax rate of 15%.
Czech Republic Depending on individual circumstances, a reduction of the tax base for 100 % of the amount invested in R&D during the tax year is possible, but not exceeding the amount of the tax base. However, the current government is not inclined to strict application of this benefit.
England & Wales Research & Development (R&D) tax relief – enhanced corporation tax relief that can either reduce a company's tax bill or provide a cash sum paid by HMRC for companies incurring qualifying expenditure on R&D projects.

For the tax year 2019/2020, an extended definition of small or medium-sized enterprises (SME) can claim an enhanced tax deduction of up to 230% of qualifying revenue expenditure or surrender deductions in exchange for a cash payment of broadly 14.5% of qualifying expenditure incurred. For non-SMEs, an "above the line" R&D expenditure credit (RDEC) for 12% of qualifying R&D expenditure is available. Assuming a tax rate of 19%, the cash benefit is 9.72%.

Patent Box Regime – businesses with UK or EU patents may be eligible for an effective corporation tax rate of 10% over time in the UK on revenues derived from qualifying patents (subject to certain requirements being met).
France R&D tax credits: 20%-30% deduction on R&D expenditure (which may result in repayable credit).

Patent Box: an effective tax rate of 10% corporation tax for qualifying revenues and under certain condition.
Germany No special tax regime or tax benefits.
Hong Kong No special tax regime or tax benefits.
Hungary Tax credit shall be granted to taxpayers
- for investment projects valued at 6 billion forints or more at current prices or
- for investment projects serving to create new jobs, valued at 3 billion forints or more at current prices, if the investment is an initial investment for the purpose of product diversification or an initial investment for the purpose of creating new process innovation realised by a large company in the Közép-Magyarország region (central Hungary), in any supported municipality provided for in the relevant government decree.
Ireland Research and Development (R&D) Tax Credit / Capital Expenditure Tax Relief — a company can claim a 25% tax credit for expenditure on R&D carried on within the EEA. This can be combined with the normal business deduction for such R&D expenditure (at an effective rate of 12.5%), which results in a tax rate of 37.5%.

Income tax relief can also be made available to 'key R&D employees'. This means a company engaged in R&D activities can surrender some of its R&D credit to key employees so that their income tax liability is reduced by the amount surrendered (subject to not reducing the key employee's effective rate of tax to below 23%).
Write-down of Cost of Acquiring Intellectual Property — companies that acquire IP can deduct the cost of that acquisition against taxable profits. The deduction is available as a capital allowance (tax depreciation) and the cost is written-off over a number of years. The relief may be claimed when the IP is acquired from a third party and intra-group, subject to certain limitations. Further, the capital allowances claimed cannot exceed 80% of the company's taxable profit.
Knowledge Development Box — this is a form of patent box, and under the regime, profits derived from 'qualifying IP' will be subject to an effective rate of corporation tax of 6.25% (subject to certain requirements being met).
Netherlands R&D deductions, innovation activities, tax/ patent box.

Under the Dutch innovation box regime, qualifying income from research and development activities are taxed at an effective rate of 7% rather than the statutory corporate income tax rate of 25%.
Poland Research & Development (R&D) tax relief that can decrease a company’s tax bill by an additional deduction of eligible R&D expenses from a company’s tax base. The additional deduction amounts to:
a) 100% of eligible expenses for all companies;
b) 150% of eligible expenses for companies having the status of R&D Centre.
Singapore a) Corporate Income Tax Rebate: For YA2 019, potential for 20% Corporate Income Tax Rebate capped at S$10,000.
b) Tax Exemption Scheme for New Start-Up Companies: from YA 2020 onwards, new qualifying companies (where any YA of the first three YAs falls in or after YA 2020) will be given a 75% tax exemption on the first S$100,000 of normal chargeable income and a further 50% tax exemption on the next S$100,000 of normal chargeable income for each of the first three consecutive years of assessment.
c) Partial Tax Exemption for Companies: from YA 2020 onwards, qualifying companies will be eligible for partial tax exemptions to a maximum of S$102,500 per YA.
d) Tax Deductions for Research & Development (“R&D”) Expenditure: subject to eligibility, tax deduction of 100% of qualifying R&D expenditure and enhanced tax deduction of 150% for R&D done in Singapore from YA 2019 to YA 2025.
e) Capital Allowances for Acquisition of IP Rights: writing-down allowances can be claimed on capital expenditure incurred up to the last day of the basis period for YA 2020 to acquire approved intellectual property rights for use in a trade or business. “Capital expenditure” excludes legal fees, registration fees, stamp duly and other costs related to the acquisition of the intellectual property rights.
Slovakia Certain advantages can be provided in the form of investment incentives (e.g. to start new production or the provision of services); these incentives are subject to the special regulation in the State Aid Act and can be provided in the form of cash or tax relief. Certain corporate income tax relief can be also provided under the Act on Investment Incentives and the Act on Research and Development Incentives.

Patent Box – this new form of tax advantage was introduced as of January 2018. Under this special tax regime, it will be possible to be exempt from income tax up to 50% of any revenues derived in the form of license fees relating to the provision of intangible assets resulting from the taxpayer’s own development activities in Slovakia (patents, utility models, or software). The tax exemption however, only applies to taxable periods in which the taxpayer depreciates the capitalised costs relating to the development of these intangible assets (e.g. inventions protected by patent, the technical solutions protected by utility model or the software). In addition, a separate tax regime was introduced for revenues derived from the sale of products manufactured on the basis of an invention protected by patent or a technical solution protected by utility model – such revenues will also be exempt from the income tax (also up to 50% of such income
United Arab Emirates No special tax regime or tax benefits.