What was claimed
Corporation tax rates are higher in the USA than the UK
Our verdict
That’s correct. US companies pay about twice the rate of tax on their profits as UK companies.
Corporation tax: UK vs USA
“Corporation tax is even much higher in the United States.”
Richard Burgon MP, 8 December 2016
It’s correct that corporation tax rates are higher in the USA than that UK.
The UK taxes companies a main rate of 20% of their profits. That’s set to fall to 19% in April 2017, and 17% in April 2020.
US corporation tax rates are about 39%, on average according to the OECD, so about twice that paid in the UK. The exact rate of corporation tax varies between states.
Companies pay tax in the country where they locate their business, rather than the place where they make their sales. For example, a UK car manufacturer who sold cars in the United States would pay the UK rate to the UK government.
Corporation tax isn’t the only tax paid by UK businesses.