China has the harshest tax regime in the Asia-Pacific region while Hong Kong offers the friendliest, Forbes Asia business magazine said in its 2009 survey released today.
Forbes said China's tax "misery score" rose seven points to 159 from last year after Beijing imposed higher employer and employee social security taxes as its economy took a hit from the global economic downturn.
China levies a 25 per cent tax on corporate income, 45 per cent on personal income, 49 per cent for employers' social security, 23 per cent for employees social security and a 17 per cent tax on goods and services, the survey showed.
By contrast, Hong Kong's tax misery score of 41.5 ranked the best in the Asia-Pacific region.
Hong Kong's corporate tax stands at 16.5 per cent, personal income tax at 15 per cent and employer and employee social security levy at 5 per cent each, it said.
"This year, most Asian jurisdictions continue to have a more tax-friendly environment compared with other parts of the world," Forbes said in a press statement.
"The survey shows that outside of China and Japan, the rest of Asia continues to enjoy stable, low tax advantage."
Japan's misery score of 122.6 ranked it as having Asia's second-least friendly tax environment after China, while Taiwan followed Hong Kong as the region's second-most friendly with a score of 75, the survey said.
Forbes calculates the misery score by taking the sum of the corporate, personal, social security and sales tax rates. It is used to assess whether a jurisdiction's tax policy attracts or repels talent and capital.
Eight of the 10 least tax-friendly countries on the list are European, it added.
Worldwide, France topped the list by having the least friendly tax regime with a misery score of 167.9 among all the 50 jurisdictions surveyed.
France charges a corporate tax of 34.4 per cent, personal income tax of 52.1 per cent, a 45 per cent social security levy on the employer, a 14 per cent social security tax on the employee and a 19.6 per cent sales tax.
Qatar, which taxes only corporate income, has the friendliest tax regime worldwide, followed by the United Arab Emirates, which only collects social security contributions.
India saw its misery score rise by 24 points to 113.4 after it raised social security charges for employers and employees, while New Zealand made the biggest improvement in the Asia-Pacific region after it eased individual and social security taxes.
