(1) Corporate income tax
The corporate income tax in the UK is also called “company tax” or “corporate tax”. Resident companies need to pay corporate income tax on their profits from all over the world, while non-resident companies pay corporate income tax on their profits from the UK based on the principle of territoriality. The current corporate income tax rate in France is 19%. In addition, non-resident companies need to pay withholding tax to HMRC (HMRC) on dividends, interest, royalties and other income (such as rental income) at a rate of 19%.
(2) Personal income tax
The scope of personal income tax in the UK mainly includes wages, allowances, income from labor or services, rental income, pension income, stock dividends and other income. The UK personal income tax adopts a progressive tax rate ranging from 0 to 45% (the highest tax rate in Scotland is 46%). The basic tax exemption is 12,570 pounds. The calculation formula is the balance after deducting the basic deduction from other deductible items and multiplying it by the corresponding tax rate.
(3) Capital gains tax
Capital gains tax is a tax levied on capital gains from the disposal of assets. There are two ways to determine the tax rate. One is that if the personal income tax is subject to a high rate or a premium rate, then the capital gains tax on residential real estate is 28%, and the capital gains tax on other assets is 20%; the other is that if the personal income tax is subject to the base rate, the capital gains tax needs to be determined based on the amount of income. The tax-free amount for capital gains tax is £12,300.
(4) Dividend income tax
Dividend tax refers to the tax that needs to be paid on dividend income. The tax-free amount for dividend income is £2,000. If the amount exceeds £2,000, a tiered tax is imposed. The base rate is 8.75%, the high rate is 33.75%, and the premium rate is 39.35%.
(5) Stamp duty
Stamp duty is divided into land stamp duty and reserve stamp duty. Land stamp duty is paid when buying and transferring real estate, with a progressive tax rate. The tax-free amount for residential properties is 500,000 pounds, and the tax-free amount for non-residential properties is 150,000 pounds. Reserve stamp duty is paid when buying stocks, usually at 0.5%. Transferring stocks to a stock clearing agency or stock depository organization requires a 1.5% stamp duty.
(6) Import duty
The UK will implement the new tariff system of “UK Global Tariff” from January 1, 2021, replacing the EU external tariff system that has been implemented. Under the new tax system, 60% of imported goods are duty-free. The specific tariff rates for goods can be found on the website of the UK Customs and Revenue.
(7) Inheritance tax
The threshold for inheritance tax is 325,000 pounds. If the amount of inheritance received is greater than the threshold, the applicable tax rate is 40%; if the property is donated by the deceased 7 years before his death, it is exempt from inheritance tax.
For enterprises, the main taxes involved in overseas investment are: import tariffs, value-added tax, and corporate income tax in the country of destination. Business operators and financial personnel can focus on these areas.
The above tax rates are the main tax types of various countries and regions, not all tax types. For more tax information, please log on to the website of the tax bureau of each country for inquiry. The website shall prevail.