Total Tax Contribution 2009

Transcription

1 Total Tax Contribution 2009 This survey by PwC Japan Tax looks at the actual amount of taxes and social security contributions borne and collected by large Japanese companies for FY07/08. It further looks at the results by industry sector and compares Japan s results with other countries where similar PwC country studies have been carried out. This report is expected to contribute to the current and future discussions towards the tax reform in Japan.

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3 Total Tax Contribution 2009 Zeirishi-Hojin PricewaterhouseCoopers Contents Section I. Introduction 1 Section II. Executive summary 2 Section III. Total Tax Contribution Framework 7 Taxes borne and collected 7 Total Tax Contribution (TTC) 7 Total Tax Rate (TTR) 7 Section IV. Methodology used in FY 2007/08 survey 9 Section V. Results of FY 2007/08 survey 14 Participants and their responses 14 Number of taxes borne and collected as reported by participants 15 Tax compliance cost 15 Total Tax Contribution 16 Taxes borne 16 Taxes collected 20 Local taxes 21 Total Tax Contribution as a percentage of value distributed 22 Total Tax Contribution as a percentage of domestic turnover 26 Employment taxes 27 TTR analysis based on FY 2007/08 combined data 29 Section VI. Industry comparisons 32 Section VII. Movements in FY 2007/08 period 36 Section VIII. Cost of tax compliance 39 Section IX. International comparisons 46

4 Figure 1. List of taxes covered by the survey 10 Figure 2. Survey participants by industry sector 14 Figure 3. Turnover and other key information on the participants 15 Figure 4. Total Tax Contribution to government 16 Figure 5. Major taxes borne by participants as a % of government receipts 17 Figure 6. Corporation taxes as percentage of total taxes borne in FY 2007/08 18 Figure 7. Movements of the different taxes borne over FY 2007/08 19 Figure 8. Major taxes collected by participants as a% of government receipts 20 Figure 9. National and local taxes split of Total Tax Contribution (FY 2008) 21 Figure 10. Value distributed to stakeholders 23 Figure 11. Total Tax Rate for survey participants in FY 2007/08 25 Figure 12. Distribution of Total Tax Rate for survey participants in FY 2007/08 25 Figure 13. Distribution of TTC as percentage of turnover in FY 2007/08 26 Figure 14. Number of employees and total amount of salaries paid by participants 27 Figure 15. Total employment taxes paid by survey participants 27 Figure 16. Employment taxes per employee 28 Figure 17. Employment taxes as a percentage of total amount of salaries 28 Figure 18. Composition of employment taxes per employee in FY 2007/08 29 Figure 19. Total Tax Rate (based on FY 2007/08 combined data) 30 Figure 20. Effective corporation tax rate, tax rate in narrow sense, overall Total Tax Rate 31 Figure 21. The split of national and local taxes for TTR 31 Figure 22. Percentage of Total Tax Contribution by industry sector (FY 2008) 32 Figure 23. Overall changes in financial indicators by sector during FY 2007/08 34 Figure 24. Total Tax Contribution by sector (FY 2007/08) 34

5 Figure 25. Total Tax Rate in the Manufacturing, Wholesalers & Retailers, and Electricity & Gas and Information & Communication sectors 35 Figure 26. Total Tax Rate by sector 35 Figure 27. Effective corporation tax rate, tax rate in narrow sense, and Total Tax Rate by sector 35 Figure 28. Movement in financial data provided during FY Figure 29. Movements in major taxes borne and total taxes borne 37 Figure 30. Major local taxes 37 Figure 31. Movements major taxes collected 38 Figure 32. Distribution of the number of staff in the tax department 39 Figure 33. Total number of days required per annum for compliance activities - split by department (central or shadow tax) 40 Figure 34. Total number of days required per annum for compliance activities performed by central and shadow tax departments - by tax item 41 Figure 35. Total number of days required per annum for compliance activities performed by central tax department - by tax item 41 Figure 36. Total number of days required per annum for compliance activities performed by shadow tax departments - by tax item 42 Figure 37. Compliance costs split by type of tax 43 Figure 38. Components of tax compliance costs for corporation taxes per company 43 Figure 39. International tax compliance cost 44 Figure 40. Items that impose the heaviest administrative burden and largest cost 45 Figure 41. International comparison of Total Tax Rate 47 Figure 42. International comparison of effective corporation tax rate, tax rate in narrow sense, and Total Tax Rate 48 Figure 43. International comparison of employment taxes 48 Figure 44. International comparison of Total Tax Rate for the manufacturing industry 49 Figure 45. Composition of taxes borne by manufacturing industry (international comparison) 50 Figure 46. International comparison of tax compliance cost and number of staff 50

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7 Section I. Introduction The survey was carried out by the Tax Practice of PricewaterhouseCoopers Japan over the January -February 2010 period, using the PwC Total Tax Contribution (TTC) Framework. The PwC TTC Framework is used internationally and surveys with leading business organisation have been carried out in a number of major countries. This project has been commissioned by the Corporate Affairs Division, Economic and Industrial Policy Bureau of the Ministry of Economy, Trade and Industry (METI). Without the full support of the Nippon Keidanren, the success of this survey would not have been possible. 95 companies participated in the survey - a record 100% participation for the first year. These 95 companies from 38 corporate groups represent Japan s leading players in their sector. The aim of the survey is to identify the taxes and social security contributions paid by these 95 companies for the periods ended March 2008 (FY 2007) and March 2009(FY 2008). Taxes, social security contributions and other public burdens inevitably arise as companies conduct their business activities. With globalisation, the burden of taxes in a country of operation, more than ever, affects a company s decision of where to operate. This will impact both its domestic and international competitiveness, hence overall business performance. Effective tax rates are a popular measure companies usually use to compare their tax burdens across their international operations. This survey will shed light on the overall taxes and contributions Japanese companies make in the course of doing business, and how they compare to their counterparts in other countries. In FY 2008, following the failure of Lehman Brothers, economic conditions deteriorated rapidly around the world particularly in the US and in the European financial markets. In this global climate, the economy in Japan also deteriorated. For companies, this resulted in declines in exports, decreases in corporate profits during the economic downturn and reductions in capital investments. For individuals, the deterioration of income and employment conditions resulted in consumption activities slowing down. This report looks at the Total Tax Contribution of leading Japanese companies during this recessionary period Total Tax Contribution 1

8 Section II. Executive summary Purpose of survey This survey was commissioned by the Corporate Affairs Division, Economic and Industrial Policy Bureau of METI (Ministry of Economy, Trade and Industry), and conducted with the support of Nippon Keidanren. The purpose of the survey is to: Measure the actual amount of taxes and social security contributions paid by large businesses in Japan; and Provide comparable data to enable comparison with the other countries which conducted similar surveys using the PwC TTC Framework. The intention is to make them available for future tax reform discussions and multidimensional analyses. Total Tax Contribution Framework The Framework distinguishes between taxes borne and taxes collected. Taxes borne are a cost to the company when paid and affects its net profit. Taxes collected are taxes collected by the company on behalf of Government and are not a direct cost other than administration. Total Tax Contribution includes all tax payments made by a company;i.e, its taxes borne and taxes collected. Corporation taxes borne are the actual amount paid in Japan excluding withholding taxes on payments of interest or dividends, and after foreign tax credit. One of the indicators used under the TTC Framework is the Total Tax Rate (TTR). TTR is total taxes borne as a percentage of profit before all taxes borne. TTR measures the burden of all taxes borne in relation to profitability. Methodology for and responses to the FY 2007/08 survey 95 companies from 38 corporate groups participated in the survey, in response to invitations by METI and Nippon Keidanren. Data requests were prepared and sent in an electronic form via of the 95 participating companies rank among the top 50 Japanese companies in terms of the market capitalisation. Collectively, the participants employ 1,058,752 employees and recorded a domestic turnover of trillion for FY The survey covers 54 taxes including social security contributions. For FY 2008, the average number of taxes borne for a company in the survey was The average number of taxes collected was Total Tax Contribution 2010

9 Results of FY 2007/08 survey key findings The following are the key results of the survey: In FY 2007, survey participants (95 companies from 38 corporate groups) made a Total Tax Contribution of trillion. This represents approximately 5.4% of government receipts. Total Tax Rate for survey participants was 50.4% based on FY 2007/08 combined data, 1 which is the second highest in the world after Belgium. Total Tax Contribution made by survey participants accounted for 39.7% of total value added in FY The percentage increased to 47.7% in FY 2008, when the companies performance deteriorated. This suggests that in period of recession, companies still contribute to public finances through other taxes than corporate income tax. Total Tax Contribution Collectively, the survey participants made a Total Tax Contribution of trillion in FY 2007 and trillion in FY The FY 2007 amount represents 5.4 % of government receipts. The decrease over the FY 2007/08 period was mainly attributable to the decrease in corporation taxes ( billion). Taxes borne Taxes borne by survey participants collectively totalled trillion for FY 2007 and trillion for FY Total taxes borne by survey participants in FY 2007 accounted for 3.2% of government tax and social security revenues in FY Focusing on corporate income tax, inhabitant tax, and enterprise tax, only 95 participant companies paid more than 10% of each tax revenue. While the amount of tax paid by survey participants decreased significantly over the FY 2007/08 period, it remained a constant percentage of government corporate income tax revenues, i.e. 10.4% for FY 2007 and 9.5% for FY In 2008, corporation taxes (corporate income tax, corporate inhabitant tax, income-based enterprise tax) accounted for 44.1% of the total taxes borne, demonstrating that they are the largest taxes borne by survey participants. Taxes collected The total amount of taxes collected by survey participants was trillion in FY 2007 and trillion in FY The largest tax was gasoline tax, followed by employees social security contributions and withholding income tax from salary. The amount of gasoline tax collected reported in the survey accounted for approx. 68% of total government gasoline tax revenues. This data was provided by four participants and shows that the tax collection for this tax is concentrated on a few number of companies. Total Tax Contribution as a percentage of value distributed In this survey, the total value-added generated by participants is defined as the sum of net profit after tax, net interest paid, wages, and Total Tax Contribution (sum of taxes borne and collected). Labour s share is represented by wages as a percentage of total value-added. Labour s share increased from 31.8% in FY 2007 to 42.2% in FY 2008, as a result of profits decreasing whilst wages and salaries remained fairly stable. The amount paid into public finances, referred to as public distribution ratio in this report, is represented by Total Tax Contribution as a percentage of total value-added accounted. The public distribution ratio increased from 39.7% in FY 2007 to 47.6% in FY Total Tax Rate The average Total Tax Rate increased significantly from 41.6% in FY 2007 to 58.2% in FY 2008, reflecting the deteriorating business performance in the economic downturn. Employment taxes In aggregate, survey participants reported employer social security contributions of trillion for FY This accounted for approx. 3.8% of government receipts in the year. Employment taxes are the aggregate 1 A mean average of FY 2007/08 Total Tax Rates for survey participan Total Tax Contribution 3

10 of employers social security contributions (taxes borne) and withholding income tax from salary, withholding inhabitant tax, and employees social security contributions (taxes collected). The average employment taxes per employee remained fairly flat, i.e. 2,607,441 in FY 2007 and 2,650,864 in FY Analysis based on the FY 2007/08 combined data Total Tax Rate for FY 2008 was higher than that for FY 2007, affected by the economic down turn and deterioration in business performance and the resulting decrease in net profit before tax. In order to remove the effect of the latter and eliminate disparities between FY 2007 and FY 2008, the Total Tax Rate was calculated using an average of the data from the two years. The mean average of the Total Tax Rate for this survey was 50.4%. Industry comparison Further analysis was performed by classifying the survey participants of 38 corporate groups into three major categories; Manufacturing, Wholesalers & Retailers, Electricity & Gas and Information & Communication ) and eight sectors namely Automobile, Chemical & Pharmaceutical, Electricity & Gas and Information & Communication, Machinery, Iron & Steel and Metal, Oil & Gas, Retailers, and Trading Houses. The Electricity & Gas and Information & Communication sector accounted for 35.6% of Total Tax Contribution made by all participants in FY This sector was characterised by the relatively stable business performance and fixed tax payments (e.g. fixed assets tax, electric power resources development tax, etc.). The Total Tax Rate for the sector was 66.5%. In the Oil & Gas sector, taxes collected were significantly larger than taxes borne. This sector reported total taxes collected of trillion, most of which was largely gasoline tax and other oil-related taxes. The Total Tax Rate for trading houses was low: in particular, due to lower corporation taxes payments. Trading houses reported a higher ratio of other taxes borne, most of which (98%) were custom duty payments. Tax compliance cost On average, survey participants had 15.5 staff members in their central tax department. The median value was 8. In addition, with regard to the average number of employees engaged in international and domestic tax compliance, it was calculated by summing annual number of days worked by central and shadow tax department employees and then dividing the sum by 240, an assumed number of days worked per employee per annum. As a result, it was found that 8 employees were engaged in domestic tax compliance and 2 employees were engaged in international tax compliance. The average tax compliance cost can be split into domestic tax compliance cost of million and international tax compliance cost of 44.3 million. 55% of the average tax compliance cost relates to the cost for administrating corporation taxes 4 Total Tax Contribution 2010

11 while 52% of international tax compliance cost was assigned to dealing with transfer pricing. Participants indicated that the three tax compliance areas which they felt carried the heaviest burden were tax investigations, adjustments in filing corporate income tax return, and preparation of supporting documents for corporate income tax returns. International comparisons International comparisons were made using the results from previous PwC Total Tax Contribution surveys in nine other countries. Japan had the second highest Total Tax Rate after Belgium. It is a common knowledge that Japan s nominal effective tax rate is similar to that of the US (40-50%). However, the survey shows that Japan s tax rates were higher than the UK and the US by approx. 8% for effective corporation tax rate, and in terms of Total Tax Rate. Total Tax Rate for the Japanese manufacturing sector was 47.9%, second highest after Belgium, and higher by approx. 10% and approx. 25% than the US and India respectively Total Tax Contribution 5

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13 Section III. Total Tax Contribution Framework Taxes borne and collected The Framework distinguishes taxes into taxes borne and taxes collected. Taxes borne refers to a direct cost borne by companies and these costs will affect their net profit. Taxes collected refers to taxes that are collected by companies on behalf of Government. In general, they involve no costs when being paid except for the administrative expenses associated with their collection and management. Taxes collected are of importance to companies: firstly, they represent tax revenues that will not be generated if companies do not perform their business activities; and secondly, they will bring about administrative costs, impact business cash flow, and involve tax compliance risk where they are unable to collect and pay these over to tax authorities. Total Tax Contribution (TTC) Total Tax Contribution refers to all the direct and indirect taxes payments of a company to government; TTC represents the aggregate of taxes borne and taxes collected. Total Tax Rate (TTR) TTR is total taxes borne expressed as a percentage of profit before all taxes borne in a financial year. TTR measures the burden of all taxes borne in relation to profitability Total Tax Contribution 7

14 Total Tax Rate Net profit (loss) before tax Total taxes borne (Total taxes borne - Corporate income tax, inhabitant tax, and income-based enterprise tax) Adjustment to net profit (loss) before tax in the denominator is based on the concept that the amount of taxes borne that were expensed in the calculation of net profit (loss) before tax (e.g. fixed assets tax included in taxes and public charges account) should be added back. However, because the amount of taxes borne subject to the adjustment was recognised on cash basis, it is different from analyses based on accounting values. It must be noted that, because the survey recognises taxes borne on cash basis, current year s taxes borne (corporate tax, inhabitant tax, and enterprise tax) are recognised based on the amount due with the previous year s final return and current year s interim payment; as a result, there will be a period mismatch of one business year between net profit (loss) before tax and the amount of corporation taxes paid. Any refund of corporation taxes paid in the previous year is recognised as a deduction from taxes borne. 8 Total Tax Contribution 2010

15 Section IV. Methodology used in FY 2007/08 survey In response to the invitation by METI and Nippon Keidanren, 95 companies in 38 corporate groups participated in the survey. Given the increasinglyintegrated management of corporate groups, it is desirable to measure a corporate group s overall tax contributions on a consolidated basis. However, in view of the special nature of equity tie-ups prevailing across Japanese companies, the scope of the survey was limited to the parent companies and where the activities of corporate groups can easily be identified (e.g. subsidiaries and affiliates included in the consolidated financial statements, major domestic companies only). In cases where a subsidiary or affiliate provided data to the survey, and its turnover was less than 15% of that of its parent company in both FY 2007 and FY 2008, the data was combined with the parent company. The survey was conducted using electronic data requests. These were distributed by on January 13, 2010 and all responses were received by the deadline, end of February The Tax Practice of PricewaterhouseCoopers Japan collated and anonymised the data received and analysed it. PwC has not verified, validated or audited the data, and therefore cannot give any undertaking as to the accuracy of the study results. The survey covered 54 taxes listed in the next page. 2 2 Social security contributions were counted as a single tax, however employment insurance was counted separately. Consumption tax and irrecoverable consumption taxes were counted as a single tax, although they are shown separately in the table; similarly, nuclear fuel tax, nuclear fuel handling tax, and nuclear fuel material handling tax were also counted as a single tax Total Tax Contribution 9

16 Figure 1. List of taxes covered by the survey Profit taxes Corporate income tax Enterprise tax income basis Municipal inhabitant tax Prefectural inhabitant tax Prefectural inhabitant tax dividend levy Prefectural inhabitant tax interest levy Withholding income tax (other than salary) Temporary special enterprise tax Mineral product tax Property taxes Automobile acquisition tax Automobile tax Automobile tonnage tax Business premise tax Common facilities tax Fixed assets tax Housing land development tax Light vehicle tax Mining allotment tax Real property acquisition tax Special land holding tax Stamp tax Tonnage tax and special tonnage tax Villadom tax Water supply tax People taxes Withholding income tax - salary Withholding inhabitant tax Employers social security contributions Employees social security contributions Taxes borne Taxes collected 10 Total Tax Contribution 2010

17 Product taxes Consumption tax and local consumption tax Irrecoverable consumption taxes Gasoline tax and local gasoline tax Petroleum gas tax Petroleum coal tax Aircraft fuel tax Diesel oil delivery tax Oil price adjustment tax Liquor tax Tobacco tax and special tobacco tax Prefectural tobacco tax Municipal tobacco tax Custom duty Electric power resources development tax Narrow and small apartment buildings tax Golf course tax Enterprise tax (capital basis and value-added basis) Registration and license tax Lodgment tax Bathing tax Planet taxes Nuclear fuel tax Nuclear fuel handling tax Nuclear fuel material handling tax Spent nuclear fuel tax Industrial waste tax Gravel extraction tax Norikura environmental preservation tax Environmental cooperation tax Environment tax on history and culture Taxes borne Taxes collected 2010 Total Tax Contribution 11

18 Tax compliance cost Domestic tax compliance activity was clearly defined and examples of such activities were provided to ensure that participants provided the correct data. Quantitative and qualitative data on tax compliance activities were also requested for both the central and shadow tax departments, including outsourcing costs associated with such activities. [1] Central and shadow tax departments (1) The central tax department' refers to, irrespective of its name, a division, section, group, etc., of employees who are specialists in tax for the company. (2) The shadow tax department' refers to those established outside of the central specialist tax department who play a role in tax management and compliance. [2] Outsourcing cost Outsourcing costs refer to cost incurred in respect of tax activities performed by external tax service providers. [3] Examples of domestic tax compliance activities Activities common to all taxes Preparing and maintaining tax records to use such records as tax return filing data or complying with tax legislation requirements Collecting information for the preparation of tax returns Preparing and filing tax returns Preparing and examining tax payment slips Paying taxes Responding to enquiries from tax authorities Responding to tax investigations Preparing and filing amended tax returns or request for tax corrections Making decisions related to requests for reinvestigation or filing litigation Making inquiries to authorities pertaining to specific matters Performing various activities to catch up with and responding to tax reforms (incl. IT system amendments) Providing staff members with internal or external training sessions on tax legislation and preparation of tax returns Activities that do not qualify for tax compliance activities Preparing tax returns and statements required under foreign tax laws Evaluating acquisition risk in the course of corporate acquisitions Tax planning Providing tax advice to affiliate companies (If the affiliate company pays for the advice, the company incurs tax compliance cost.) Indirect duties such as administration of tax department by managers in charge of the department 12 Total Tax Contribution 2010

19 [4] Examples of international tax compliance activities Confirming tax convention provisions pertaining to the payment of interests, dividends, and royalties to non-residents Preparing and filing application forms required under tax conventions Collecting information necessary for preparing a tax return for Japanese corporation taxes in relation to overseas business activities (e.g. information on the CFC rule, foreign tax credits, etc.; filing in overseas countries should be excluded) Calculating joint income under the CFC rule; examining exemption test requirements; preparing schedules Documenting transfer pricing policies, economic analyses, agreements, and obtaining APA to comply with the transfer pricing taxation system from the perspective of Japanese corporate income tax Responding to tax investigations on transfer pricing Collecting and computing basic data that supports foreign tax credit application; preparing schedules to be attached to the application 2010 Total Tax Contribution 13

20 Section V. Results of FY 2007/08 survey Participants and their responses 28 companies of the 95 participating companies from 38 corporate groups are included in the top 50 companies in Japan in terms of market capitalisation. Collectively, 38 corporate groups reported a turnover of trillion in FY 2008, 1,058,752 employees, 3 and Total Tax Contribution of trillion. This represents 5.4% of total government tax receipts. The 38 corporate groups which participated in the survey operate in a wide range of industry sectors, i.e. Automobile, Chemical & Pharmaceutical, Electricity & Gas and Information & Communication, Machinery, Iron & Steel and Metal, Oil & Gas, Retailers, and Trading Houses. Figure 2. Survey participants by industry sector (Number of corporate groups in the sector) Trading Houses 5 Automobile 3 Retailers 3 Oil & Gas 3 Iron & Steel and Metal 5 38 corporate groups Chemical & Pharmaceutical 7 Electricity & Gas and Information & Communication 4 Machinery 8 Chart shows the number of corporate groups by industry sector. The survey also collected the following data from participants: turnover, net profit (loss) before tax, number of employees, total amount of salaries, and net interest paid. 3 Number of full time staff and full-time equivalent staff working at domestic premises. The survey however used for convenience, the number of employees recognised as the basis to division key for corporate inhabitant tax. 14 Total Tax Contribution 2010

21 Figure 3. Turnover and other key information on the participants FY 2007 FY 2008 Turnover trillion trillion Net profit (loss) before tax trillion trillion Number of employees 1,046,420 1,058,752 Total amount of salaries trillion trillion Interest paid billion billion Interest received billion billion Figures show the overall amount figures provided by the 95 participants. Number of taxes borne and collected as reported by participants Since the survey covered a wide range of taxes, most of the taxes were not intensively controlled by the central tax department. Therefore, the participants collected relevant data in their own way from business units, offices, etc. As a result of analyzing the data, it was found that the average number of taxes actually paid in by the participants in FY 2008 was There was no significant difference in the average between FY 2007 and FY The mean average number of taxes collected was 6.5. There was no significant difference in the average between FY 2007 and FY Tax compliance cost In the survey, 92 out of 95 participants (96.8%) provided data on their tax compliance cost. Survey participants were asked to provide data on the number of staff in their central and shadow tax departments engaged in tax compliance activities, including costs incurred for such activities. Most participants were unable to identify the accurate number of staff and the number of days worked for tax compliance activities, they provided estimates. Only 70 respondents reported the number of shadow tax department staff, illustrating the difficulty of obtaining such information Total Tax Contribution 15

22 Total Tax Contribution of 95 participants in FY 2007 accounts for 5.4% of government tax receipts. Total Tax Contribution Collectively, the survey respondents reported Total Tax Contribution of trillion in FY 2007 and trillion in FY This accounts for 5.4% of government tax receipts in FY Total Tax Contribution decreased by billion (approx %) over the FY 2007/08 period. The principal reason for this was the decrease of billion in the total corporation taxes paid during the recessionary period. The 95 participating companies represent only % of all Japanese corporations (approx million corporations in total). However, for FY 2007, their contributions accounted for 5.4% of government receipts. This shows that a small number of large-sized companies contribute significantly to the Japanese government. Figure 4. Total Tax Contribution to government FY 2007 FY 2008 Taxes borne Corporation taxes trillion trillion Others trillion trillion Subtotal trillion trillion Taxes collected trillion trillion Total Tax Contribution trillion trillion Total Japanese government receipts trillion 4 5 Percentage of TTC in government receipts 5.4% Table shows all the payments to government reported by participants. Taxes borne The overall amount of taxes borne for the survey participants totalled trillion in FY 2007 and trillion in FY Taxes borne in FY 2007 accounted for 3.2% of government tax receipts in FY Total Japanese government receipts represents the sum of revenues from taxes, stamp duty, social security contributions, and local taxes. It also includes inheritance and other taxes that are not imposed on corporations. 5 Total Japanese government receipts in FY 2008 and the ratio of TTC to government receipts are omitted due to the lack of data on total social security contributions (borne by employers and employees) in FY 2008 as of the date of report preparation. 16 Total Tax Contribution 2010

23 Figure 5. Major taxes borne by participants as a % of government receipts FY 2007 FY 2008 Major taxes borne Total amount reported in the survey (million yen) Government receipts (million yen) % Total amount reported in the survey (million yen) Government receipts (million yen) % Note National taxes (incl. social security contributions) Corporate income tax 1,536,766 14,744, % 947,901 10,010, % Employers social security contributions 1,030,137 27,201, % 1,062, Custom duty 95, , % 84, , % Electric power resources development tax 115, , % 111, , % Automobile tonnage tax 2, , % 2, , % Stamp tax/registration and license tax 17,929 1,201, % 19,149 1,088, % 2 Local taxes Corporate inhabitant tax 457,557 4,198, % 338,385 3,815, % 3 Enterprise tax 598,236 5,607, % 550,335 5,202, % 4 Fixed assets tax 494,985 9,944, % 493,291 10,118, % 5 Business premise tax 32, , % 32, , % Total taxes borne 4,687, ,159, % 3,986, Source: Financial results announced by the Ministry of Finance ( White Paper on Local Public Finance', The Cost of Social Security in Japan FY 2007' issued by National Institute of Population and Social Security Research ( Note 1. The amount of government receipts from social security contributions is the amount of employers' social security contributions. No data has been provided for FY Note 2. The amount of government receipts from stamp tax/registration and license tax is the amount of stamp revenue reported in the national financial results. Note 3. The amount of government receipts from corporate inhabitant tax include prefectural inhabitant tax paid by corporations and municipal inhabitant tax per capita levy and corporate income tax levy, but exclude prefectural inhabitant tax paid by individuals and per interest levy and municipal inhabitant tax per capita levy and income levy. Note 4. The total amount of enterprise tax reported in the survey is the sum of both income-based and size-based enterprise taxes. Note 5. Note 6. The total amount of fixed assets tax reported in the survey and the government receipts from the tax include city planning tax. For the comparison of total taxes borne between FY 2007 and FY 2008, the amount of government receipts' was calculated by aggregating the revenues from taxes, stamps, social security contributions (no data for FY 2008), and local taxes. Note that the amount includes inheritance and other taxes that are not imposed on corporations. Government revenues from profit-based taxes such as corporate income tax, corporate inhabitant tax, and incomebased enterprise tax (hereinafter corporation taxes ) are directly affected by economic fluctuations. However, the survey results showed that, during the economic downturn, there was no significant change in the ratio of total taxes borne by the participants to the government receipts from these taxes. Participants net profit before tax decreased by approx. 62.7% over the FY 2007/08 period, and in conjunction with 2010 Total Tax Contribution 17

24 Corporation taxes are the largest tax burdens borne by the most companies. The ratio of corporation taxes to total taxes borne was 53.4% and 44.1% for FY 2007 and for FY 2008 respectively. this, total corporation taxes decreased by approx. 29.8% over the same period. However, the amount of corporate income tax paid by the participants represented 10.4% and 9.5% of total government tax revenues in FY 2007 and FY 2008, respectively. The same trend was seen for corporate inhabitant tax and enterprise tax. Corporation taxes are the largest tax burdens borne by the survey participants in this survey. The ratio of corporation taxes to total taxes borne was 53.4% and 44.1% for FY 2007 and for FY 2008 respectively. TTC measures taxes on a cash basis. The amount of corporation taxes shown in the financial statements is on an accruals basis. Consequently there is a period mismatch of one year between the charges based on profit before tax and the amount of corporation taxes paid in a financial year. Thus, any deterioration in FY 2008 results will be recognised as a decrease in FY 2009 corporation taxes. Figure 6. Corporation taxes as a percentage of total taxes borne in FY 2007/08 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 44.7% 1.9% 10.9% 4.5% 5.3% 32.8% 53.4% 53.9% 2.0% 11.8% 4.0% 4.5% 23.8% 44.1% Other taxes borne Size-based enterprise tax Corporation taxes Income-based enterprise tax Municipal inhabitant tax Prefectural inhabitant tax Corporate income tax 0% FY 2007 FY 2008 Chart shows the different components of overall taxes borne for FY 2007 and FY Total Tax Contribution 2010

25 Comparing the components of taxes borne for FY 2007 and FY 2008 regarding the total amount paid by participants for corporation tax, employers social security contributions, and fixed assets tax, as shown on Figure 7, while corporate income tax decreased reflecting the deterioration in business performance, employers social security contributions remained virtually unchanged. As a result, participants total employers social security contributions exceeded total corporate income tax. In FY 2008, corporate income tax was billion, and employers social security contributions were trillion. It shows that employers social security contributions would be necessary to take the factor into consideration when discussing the level of taxes to be levied on businesses, because social security contribution is a fixed tax borne for employers, therefore, during a recession period, it is likely to represent an increasing percentage of total taxes borne together with other fixed taxes borne (e.g. fixed assets tax). Figure 7. Movements of the different taxes borne over FY 2007/08 (100 million yen) 18,000 16,000 14,000 12,000 10,000 8,000 6,000 4,000 2,000 15,368 10,301 10,628 9,479 4,950 4,933 Employers social security contributions Corporate income tax Fixed assets tax 0 FY 2007 FY 2008 Figure 7 shows movements for corporate income tax, employers social security contribution and fixed assets tax (overall numbers) Total Tax Contribution 19

26 Taxes collected tend to depend on limited industries. 68% of government gasoline tax revenues was collected by four companies. Taxes collected Total taxes collected was trillion and trillion in FY 2007 and FY 2008 respectively. In aggregate, the amount collected in FY 2007 represents 2.2% of government receipts. Gasoline tax was the largest tax collected overall, followed by employees social security contributions and withholding income tax from salary. Approx. 68% of government gasoline tax revenues was paid by four survey participants who provided data on gasoline tax. Similarly, approx. 54% of government petroleum coal tax revenues was accounted for by the amount paid by eight respondents. This demonstrated once again the heavy dependence for the two taxes on a limited number of companies. Figure 8. Major taxes collected by participants as a% of government receipts FY 2007 FY 2008 Major taxes collected Total amount reported in the survey (million yen) Government receipts (million yen) % Total amount reported in the survey (million yen) Government receipts (million yen) % Note National taxes (incl. social security contributions) Withholding income tax (other than salary) 126,193 4,879, % 129,384 4,444, % Withholding income tax (salary) 422,249 10,138, % 418,092 9,987, % Employees social security contributions 910,284 29,673, % 938, Consumption tax (incl. local consumption tax) -221,631 12,841, % -262,987 12,442, % Petroleum coal tax 280, , % 276, , % Gasoline tax (incl. local gasoline tax) 1,398,838 2,110, % 1,285,378 1,889, % Local taxes Withholding inhabitant tax 365,810 12,116, % 387,271 12,422, % 2 Diesel oil delivery tax 11,899 1,033, % 9, , % Total taxes collected 3,305, ,159, % 3,193, Table shows national and local taxes collected reported by participants in context of government receipts for FY 2007 and FY Source: Financial results announced by the Ministry of Finance ( White Paper on Local Public Finance', The Cost of Social Security in Japan FY 2007' issued by National Institute of Population and Social Security Research ( Note 1. The amount of government receipt from social security contributions represents amounts for social security contributions paid by insured persons (employees). Note 2. The amount of government receipt from withholding inhabitant tax is the sum of prefectural inhabitant tax paid by individuals and municipal inhabitant tax (per capita levy and income levy). Note 3. For the comparison of total taxes collected between FY 2007 and FY 2008, the amount of government receipts' was calculated by summing revenues from taxes, stamps, social security contributions (no data for FY 2008), and local taxes. Note that the amount includes taxes that are not imposed on, or collected by, corporations. 20 Total Tax Contribution 2010

27 Local taxes Japan operates a decentralized tax system. National taxes represent 3/4 of Total Tax Contribution and the remainder relates to local taxes in FY 2007 and This is similar to the proportion of national taxes to local taxes in the US where federal taxes represented 75.5% of Total Tax Contribution. (Source: Total Tax Contribution; How much do large U.S companies pay in taxes? December 2007). Examining local taxes borne, incomebased enterprise tax is the largest component at 31.6% of the total amount in FY 2007, while in FY 2008, fixed assets tax was the largest local tax at 34%. Fixed assets tax and size-based enterprise tax were unaffected by the economic cycle. National taxes represent ¾ of Total Tax Contribution and the remainder relates to local taxes. This proportion is almost same between in FY 2007 and in FY Also this is similar to the proportion of national taxes to local taxes in the US. Figure 9. National and local taxes split of Total Tax Contribution (FY 2008) Local tax 26% National tax 74% Chart shows the split between national and local taxes in Japan for the survey (overall basis) Total Tax Contribution 21

28 Total Tax Contribution as a percentage of value distributed The value-added generated by businesses is measured in terms of wages, interests, dividends, retained earnings, etc., and is national income when distributed. In this survey, value-added is taken to be the aggregate of net interest payments, wages and salaries (the value used as the tax base for value-added based enterprise tax), net profit after tax, and taxes borne and collected (Total Tax Contribution). Labour s share is the ratio of wages and salaries to the total value-added while the ratio of Total Tax Contribution to the total value-added is referred to as the public distribution ratio in this report. It refers to value distributed to government and other public sector organisations. Participants labour s share increased from 31.8% in FY 2007 to 42.2% in FY This is mainly as a result of the declining value-added due to falling net profit after tax from FY 2007 to FY The total amount of wages and salaries remained fairly stable in the two-year period at just over 8 trillion for the participants. Putting the above the results in context of the Japanese economy, it is worthwhile understanding what the overall employment environment and statistics were. Labour Force Surveys (2008-present) published by the Ministry of Internal Affairs and Communications, show that the number of workers in employment in Japan started to decline in May 2008 after reaching the peak at million. From November 2008, the decrease in the number of employees was significant and continuous until March 2009 where the number of employed workers stood at million. The Labour Force Surveys show that employment at its lowest in February 2010 at million following a temporary recovery. Following the collapse of Lehman Brothers, business worsened drastically from the second half of 2008, and companies were forced to reduce labour cost. The effect of this was not visible before 2009 due to redundancy restrictions in employment contracts, etc. Accordingly, labour s share of value-added increased in this survey as there were no reduced labour cost and total value-added was smaller in We will monitor the changes in labour s share in next year s survey. The public distribution ratio increased from 39.7% in FY 2007 to 47.7% in FY As the total amount of valueadded distributed decrease in an economic downturn, it is assumed in the long term companies will be forced to take actions to reduce labour s share if the amount of taxes borne and collected remain stable. 22 Total Tax Contribution 2010

29 Figure 10. Value distributed to stakeholders Government (Public distribution ratio) 39.7% Total taxes collected 16.4% Net profit after tax Investors and capital investments Total taxes borne 23.3% Financial year ended in March % Net interest paid 1.4% Total salaries (excl. employment taxes collected) 31.8% Employees Investors and capital investments Government (Public distribution ratio) 47.7% Total taxes collected 21.2% Net profit after tax 8.0% Total taxes borne 26.5% Financial year ended in March 2009 Total salaries (excl. employment taxes collected) 42.2% Net interest paid 2.1% Employees The chart shows the % of value distributed to different stakeholders in FY 2007 and FY Total Tax Contribution 23

30 Total Tax Rate in FY 2007/08 The Total Tax Rate (TTR) is a measure of the burden of all taxes borne on a particular business. The average Total Tax Rate for the survey participants increased from 41.6% in FY 2007 to 58.2% in FY In an economic downturn, we find that while profits and taxes on profits may fall, other non-profit related taxes do not fall to the same degree and thus become relatively more expensive. In FY 2008, other taxes borne other than corporation taxes accounted for more than 50% of total taxes borne. During a recession, for example in the magnitude of collapse of Lehman Brothers, it is expected that social security contributions are even a bigger burden on businesses. Total Tax Rate 41.6% 58.2% (FY 2007) (FY 2008) 24 Total Tax Contribution 2010

31 Figure 11. Total Tax Rate for survey participants in FY 2007/08 70% 60% 50% 40% 30% 20% 10% 0% 58.2% 18.2% 41.6% 9.7% 18.8% 11.9% 20.0% 21.3% FY 2007 FY 2008 Corporation taxes Employers social security contributions Other taxes borne Figure 12. Distribution of Total Tax Rate for survey participants in FY 2007/08 Financial year ended in March 2008 Number of data items % 12% 14%16%18% 20% 22%24% 26% 28%30% 32% 34%36% 38% 40% 42%44%46% Mean average: 41.6% 48% 50%52% Total Tax Rate 54% 56%58% 60% 62%64%66% 68% 70%72% 74% 76%78% 80% 82%84% 84% 86% Financial year ended in March 2009 Number of data items 4 Mean average: 58.2% % 12 % 14 % 16 % 18 % 20 % 22 % 24 % 26 % 28 % 30 % 32 % 34 % 36 % 38 % 40 % 42 % 44 % 46 % 48 % 50 % 54 % 56 % 58 % 60 % 62 % 64 % 52 % Total Tax Rate 66 % 68 % 70 % 72 % 74 % 76 % 78 % 80 % 82 % 84 % 86 % 88 % 90 % 92 % 94 % 96 % 2010 Total Tax Contribution 25

32 Total Tax Contribution as a percentage of domestic turnover TTC as a % of turnover indicates the size of the contribution in the context of the size of the operations. Based on the survey results, the average percentage of turnover was 6.8% for FY 2007 and 6.4% for FY The decrease in the TTC as a percentage of domestic turnover is driven by the fall in both total turnover (7.8%) and Total Tax Contribution (10.2% in aggregate). Figure 13. Distribution of TTC as percentage of turnover in FY 2007/08 Financial year ended in March 2009 n=36 Number of data items % 1% 2% 3% 4% 5% 6% 7% 8% Financial year ended in March 2009 n=36 Number of data items % 1% 2% 3% 4% 5% 6% 7% 8% Mean average : 6.8% 9% TTC to turnover ratio Mean average : 6.4% 9% TTC to turnover ratio 10 % 11 % 12 % 13 % 14 % 15 % 16 % 17 % 18 % 19 % 20 % 21 % 22 % 23 % 24 % 10 % 11 % 12 % 13 % 14 % 15 % 16 % 17 % 18 % 19 % 20 % 21 % 22 % 23 % 24 % 26 Total Tax Contribution 2010

33 Employment taxes The number of employees employed by survey participants during FY 2007 totalled 1,046,420. This represents approx. 1.6% of the number of employees reported for the same year in the Labour Force Survey, 6 i.e million employees. Employer social security contributions by survey participants in FY 2007 totalled trillion, representing approx. 3.8% of employer social security contributions received by the government in FY As survey participants are leading large-scaled companies, the amount of salary they pay to the employees is higher than the national average. Accordingly, the amount of their social security contributions is considered to be larger than others in proportion to the level of salary. The ratio of employers social security contributions by survey participants to government receipts for employers social security contributions is lower than the ratio of corporate income tax paid by survey participants to government corporate income tax revenues in FY 2007 (10.4%). Figure 14. Number of employees and total amount of salaries paid by participants FY 2007 FY 2008 Year-over-year comparison(%) Number of employees 1,046,420 1,058, Total amount of salaries (yen) trillion trillion -0.2 The total employment taxes paid by survey participants are shown below. In FY 2007, the total employment taxes paid by survey participants accounted for 3.4% of total government receipts corresponding to it. Figure 15. Total employment taxes paid by survey participants FY 2007 (yen) FY 2008 (yen) Year-over-year comparison(%) Employer s social security contributions trillion trillion 3.2 Withholding income tax - salary billion billion Withholding inhabitant tax billion billion Employees social security contributions billion billion Total trillion trillion Annual Report on the Labour Force Survey (Basic Tabulation) by the Labour Force Statistics Office, Population Census Division, Statistical Survey Department, Statistics Bureau, Ministry of Internal Affairs and Communications Total Tax Contribution 27

34 The overall average of employment taxes per employee paid by survey participants was 2,650,864 in FY 2008 ( 2,607,441 in FY 2007). It is made up of 1,003,797 for employees social security contributions and 1,647,065 for withholding income tax from salary, withholding inhabitant tax, and contributions borne by employees. Figure 16. Employment taxes per employee Taxes borne Taxes collected Total Taxes borne Taxes collected Total All (38) company basis 984,438 1,623,002 2,607,441 1,003,797 1,647,065 2,650,863 Average 1,149,338 2,273,933 3,423,271 1,138,922 2,220,913 3,359,836 Individual company basis Median 1,013,459 1,801,506 2,839,574 1,001,520 1,825,699 2,842,476 Smallest 219, , , , , ,856 Largest 3,679,468 6,928,388 10,607,856 3,709,737 6,872,502 10,582,239 Number of samples FY 2007 FY 2008 (yen) Note: Taxes borne' here represent employers' social security contributions; taxes collected' represent the sum of withholding income tax from salary, withholding inhabitant tax, and employees' social security contributions. This survey also looked at the ratio of employment taxes to total amount of salaries. The median value was 32.2% for FY 2007 and 31.3% in FY According to a survey conducted by OECD in 2008, 7 the ratio of withholding income tax from salary and social security contributions to labour cost was 29.5% for single persons without children in Japan. Our survey results show higher results than the OECD s. The ratio of employment taxes to total amount of salaries depends on the family composition of employees and the income level in case where the rate is progressive. Figure 17. Employment taxes as a percentage of total amount of salaries Taxes borne Taxes collected Total Taxes borne Taxes collected Total All (38) company basis 12.7% 20.9% 33.6% 13.1% 21.5% 34.6% Average 11.8% 22.0% 33.8% 11.7% 21.7% 33.4% Individual company basis Median 10.8% 20.5% 32.2% 11.4% 20.1% 31.3% Smallest 5.3% 11.5% 17.0% 5.0% 11.4% 16.8% Largest 22.9% 43.1% 66.1% 25.1% 46.6% 71.7% Number of samples FY 2007 FY Note: Taxes borne' here represent employers social security contributions ; taxes collected' represent the sum of withholding income tax from salary, withholding inhabitant tax, and employees social security contributions. 7 Taxing Wages 2008/2009 by OECD. The single person at 100% of average earnings, no child category was used for comparison purpose. 28 Total Tax Contribution 2010

35 Figure 18. Composition of employment taxes per employee in FY 2007/08 (yen) 3,000,000 2,500,000 2,000,000 1,500,000 1,000, , , , , , ,892 Employees social security contributions Withholding inhabitant tax Withholding income tax from salary Employers social security contributions 500, ,439 1,003,798 0 FY 2007 FY 2008 TTR analysis based on FY 2007/08 combined data In FY 2008, in the aftermath of the collapse of Lehman Brothers, corporate earnings decreased significantly. As the survey was conducted on a cash basis, corporation taxes payments in that year related to the period ended in March The combination of these two factors led to a generally higher TTR tax rate for FY In order to eliminate the fluctuations and the effects of the latter in FY 2007 and FY 2008, the Total Tax Rate was calculated by using the average of the two years' data. The overall Total Tax Rate (TTR) for the 38 corporate groups on the all-company basis (A), was 56.6%. The overall average TTR for each corporate group, the lowest TTR was 17.6% and the highest was 160.3%.The mean average (B) and median value (C) 8 were 50.4% and 51.0%, respectively. Comparing TTR and the effective corporation tax rate, 9 TTR is an index of the ratio of all taxes borne to adjusted net profit before all taxes borne while the effective corporation tax rate is the Total Tax Contribution 29

36 ratio of corporation taxes to net profit before tax. The average effective corporation tax rate for survey participants was 35.5% (excl. domestic withholding income tax). The actual tax rate calculated by adding employers' social security contributions to the above (hereinafter referred to as tax rate in narrow sense') was 44.5%. Looking at TTR from the viewpoint of local tax and national taxes, the mean average TTR of 50.4% is made up of 31.8% national taxes and 18.6% local taxes that represent a larger percentage of the TTR are fixed assets tax (6.0%), income-based enterprise tax (5.8%), corporate inhabitant tax (4.3%). It must be noted that, as seen in the industry analysis, the ratios differ depending on the industry. Figure 19. Total Tax Rate (based on FY 2007/08 combined data) Excl. TTR>100% All company basis (A) 56.6% - Average (B) 54.1% 50.4% Median (C) 51.8% 51.0% Smallest ratio 17.6% 17.6% Largest ratio 160.3% 91.0% Number of sample companies Total Tax Contribution 2010

37 Figure 20. Effective corporation tax rate, tax rate in narrow sense, overall Total Tax Rate 60.0% 50.0% 40.0% 1.4% 0.7% 50.4% 4.9% 6.0% 30.0% 14.6% Other taxes 20.0% 10.0% 35.5% 44.5% 22.7% Size-based enterprise tax Business premise tax Fixed assets tax Employers social security contributions Corporation taxes 0.0% Effective corporation Tax rate in narrow sense tax rate (Corporation taxes+social (Corporation taxes/ security contributions/ Profit before tax) Adjusted profit before tax) Total Tax Rate Figure 21. The split of national and local taxes for TTR Local tax 18.6% 4.3% National tax 31.8% 50.4% Local tax 18.6% 5.8% 1.4% Corporation inhabitant tax Income-based enterprise tax 6.0% Size-based enterprise tax Fixed assets tax 0.7% 0.5% Business premise tax Other taxes 2010 Total Tax Contribution 31

38 Section VI. Industry comparisons The 38 participant corporate groups were divided into three major categories: Manufacturing, 10 Wholesalers & Retailers, Electricity & Gas, and Information & Communication. They were further categorised into eight industry sectors: 1) Automobile 2) Chemical & Pharmaceutical 3) Electricity & Gas and Information & Communication 4) Machinery 5) Iron & Steel and Metal 6) Oil & Gas 7) Retailers 8) Trading houses. The results show the composition and level of tax burden differ significantly depending on the industry. Figure 22. Percentage of Total Tax Contribution by industry sector (FY 2008) 3.0% 0.0% Effective corporation tax rate for Electricity & Gas and Information & Communication companies was significantly higher than the average of all industries. Total Tax Rate for these companies was 66.5% which was also significantly higher than the others. 25.1% 9.6% 12.3% 9.5% The four corporate groups in the Electricity & Gas and Information & Communication sector represent 10.5% 5.0% 35.6% The chart shows the overall taxes borne and collected by industry sector. Automobile Chemical & Pharmaceutical Electricity & Gas and Information & Communication Machinery Iron & Steel and Metal Oil & Gas Retailers Trading Houses of all survey participants (38 corporate groups) but represent 35.6% of all taxes borne and collected (Total Tax 32 Total Tax Contribution The results of Manufacturing industry reflect the results for survey participants who belong to Automobile, Chemical & Pharmaceutical, Machinery, and Iron & Steel and Metal industries.

39 Contribution) by survey participants in FY The Electricity & Gas and Information & Communication companies are characterised by stable business performance, there was no decline in turnovers (0% change) and a minor decline in net profit before tax (only 14% compared to 62.7% on average for all survey participants) for the FY 2007/08 period. Furthermore, effective corporation tax rate for Electricity & Gas and Information & Communication companies was 48.8%, or 50.6% when withholding income tax was included, which was significantly higher than the average of all industries (35.5%). The average Total Tax Rate for this sector was 66.5% based on the FY 2007/08 combined data as companies in this sector paid also relatively high fixed assets tax and other taxes. Oil & Gas companies have the second largest Total Tax Contribution, representing 25.1% of the survey Total Tax Contribution. For Oil & Gas companies, taxes collected were significantly larger than taxes borne, and the ratio of taxes borne to taxes collected was 1 to 6.5 in FY This means that for every 1 of tax a company bears, it will also collect 6.5 on behalf of government. The TTC by Oil & Gas companies in FY 2008 was trillion, out of which trillion was taxes collected. Most of the taxes collected by Oil & Gas companies were oil-related taxes. The oil-related taxes collected by Oil & Gas companies in FY 2008 totalled trillion: made up of gasoline tax: trillion, other oil-related taxes: trillion. Trading houses have a higher ratio of other taxes borne, most of which (98%) is accounted for by custom duty Total Tax Contribution 33

40 Figure 23. Overall changes in financial indicators by sector during FY 2007/08 Automobile Chem. & Pharm. Elec. & Gas and Info. & Comm. Machinery Iron & Steel and Metal Oil & Gas Retailers Trading Houses Turnover -21.9% -9.3% 0.0% -8.5% 7.3% -2.2% -1.8% -6.3% Net profit before tax -94.9% -65.0% -9.2% % -41.0% % 5.6% -51.1% Number of employees Wages and salaries paid -2.6% 2.2% 3.1% 1.9% 2.3% -1.7% -2.5% 3.4% 4.6% -0.5% -1.9% -0.5% -3.8% -5.9% 5.5% 1.2% Figure 24. Total Tax Contribution by sector (FY 2007/08) FY 2007 (yen) FY 2008 (yen) Year-over-year comparison (%) Composition ratio FY 2007 FY 2008 Automobile billion billion % 9.5% Chem. & Pharm billion billion % 5.0% Elec. & Gas and Info. & Comm trillion trillion % 35.6% Machinery trillion billion % 12.3% Iron & Steel and Metal billion billion % 9.6% Oil & Gas trillion trillion % 25.1% Retailers billion billion % 3.0% Trading houses billion 1.3 billion % 0.0% trillion trillion % 100% A comparison was made between industries about effective corporation tax rate, tax rate in narrow sense, and Total Tax Rate. The basic data provided by 38 corporate groups for FY 2007 and FY 2008 was aggregated by corporate group to eliminate disparities between the two years. The TTR for each corporate group excluding lossincurring companies and companies with negative values or values exceeding 100% was then calculated. A mean average of TTR by peer group was then calculated. Using the above procedure, Total Tax Rate was calculated for three sectors, i.e. Manufacturing, Wholesalers & Retailers, and Electricity & Gas and Information & Communication. TTR for Wholesalers & Retailers was low at 40.1%, compared to that for companies in the other two: 51.5% for Manufacturing companies and 66.5% for Electricity & Gas and Information & Communication companies. For Electricity & Gas and Information & Communication, Retailers, Machinery, and Chemical & Pharmaceutical companies, TTR was higher than the overall average of 50.4%. 34 Total Tax Contribution 2010

41 Figure 25. Total Tax Rate in the Manufacturing, Wholesalers & Retailers, and Electricity & Gas and Information & Communication sectors 70.0% 60.0% 50.0% 40.0% 30.0% 20.0% 10.0% 0.0% 51.5% 1.2% 1.5% 5.0% 0.7% 17.0% 26.0% Manufacturing 1.5% 40.1% 10.9% 4.9% 12.0% 10.1% Wholesalers and Retailers 0.7% 0.5% 66.5% 8.2% 12.2% 11.8% 33.5% Electricity & Gas and Information & Communication 0.3% Other taxes borne Size-based enterprise tax Business premise tax Fixed assets tax Employers social security contributions Corporation taxes Figure 26. Total Tax Rate by sector 70.0% 60.0% 50.0% 40.0% 30.0% 20.0% 10.0% 0.0% Automobile Chemical & Pharmaceutical Machinery Electricity & Gas and Information & Communication Iron & Steel and Metal Retailers Trading Houses Other taxes borne Size-based enterprise tax Business premise tax Fixed assets tax Employers social security contributions Corporation taxes Figure 27. Effective corporation tax rate, tax rate in narrow sense, and Total Tax Rate by sector 70.0% % % % % 20.0% 10.0% 0.0% Automobile Chemical & Pharmaceutical Machinery Electricity & Gas and Information & Communication Iron & Steel and Metal Retailers Trading Houses Total Effective corporation tax rate (Corporation taxes/profit before tax) Tax rate in narrow sense TTR 2010 Total Tax Contribution 35

42 Section VII. Movements in FY 2007/08 period Movements in participants financial conditions Influenced by the volatile economic situation in the FY 2007/08 period, the overall net profit before tax of participants decreased by approx. 62.7% over the same period. Aggregate turnover decreased by approx. 6.8%. Total amount of salaries 11 remained almost unchanged (a 0.2% decrease) between FY 2007 and FY The number of employees increased slightly by 1.2%. Both interest paid and interest received decreased; there was a significant decrease (12.9%) in interest received. Figure 28. Movement in financial data provided during FY 2007/08 FY 2007 FY 2008 Year-over-year comparison (%) Turnover trillion trillion -6.8 Net profit before tax trillion trillion Number of employees 1,046,420 1,058, Total amount of salaries trillion trillion -0.2 Interest paid billion billion -4.0 Interest received billion billion Movements in taxes borne In FY 2008, overall taxes borne decreased by approx. 15% on a yearover-year basis, whereas corporation taxes 12 decreased by approx. 29.8%. This decrease was greater than the decrease in government revenues (22.4%) for corporate income tax, corporate inhabitant tax, and enterprise tax (incl. amount levied based on the size-based taxation). Taxes borne other than corporation taxes increased slightly (an increase of 45 billion over the FY 2007/08 period) as employers social security contributions edged up marginally and that there were only minor fluctuations in fixed assets tax, etc. 11 The sum of wages and salaries that are computed as the tax base for value-added-based enterprise tax. 12 The sum of taxes that are levied on the basis of corporate income, such as corporate income tax, income-based enterprise tax, and corporate inhabitant tax. 36 Total Tax Contribution 2010

43 Figure 29. Movements in major taxes borne and total taxes borne FY 2007 (yen) FY 2008 (yen) Year-over-year com-parison (%) Employers social security contributions trillion trillion 3.2 Corporate income tax trillion billion Fixed assets tax billion billion -0.3 Enterprise tax-income basis billion billion -7.6 Prefectural inhabitant tax billion billion Municipal inhabitant tax billion billion Custom duty 95.8 billion 84.2 billion Petroleum coal tax 57.0 billion 80.4 billion 41.0 Gasoline tax (national and local) 26.6 billion 37.6 billion 41.3 Total taxes borne trillion trillion Table shows total taxes borne paid by participants in the survey. When looking at changes of the major local taxes in the survey, it was found that there was a significant decrease in local inhabitant tax. Fixed assets tax and business premise tax showed only minor fluctuations. Figure 30. Major local taxes Prefectural inhabitant tax Municipal inhabitant tax FY 2007(yen) FY 2008(yen) Year-over-year comparison (%) billion billion -26.9% billion billion -25.0% Enterprise tax-income basis billion billion -7.6% Fixed assets tax Business premise tax Enterprise tax-capital basis and value added basis billion 32.2 billion 32.5 billion Table shows total taxes collected as reported by participants in the survey billion -0.3% 1.0% 88.2 billion 79.1 billion -10.3% Movements in taxes collected Taxes collected reported in FY 2007 and FY 2008 were trillion and trillion respectively, representing an approx. 3.4% decrease year on year. This indicates that, compared to taxes borne, taxes collected tend to decrease at a lower rate. Taxes collected that showed a significant decrease were gasoline tax, withholding income tax from salary, and petroleum coal tax. In FY 2008, government gasoline tax revenues decreased by 10.5% from FY 2007, whereas petroleum coal tax decreased by 1.5%. It is difficult 2010 Total Tax Contribution 37

44 to determine the exact cause for the FY 2008 increase in the amount refunded consumption tax. 13 Although some participants reported an increase in amounts refunded, the amount of consumption tax paid decreased at a higher rate than the sum of overall changes. Participants with a significant decrease in the consumption tax payment were not necessarily manufacturers of export products. It is assumed that, in addition to the increase in sales qualifying for export exemption as percentage of sales, there are other factors that have influenced the decrease in consumption tax, such as a decrease in domestic sales when purchases and capital investments remain constant, and an increase in purchases and capital investments when sales remain constant, and the timing of tax refund for interim payment. Figure 31. Movements major taxes collected FY 2007 (yen) FY 2008 (yen) Year-over-year comparison (%) Gasoline tax (national and local) Employers social security contributions trillion trillion billion billion 3.1 Withholding income tax salary billion billion -1.0 Withholding inhabitant tax Petroleum coal tax billion billion billion billion -1.5 Withholding income tax other than salary billion billion 2.5 Prefectural inhabitant tax dividend levy Diesel oil delivery tax 9.2 billion 9.7 billion billion 9.5 billion Petroleum gas tax 800 million 900 million 10.6 Oil price adjustment tax 200 million 200 million -8.9 Prefectural inhabitant tax interest levy 800 million 100 million Liquor tax million 100 million 96.2 Consumption tax billion billion 18.7 Sum of taxes collected trillion trillion -3.4 Movements in Total Tax Contribution The Total Tax Contribution of survey participants (95 companies in 38 corporate groups) decreased by approx % or billion; from trillion in FY 2007 to trillion in FY The decrease was driven by a fall in corporate income tax payments. 38 Total Tax Contribution The refund is made when the amount of consumption tax on purchase exceed the amount of consumption tax paid on taxable turnover. The basis of the refund is that, to eliminate the multiple taxation effect that increases a product s ultimate price, business operators are entitled to deduct the amount of consumption tax paid for their purchases during a manufacturing or distribution process prior to the final consumption process because of the nature of consumption tax. Commonly cited reasons for an increase in the refund are a decrease in taxable turnover and an increase in tax-exempt turnover with input consumption tax deduction. Because it is a refund of consumption tax paid as part of purchase price, there is no effect on the company s revenue. 14 The total amount also includes golf course tax, bathing tax, and lodgement tax.

45 Section VIII. Cost of tax compliance Taxes paid are not the only burden imposed on businesses by the tax authorities. Simplifying a taxation system will ensure neutrality of taxation of all economic activities and have the same political effect as a tax rate reduction. There is no real data available to understand the reality of tax compliance costs incurred by Japanese companies. In this survey, quantitative measurements and analyses were made in relation to the internal and external costs required for the tax payment process and other procedures associated with taxes and social security contributions. Number of staff in the tax department The average number of participants tax department staff was 15.5, and the median value was 8 (based on valid responses from 92 companies). The average number of employees engaged in international and domestic tax compliance was calculated by summing each respondent s annual number of days worked by central or shadow tax department employees and then dividing the sum by 240, an assumed number of days worked per employee per annum. As a result, it was found that a total of 8 employees were engaged in domestic tax compliance (based on valid responses from 87 companies) and 2 employees were engaged in international tax compliance (based on valid responses from 70 companies). Figure 32. Distribution of the number of staff in the tax department n= Number of companies Median: 8.0 Mean average: Number of tax department staff 2010 Total Tax Contribution 39

46 The survey was designed to analyse not only corporate taxes, but also to look at the various tax, therefore, the both of compliance costs incurred by the central tax department and the shadow tax departments were subject to the survey. Shadow tax departments often have employees engaged in return filing, payment, and collection of taxes and social security contributions. The survey found that 39% of total tax compliance days was incurred by shadow tax departments. Figure 33. Total number of days required per annum for compliance activities - split by department (central or shadow tax) Shadow tax departments 39% Central tax department 61% Out of the total number of days required per annum for tax compliance activities performed by central and shadow tax departments, 53% was related to corporate income tax, 5% for corporate inhabitant tax and enterprise tax, and 27% for withholding income tax from salary, withholding inhabitant tax, and social security contributions. On the other hand, where compliance activities were limited to those performed by the central tax department only, 84% related to corporate income tax, corporate inhabitant tax, and enterprise tax. 40 Total Tax Contribution 2010

47 Figure 34. Total number of days required per annum for compliance activities performed by central and shadow tax departments - by tax item Fixed assets tax 3% Stamp tax/registration and license tax 1% Consumption tax 5% Others 6% Withholding income tax from salary/ Withholding inhabitant tax/ Social security contributions 27% Corporate income tax 53% Corporate inhabitant tax/ Enterprise tax 5% Figure 35. Total number of days required per annum for compliance activities performed by central tax department - by tax item Fixed assets tax 3% Stamp tax/registration and license tax 1% Consumption tax 6% Withholding income tax from salary/ Withholding inhabitant tax/ Social security contributions 3% Corporate inhabitant tax/ Enterprise tax 7% Others 3% Corporate income tax 77% 2010 Total Tax Contribution 41

48 In shadow tax departments, 64% of the total number of days required per annum for tax compliance activities related to withholding income tax from salary, withholding inhabitant tax and social security contributions. Figure 36. Total number of days required per annum for compliance activities performed by shadow tax departments - by tax item Fixed assets tax 3% Stamp tax/ Registration and license tax 1% Consumption tax 3% Others Corporate 11% income Corporate inhabitant tax/ tax Enterprise tax 17% 1% Withholding income tax from salary/ Withholding inhabitant tax/ Social security contributions 64% 42 Total Tax Contribution 2010 Tax compliance cost The cost of tax compliance includes not only internal expenses mentioned above, but external expenses incurred when outsourcing tax related services. The research on the tax compliance cost focused on FY The tax compliance cost was divided into domestic tax compliance cost and international tax compliance cost. The results were measured by individual companies. 87 companies provided data on domestic tax compliance, whereas 50 companies provided data on international tax compliance. The term international tax compliance' herein exclusively refers to tax compliance-related functions which domestic companies are required to perform under Japanese tax legislation. The functions that are not included in the latter are: parent companies' support for their overseas subsidiaries to meet compliance requirements under the host countries' tax legislation, and tax compliance-related functions which domestic companies are required to perform to meet compliance requirements under foreign tax legislation. We requested the annual total number of days during which employees were engaged in tax compliance activities, by tax item and by job grade (general managers, managers, assistant managers, and non-managerial employees). For each job grade, we obtained the cost of tax compliance by multiplying the number of days by the average daily charge out rate. The average daily compensation amount per day was obtained from the FY 2008 Basic Survey on Wage Structure using a sampling of companies with 1,000 employees or more. Outsourcing cost and amortisation of internallydeveloped computer systems were included in the scope of domestic tax compliance. For the cost of international tax compliance, we limited the scope of

49 taxes to corporation taxes and calculated the annual total number of days by job grade similarly to the domestic tax compliance. Outsourcing costs were also included in the scope million was spent for domestic tax compliance and 44.3 million for international tax compliance. The average costs of corporation taxes compliance per participant was 89.3 million. 55% of the total tax compliance cost was incurred for the administration of corporation taxes. Given that the corporation taxes represent only 24% of the sum of Japan's national and local taxes (less personal income tax and inheritance tax), this demonstrates that the corporation taxes is ineffective tax with associated compliance cost of over 50% of total tax compliance cost. On the other hand, consumption tax represents a minor percentage (3%), which is a characteristic of tax compliance cost incurred in Japan. Figure 37. Compliance costs split by type of tax Fixed assets tax 2% Stamp tax/ Registration and license tax 1% Consumption tax 3% Others 6% Withholding income tax from salary/ Withholding inhabitant tax/ Social security contributions 33% Corporate income tax 53% Corporate inhabitant tax/ Enterprise tax 2% Figure 38. Components of tax compliance costs for corporation taxes per company Compliance cost for corporation taxes Components Domestic tax compliance (labour costs) Domestic tax compliance (outsourcing and other costs) International tax compliance (labour costs) International tax compliance (outsourcing and other costs) million million million million million The table shows the make-up of average tax compliance costs for a company in the study; classified between domestic and international, distinguishing between internal and external costs. (yen) 2010 Total Tax Contribution 43

50 Simplification of taxation system will require consideration of both domestic and international taxes. The largest component of the international tax compliance cost relates to transfer pricing taxation (52%), followed by foreign tax credits (21%), and the CFC rule (anti-tax haven legislation) (13%). In the 2009 tax reform, the foreign dividend exemption rule was introduced, and in the 2010 tax reform, the trigger tax rate under the CFC rule was reduced from 25% to 20%. Results from our surveys in the next and subsequent years will clarify whether these reforms were effective or not to reduce the cost of tax compliance. On the other hand, certain measures should be taken in relation to the transfer pricing taxation system, for which more than 50% of international tax compliance cost is incurred in view of reducing the burdens imposed on businesses. Figure 39. International tax compliance cost Others 14% Foreign tax credits 21% Transfer pricing taxation 52% CFC rule 13% The chart shows average international tax compliance cost for a company in the study split by type of tax. Survey participants were also asked to list three items that impose the heaviest administrative burden and largest cost (e.g. difficult to manage using computer system, a significant number of personnel is required, etc.)." The top three responses were responses to tax investigations", adjustments in filing corporation taxes return" and preparation of attachments to corporate income tax return". 44 Total Tax Contribution 2010

51 Figure 40. Items that impose the heaviest administrative burden and largest cost Responses to tax investigations 66 Adjustments in filing a final tax return for differences between accounting and taxation rules 51 Attachments to corporate income tax return form 34 Calculation of value-added-based enterprise tax 25 Filing of local tax return for each municipal government 20 Withholding of employee income tax, etc. 20 Calculation of consolidated tax payment 17 Management of depreciable asset ledger (accounting, national tax, fixed assets tax) 14 Filing of amended return for multiple prior periods due to corporation tax correction Calculation of consumption tax credits on taxable purchases 9 10 Filing of business premise tax return 7 Administrative affairs for electronic filing 3 Others 3 Stamp tax management 1 Calculation of income tax on financial income (e.g. dividends and interests) Total Tax Contribution 45

52 Section IX. International comparisons Overall comparison Prior to the Total Tax Contribution survey in Japan, PwC conducted similar TTC surveys in nine countries worldwide including the UK and the US since In those countries, the survey was conducted jointly with such organisations as The Hundred Group in the UK and Business Roundtable in the US. In the US, taxes paid by survey participants represents 3.0% of the government receipts (TTC in the survey focused on FY 2007: $94 billion; the number of participants: 40 companies). In the UK, the participants contributed 13.1% in taxes to the public finances (TTC in the survey focused on FY 2009: 58.9 billion; the number of participants: 86 companies). In comparison to these countries, 15 Japan has the highest Total Tax Rate of 58.3%, for the financial year ended in March 2009, when Japanese companies were hit by the economic downturn. When comparing Japan's TTR to that of the UK for the same period, there is a gap of 16.7% between the two countries. 15 The Total Tax Contribution survey is conducted by PricewaterhouseCoopers in various countries using an internationally consistent framework. Therefore, the international comparisons discussed in this section are based on the results of previous surveys that were conducted in such countries for different financial years. 46 Total Tax Contribution 2010

53 Figure 41. International comparison of Total Tax Rate 16 80% 70% 60% 50% 40% 30% 27.6% 30.2% 31.0% 31.8% 35.1% 40.0% 41.6% 42.8% 52.1% 41.6% 58.3% 20% 10% 0% Ca nada S witzerland 2007 Ne th erland s South Africa 2008 India Austra lia UK US 2007 B elgium 2006 J apan J apan Corporation taxes Employment taxes Other taxes borne Chart shows the mean average TTR in each country split by corporate income tax, employment taxes and other taxes borne We estimated effective corporation tax rate, 17 tax rate in narrow sense, and the Total Tax Rate separately for Japan, the US, and the UK. We found that the effective corporation tax rate for Japan was higher by approx. 8% than that for the US, although the two countries have a similar level of nominal effective tax rate in the range of 40-50%. Comparing the UK and the US, the UK had a lower effective corporation tax rate than the US, but the same level of tax rate in narrow sense (incl. employers' social security contributions and related taxes) and the Total Tax Rate. Japan was approx. 8% higher than the two countries for all indicators of effective corporation tax rate, tax rate in narrow sense, and the Total Tax Rate. 16 The latest values of each country are used because the timing of the survey and the financial year covered by the survey differ depending on the country. 17 Effective corporation tax rate = Amount of corporation taxes paid/net profit before tax 2010 Total Tax Contribution 47

54 Figure 42. International comparison of effective corporation tax rate, tax rate in narrow sense, and Total Tax Rate 60% 50% 40% 41.6% 42.8% 34.7% 35.3% 35.5% 44.5% 50.4% 30% 27.8% 22.4% 20% 10% 0% UK US Japan Effective corporation tax rate Tax rate in narrow sense TTR It is commonly recognised that Japan is a jurisdiction with a low social security contribution rate. However, when focusing on employment taxes' 18 only in Figure 41 above, the level of employers' social security contributions was the second highest next only to Belgium for FY It is higher than the UK and the Netherlands (in FY 2007) when businesses reported healthy business performance. Figure 43. International comparison of employment taxes 80% 70% 60% 50% 40% 30% 20% 10% 0% 3.5% 3.5% 5.6% 0.5% 1.0% India 2008 South Africa 2008 Canada 2007 A ustra lia Netherlands % 11.1% 11.9% 12.9% US 2007 UK Japan 2008 S witzerland % 20.8% Japan 2009 B elgium Total Tax Contribution For Japan, the only employment tax borne is social security contributions borne by employers. For other countries, taxes withheld from personal income and borne by employers are also recognised as people taxes.

55 Comparison by industry We conducted an international comparison between Japan and other countries (the UK, the US, India, Belgium, and South Africa) for the manufacturing industry. In the comparison, each country's industrial structure and data comparability were taken into consideration. Due to the limited number of samples in the population, the median value was used in the international comparison by industry to eliminate any bias in the results. Japan had the second highest Total Tax Rate of 47.9% following Belgium. It was higher than the US and India by some 10% and 25% respectively. Figure 44. International comparison of Total Tax Rate for the manufacturing industry 60.0% 50.0% 40.0% 38.7% 42.5% 44.9% 54.2% 47.9% 30.0% 20.0% 23.7% 10.0% 0.0% India US South Africa UK Belgium Japan The composition of taxes borne was examined for the manufacturing industry. In order to ensure international comparability, the taxes borne were divided into profit taxes, property taxes, people taxes, production taxes, and planet taxes Total Tax Contribution 49

56 Figure 45. Composition of taxes borne by manufacturing industry (international comparison) 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% UK US India Belgium South Africa Japan Planet Product People Property Profit India had a very high profit tax rate of 76.2%, and the US had a relatively high property tax rate. The UK had a low profit tax rate but a higher people and property tax rates compared to other countries. Belgium had the highest percentage of people tax rate. Tax compliance cost The ratio of total tax compliance cost to total taxes borne was calculated for each company and a mean average was taken over all survey participants. As a result, it was found that Japan had a ratio of 0.78 %, which was relatively low compared to other countries. Figure 46. International comparison of tax compliance cost and number of staff 3.50% % % % 2.00% 1.50% 1.30% 1.60% 1.70% 2.00% % 0.50% 0.78% % Japan Switzerland UK US South Africa Australia 0 Tax compliance cost as a percentage of total taxes borne Total number of staff in central and shadow tax departments 50 Total Tax Contribution 2010

57 Closing This TTC survey covered all tax items which companies actually bear, and analysed the data collected in the same framework as in other countries. We hope this report will provide a useful perspective and actual data when considering future tax reforms and competitiveness of Japanese businesses. We thank the 95 leading companies for their participation in this first survey. We would appreciate if they would participate in the next survey. We also welcome the participation of more companies from various industries or of medium/small sizes. We will make all efforts so that this survey will gain more statistical importance and social recognition in Japan. Total Tax Contribution Team Kan Hayashi Advisor/CPA, Certified Public Tax Accountant He is fully dedicated to international tax service for Japanese multinational clients and was as a partner at PwC Japan Tax for more than 20 years. He is a member of the BIAC Japan tax committee and Japan Tax Institute. Fumiko Amano Senior Manager/ German Tax Advisor She graduated from Tokyo University in 1996 and started her first career at Ministry of Home Affairs. She obfained a master degree from London School of Economics in She joined PwC Germany 2001 and has been seconded to PwC Japan Tax since She is specialized in tax consulting for outbound investments and European VAT consulting Total Tax Contribution 51

58 PwC Total Tax Contribution publications Total Tax Contributions By country United Kingdom Australia Belgium Total Tax Contribution: PricewaterhouseCoopers LLP 2009 survey for The Hundred Group in the UK What is your company s Total Tax Contribution? Total Tax Contribution: PricewaterhouseCoopersand the Federation of Enterprises in Belgium 2009 update Published 2010 Total Tax Contribution PricewaterhouseCoopers LLP 2009 survey for The Hundred Group Published 2010 Published 2009 Total Tax Contribution? an on l i mp t a co t Toax tribu T on C t ha W PricewaterhouseCoopers and the Federation of Enterprises in Belgium 2009 update r ou is y y s s ult es yr rve su Canada India South Africa Total Tax Contribution Canada s Tax regime: complexity and competitiveness in difficult times Total Tax Contribution: How much in taxes do Indian companies really pay? Total Tax Contribution: What is the actual contribution of large companies to the fiscus in South Africa Published Survey Published 2009 Total Tax Contribution Industry Tax Total Tax Contribution 2008 How much in taxes do Indian companies really pay?* What is the actual contribution of large companies to the fiscus? May 2009 *connectedthinking Total Tax Contribution 2008 Canada s tax regime: complexity and competitiveness in difficult times* *connectedthinking United States Switzerland Total Tax Contribution How much do large U.S. companies pay in taxes?* Total Tax Contribution Published 2009 How much do large U.S. companies pay in taxes? Total Tax Contribution Total Tax Contribution Combien les grandes entreprises paient-elles d impôts en Suisse? Total Tax Contribution 52 How much income tax do large companies pay in Switzerland? 2010 Published 2009 Published 2009

59 By industry Total Tax Contribution: PricewaterhouseCoopers LLP study of the UK Financial Services Sector for the City of London Corporation Total Tax Contribution: A study of the economic contribution mining companies make to public fi nances Total Tax Contribution PricewaterhouseCoopers LLP study of the UK Financial Services Sector for the City of London Corporation Published 2009 Total Tax Contribution A study of the economic contribution mining companies make to public finances Published 2010 Paying Taxes Paying Taxes 2011: The global picture Published 2010 All publications can be found at: Total Tax Contribution 53