Manchester ranked as Europe’s top tax location
MANCHESTER’S inward investment credentials have been given a significant boost after it was ranked Europe’s most attractive location for business from a tax perspective.
An international study of tax costs in 113 cities in 14 countries around the world by KPMG International put the city in ninth place overall and ahead of London, which was in 15th.
The top three locations with the lowest ‘Total Tax Index’ were: Chennai in India, Vancouver and Chengdu in China
KPMG’s ‘Competitive Alternatives 2012, Special Report: Focus on Tax’ assessed the impact of all business taxes, building on data compiled for 10 countries in 2010.
St Petersberg (10th), Moscow (12th), Amsterdam (13th) and Rotterdam (14th) were the only other European cities to make the top 40.
Christine Hewson, head of tax for KPMG in the North West, said, “The fact that Manchester ranks so far ahead of those key European and global competitors surveyed is a fantastic demonstration of the city region’s inward investment credentials.
“The tax incentives available to businesses in the city, and across the UK in general, are indeed very attractive and this study comes as further proof – if proof were needed – that Manchester has firmly cemented itself as one of the world’s best business locations.”
Taxes analysed include corporate income taxes, capital taxes, sales taxes, property taxes and statutory labour costs to calculate a “total tax cost” which is compared between countries and cities using a Total Tax Index (TTI) for each location.
The TTI is a measure of the total taxes paid by corporations in a particular location, expressed as a percentage of total taxes paid by corporations in the US.
Thus, the US has a TTI of 100 which represents the benchmark against which the other countries and cities are scored. The lower the TTI, the more attractive the country from a business tax perspective. Manchester was given a TTI of 66.7, 3 points lower than London.
Christine Hewson said: “It is particularly interesting to note that Manchester ranks six places above the capital for attractiveness.
“The difference between the two is largely due to Manchester having lower rates for “other corporate taxes” and “statutory labour costs” which are both based on actual business costs that are incurred by businesses in the city – so essentially, a reflection of the relative costs of labour and property values between Manchester and London.”
