Taxation in the SCO and BRICS countries

The Shanghai Cooperation Organization (SCO) and the BRICS Groups bring together major emerging economies whose tax systems play an important role in attracting investment, sustaining business and promoting economic growth. The member countries of these associations have their own peculiarities in taxation, based on economic realities, national priorities and international obligations.

General features of the SCO and BRICS tax systems

The SCO and BRICS include countries with different levels of economic development, which determines the diversity of their tax systems. However, there are several common features:

1. Attracting foreign investment

Many countries seek to create favorable tax conditions to attract international investors.

2. Progressive taxation

Income tax in most countries has a progressive scale, which promotes social justice.

3. Tax incentives and incentives

An important part of the policy is the provision of benefits for strategically important industries such as IT, manufacturing, agriculture and alternative energy.

4. Double taxation

The SCO and BRICS members are actively signing double taxation agreements (DTAs) to facilitate international trade and investment.

Taxation in BRICS countries (excluding Russia and China)

India

1. Income Tax (Income Tax)

For individuals: Progressive scale from 5% to 30%.

For companies: the basic corporate tax rate is 22%, but for new manufacturing companies the 15% rate applies.

2. Goods and Services Tax (GST)

Introduced in 2017, the GST replaced many other taxes. Rates range from 0% to 28% depending on the category of goods or services.

3. Features of taxation of foreign investors

India has signed more than 90 double taxation treaties. This makes the country attractive for investment despite complex tax procedures.

South Africa

1. Income tax

For individuals: Progressive scale from 18% to 45%.

For companies, the corporate tax rate is 27%.

2. Value Added Tax (VAT)

The VAT rate is 15%.

3. International cooperation

South Africa is actively using double taxation agreements to raise capital.

Brazil

1. Corporate tax

The corporate tax rate is 34%, including federal income tax (15%) and additional tax (10%).

2. Individual income tax

Rates range from 7.5% to 27.5%.

3. VAT and other indirect taxes

The complex system of indirect taxation includes several taxes at different levels of government (federal, state, municipal).

4. Taxation agreements

Despite a complex tax system, Brazil has signed up to a number of DTTs to support exports and investment.

South African Republic

1. Corporate taxation

The income tax rate is 28%.

2. Progressive income tax

The personal income tax scale starts at 18% and reaches 45%.

3. Features of tax policy

South Africa provides incentives for the extractive and renewable energy sectors.

Taxation in SCO countries (without Russia and China)

Kazakhstan

1. Corporate tax

The rate is 20%.

2. Individual income tax

A flat rate of 10%.

3. VAT

The basic VAT rate in Kazakhstan is 12%, which is lower than in most countries of the region.

4. Tax benefits

Kazakhstan provides tax incentives for the IT sector, agriculture and startups.

Uzbekistan

1. Corporate tax

The basic rate is 15%.

2. Income tax

The tax rate for individuals varies from 12% to 22%.

3. Indirect taxation

VAT is 15%.

4. Features

Uzbekistan is actively reforming its tax system to increase transparency.

Double Taxation Agreements within the SCO and BRICS

1. The importance of SIDN

Double Taxation Avoidance Agreements (DTAs) are aimed at preventing the situation in which the income of individuals or legal entities is taxed simultaneously in two countries.

Key advantages:

• Reducing the tax burden on cross-border investors.
• Removing barriers to international trade.
• Creating a transparent and stable tax environment.

2. Bilateral and multilateral agreements

The SCO and BRICS countries are actively concluding bilateral agreements to facilitate doing business. An example is an agreement between India and South Africa that avoids double taxation on dividends, interest and royalties.

3. Multilateral initiatives

In 2019, the BRICS countries signed a declaration on cooperation in the tax sphere, which provides for:

• Exchange of tax information.
• Combating tax evasion.
• Elimination of conflicts related to double taxation.

The tax systems of the SCO and BRICS countries are diverse and unique, reflecting the economic and social specifics of each country. At the same time, the common desire for cooperation in the tax sphere, expressed in the conclusion of the SIDS, plays a key role in facilitating international trade and improving the business climate. For entrepreneurs and investors, understanding the tax policies of these countries opens up new opportunities for effective business.