The 3 Countries With The Most Complex Tax Systems In the World 1

It can be quite taxing doing business in certain countries. The Netherlands-headquartered TMF Group recently released its Financial Complexity Index for 2017 with the object of studying the complexity of accounting and tax systems. We’ve looked at the methodology and summary findings of the report in the previous article of this series.

The table below shows the top ten most complex jurisdictions when it comes to accounting and tax compliance. TMF Group had shortlisted 94 countries for the study, 50 of which were from the Europe, Middle East, & Africa (EMEA) region, 24 were from the Americas, and 20 were from Asia-Pacific (APAC).

Let’s look closely at the top three most complex jurisdictions in the world.

- Advertisement -


The report observed that Turkey is “a highly tax-driven country which requires a considerable level of local understanding and knowledge in order to maintain compliance.”

Some of the factors which make accounting and tax compliance exceptionally difficult in the country are that accounting still must be mandatorily carried out in hardcopy. If electronic ledgers are being used, the accounting software being used therein has to be approved by the government.

All foreign currency transactions have to be reported in the Turkish lira and the description of journals has to be in Turkish.

Further, the tax code in the country undergoes changes quite frequently, and the changes are not easily traceable.


Brazil has the most complex tax and accounting system in the Americas and the second most complex among the 94 jurisdiction chosen for the 2017 Financial Complexity Index report.

The TMF Group noted that the primary reason behind this is the 1988 Constitution which allows all three levels of government – federal, state, and municipal – to collect taxes. This has led to multiple tax rates and regulations, thus resulting in a multifaceted tax system which has over 90 taxes in its ambit.


Another country from EMEA, Italy, ranks third in the world in terms of the complexity of its accounting and tax system.

The report noted that though the country has made efforts to reduce taxation and align its accounting practices with international standards, “some very specific requirements” make its system one of the most complex in the world.

These requirements include maintaining accounts in Italian, mandating bookkeeping of all kinds to be in euros, and mandatory electronic invoicing in some cases. A multi-level tax system also makes the practice a monumental task.

After this brief overview, let’s look at the three most desirable jurisdictions of each region in detail, starting with EMEA.

- Advertisement -