Estonia has the most competitive tax system in the world due largely to its 20 percent corporate tax and “well-structured” personal income tax system, according to Washington-based fiscal think tank the Tax Foundation. The Tax Foundation’s third annual International Tax Competitiveness Index measures how well a country’s tax system promotes sustainable economic growth and investment. The report looks at over 40 tax policy variables in five categories, including corporate income taxes, individual taxes, consumption taxes, property taxes, and the treatment of foreign earnings.

According to the Foundation, Estonia’s position at the top of the 2016 index is predominately the result of four factors, including: “its low percent corporate tax; a well-structured, 20 percent tax on individual income; a property tax applied only to the value of land rather than the value of real property or capital; and a well-designed territorial tax system.”

New Zealand and Latvia take the next two places in the index. By contrast, France sits at the foot of the league table because of its high 33.33 percent corporate tax rate, “high and poorly structured” property taxes, and “high, progressive individual tax rates.” The United States rose one place to 31st in this year’s index, but is fifth-from-bottom overall due to its high rate of corporate tax, worldwide tax system, and relatively high and poorly structured taxes on personal income, dividends, and capital gains, the Tax Foundation said. Greece, Portugal and Italy round out the bottom five places in the index.