Now in its sixth edition, the report compared tax systems across 183 countries from a business perspective, revealing that all six GCC states fall within the top 15 countries within the ranking.

Saudi Arabia was ranked 7th in 2012.

Rankings of Gulf states: Qatar — Second, UAE — Sixth, Oman — Eighth, Kuwait — 12th and Bahrain — 13th

On average, there are almost half as many taxes levied in the Middle East, compared to the global average.

Moreover, the time to complete tax obligations is significantly lower than the rest of the world.

The findings further support the region's growth prospects and its position on the global stage.

“The UAE has again been ranked in the top 10 for the ease of paying taxes,” said Dean Rolfe Tax Partner at PwC.

“The Middle East has traditionally been, and continues to be, relatively straight forward when it comes to paying taxes due to the limited number of taxes that are currently levied. A key finding in this year's report highlights that when governments continue to reform their tax systems they improve their overall rankings to become more internationally competitive. Such reforms might include the ability to file and pay taxes electronically.”

The Paying Taxes data is produced as part of the World Bank and IFC's Doing Business study.

Data on business taxes is taken from a questionnaire sent by the World Bank to PwC offices and other third-party contributors around the world.

The methodology used to analyze this data and assess the total tax rate in each country is based largely on PwC's total tax contribution framework.

This year, the country rankings in the Paying Taxes report differ from those used by the World Bank in their Doing Business report. The Doing Business report has applied a threshold to the ranking for the total tax rate to seek to mitigate the effect of low total tax rates on the rankings.

Some of the Middle East Paying Taxes Report 2012 include:

* Tax reforms continue around the world, making paying taxes easier.

— In the past seven years more than 60 percent of the economies made paying taxes easier with 244 reforms.

— Between June 2010 and May 2011, 33 economies made it easier to pay taxes

— Since the 2006 Paying Taxes study, the tax cost has fallen on average by 8.5 percent, the time needed to comply dropped by over a week (54 hours), and the number of payments declined by almost five.

* Practices which have helped improve the results include:

— Effective electronic filing and payment systems (used in 66 economies)

— Having one tax per base rather than multiple taxes (49 economies have one tax per base)

— Using a filing system based on self-assessment (79 percent of economies do this)

— Reductions in the rate of corporate income tax (133 significant reductions)

* Around the world, the case study company faces a total tax rate (percentage of profit paid out in taxes) of 44.8 percent on average. The company spends 277 hours a year, and makes 28.5 tax payments, to comply with tax laws.

* On average around the world, the case study company pays more than 9 different taxes.

On average, corporate income tax accounts for only 36 percent of the total tax rate, 25 percent of the time to comply and 12 percent of tax payments.

* 173 economies levy a corporate income tax, 171 collect some form of social security contribution and 151 have a VAT

* The time to comply with tax requirements for the model company varies between regions.

It takes the least time to comply in the OECD (195 hours) and the European Union (209 hours).

The longest time needed is in the G20 (358 hours), and Latin America and the Caribbean (382 hours).

* The number of payments also varies widely by region. The company makes the most payments in Central Europe and Eastern Europe, 37.9 a year on average. It makes the fewest in OECD economies, just 13.1 on average.

* In high income economies the case study company makes 15.2 payments, takes 168.7 hours to comply with its main taxes and has an average total tax rate of 37.4 percent. This compares to 38.3 payments, 271 hours and 67.8 percent for low income economies

* It takes the case study company longest to comply with consumption taxes, especially VAT. VAT is the predominant form of consumption tax used around the world. For these economies, it takes 66 percent as much time again to comply with VAT as it does to comply with corporate income tax.

* 79 percent of survey respondents identified the way tax audits and disputes are dealt with and the 66 percent identified the approach of the tax authorities as the aspects of the tax system most in need of improvement.