Delaware Corporate Tax - Guide for international expansion to the US

Are you planning to do business in Delaware? Then it’s essential to understand how corporate income tax (CIT) works and what it means for your company.

In this guide, we’ll break down everything you need to know about corporate taxes in Delaware, from setting up your business to staying compliant. Whether you’re launching a new venture or expanding your business, understanding your tax obligations is key to running a successful operation.

And if you're looking for smart ways to save money and manage international payments, we’ll also show you how a Wise Business account can help simplify cross-border transactions and keep your finances running smoothly.

💡 Learn more about Wise Business

This publication is provided for general information purposes and does not constitute legal, tax or other professional advice from Wise Payments Limited, its subsidiaries or affiliates, and it is not intended as a substitute for obtaining business advice from a tax advisor or any other professional.

Delaware Corporate tax rate in 2025

As of 2025, Delaware's corporate tax rate is 8.70%¹. This rate applies uniformly, as Delaware does not have a graduated corporate tax system with varying brackets. Instead, all taxable corporate income is subject to the same rate. In addition to Delaware's corporate tax rate, a franchise tax is levied on entities incorporated in the state, regardless of whether they conduct business within the state.²

Every domestic or foreign corporation doing business in Delaware, not specifically exempt, is required to file a corporate income tax return (Form CIT-TAX)¹. This tax is based on an equally weighted three-factor method of apportionment, with factors being property, wages, and sales in Delaware as a ratio of property, wages, and sales everywhere. Effective January 1, 2020, the apportionment calculation for Delaware is based entirely on the sales or gross receipts factor on the Delaware corporate income tax return¹.

Corporations operating inside and outside of Delaware are treated differently. Domestic corporations, incorporated in Delaware, are subject to the state's corporate income tax on earnings from business activities conducted within Delaware. Additionally, they must pay the annual franchise tax and file an annual report by March 1 each year². Foreign corporations conducting business in Delaware are required to file Form CIT-TAX to report income earned within the state².

How to pay corporate tax in Delaware

For corporations doing business in Delaware, you are required to file a Corporate Income Tax Return using Delaware Corporate Income Tax Return Form CIT-TAX³. Delaware corporate income tax returns are due in the case of a calendar year taxpayer, on or before April 15 of the following year². A federal extension automatically extends the Delaware due date, but an extension of time to file is not an extension of time to pay¹.

Delaware permits businesses that have a net operating loss in one year to carry back no more than $30,000 for each of the prior 2 years to offset any profit. The carryforward period is 20 years. The amount of the net operating loss recognized for Delaware corporate income tax purposes is only to the extent of the amount recognized for Federal purposes.¹

Delaware requires every corporation filing a Delaware corporate income tax return to attach a completed copy of a pro forma federal tax return, including all schedules and attachments.¹ The forms can be found at www.irs.gov.

Corporate income tax returns filed late are subject to a penalty of 5% per month, plus interest of 0.5% per month from the original due date until paid.¹

Corporations expecting to have a Delaware Corporate Income Tax liability of $500 or more for the current year are required to make estimated tax payments.⁴ These payments are generally due in four installments: 50% by the 1st day of the 4th month of the tax year, 20% by the 15th day of the 6th month, 20% by the 15th day of the 9th month, and 10% by the 15th day of the 12th month. Failure to pay enough estimated tax by the due dates can result in penalties and interest.⁴

Let's say your company has an annual turnover of $1.5 million and operates with a profit margin of 10%, giving it a taxable profit of $150,000. At Delaware's standard corporation tax rate of 8.7%, the tax owed would be:

$150,000 × 8.7% = $13,050

When expanding your business to the US, the right financial tools will make the process smoother. Using a platform like Wise Business makes it easy to expand internationally with local USD account details. A multi-currency account allows businesses to pay for incorporation costs, registration fees, and government taxes in local currency without paying high exchange rate fees.

Get started with Wise Business 🚀

Tax Compliance in Delaware

Here are some practical steps to help your company meet Delaware’s tax requirements:

• Register for taxes early: After incorporating, register with the IRS for federal taxes and the Delaware Division of Revenue for state taxes. Depending on your business type, you may be liable for Corporate Income Tax, Franchise Tax, Gross Receipts Tax, and Withholding Tax. Using professional corporate tax services can help ensure all obligations are met.
• Appoint a Registered Agent: As required by law, your Registered Agent must have a physical address in Delaware and handle legal notices and compliance matters on your behalf.

International Expansion to Delaware

Delaware is a powerful combination of economic potential, strategic location, and elite legal infrastructure that attracts businesses worldwide.

The state’s median household income of $81,361 exceeds the U.S. national average of $77,719, reflecting strong consumer purchasing power. More residents hold bachelor’s degrees (36.5 % vs. 36.2 %), reflecting a skilled labour pool^{5 6}.

Although employment runs slightly below the national average (59.6 % vs. 60.6 %), that gap creates opportunities for companies hoping to retain top-quality talent. Located along the I-95 corridor in the Mid-Atlantic, Delaware places businesses within an overnight radius of over 100 million people. Such proximity reduces supply-chain friction and speeds market access^7.

Often dubbed the “Corporate Capital of the World,” Delaware hosts more than two million business entities. Nearly 67.6% of Fortune 500 companies and approximately 80% of U.S. IPOs in 2023 were incorporated there.⁸ That volume stems from Delaware’s robust legal system. The Delaware General Corporation Law is one of the most advanced corporate statutes. The Delaware Court of Chancery handles corporate disputes without juries and benefits from immense judicial experience. All these are factors that many of your clients’ peers value highly.

Delaware’s well-established network of corporate tax advisors, experienced tax managers, and transparent regulatory framework helps businesses confidently navigate corporate tax compliance. The state’s predictable legal environment and accessible guidance make it easier for companies to manage corporate income tax obligations and maintain accurate tax accounting practices.

The steps required to set up a business in Delaware are¹³:

1. Conduct market research to understand your audience and competition.
2. Map out your supply chain, staffing needs, and cost structure.
3. Select the business structure that shapes your liability, taxation, and reporting.
4. Choose a compliant business name.
5. Obtain an Employer Identification Number (EIN) if you’ll hire.
6. Register the business with the Delaware Department of State.
7. Complete tax registration via OneStop with the Delaware Division of Revenue.

Need help with the LLC formation process itself? Check Wise’s How to Start an LLC in Delaware guide for practical steps, cost estimates, and tips for non-residents to launch smoothly.

Incorporation of Business in Delaware

Setting up a company in Delaware is relatively simple, provided you follow the required steps. Here’s what you’ll need:⁹

• Choose your business entity type: This determines ownership, liability, and how Delaware corporate tax applies to your company. Entity types are outlined below.
• Appoint a Registered Agent: Required by Delaware law. Your Registered Agent must have a physical address in the state and can be an individual resident or a business authorized to operate there.
• Reserve your business name: This is optional, but the Delaware Division of Corporations can hold your chosen name for 120 days to ensure it remains available.
• File the Certificate of Incorporation or Certificate of Formation: Include your registered office, authorized and issued share capital, and details of directors, shareholders, or members.

Note: Businesses formed after January 1, 2024, must comply with Beneficial Ownership reporting under the Corporate Transparency Act (CTA), which requires reporting beneficial owner information to the Financial Crimes Enforcement Network (FinCEN). In addition, many banks and financial institutions require certified copies or a Certificate of Good Standing before opening accounts or granting credit.

Types of business entities in Delaware:¹⁰

• C-Corporation: Owned by shareholders and managed by a board of directors. Liability is limited to contributions. Profits are taxed at the Delaware corporate tax rate, and dividends are taxed again at the shareholder’s personal rate.
• S-Corporation: This type of corporation is similar to a C-Corporation in structure, but profits are passed directly to shareholders and taxed at personal rates, avoiding double taxation.
• Limited Liability Company (LLC): Formed by one or more members. Management can be member- or manager-controlled, liability is limited to contributions, and profits are reported on members’ returns.

Delaware’s business-friendly legal system, reliable corporate tax rules, and access to resources like the corporate tax helpline make it a prime location for incorporation. Companies can also consider corporate tax outsourcing to simplify compliance, implement strategies on how to reduce corporate tax, and ensure timely filings to avoid late corporate tax filing penalties.

For multinational businesses, Delaware’s framework also aligns with evolving global minimum tax rates under the corporate tax 2025 regulations.

International corporate tax best practices

Here are some of the best strategies to ensure compliance with local tax laws, save more money, and reduce tax burdens.

• Stay compliant with local and international tax laws. Complete the legal registration process in every country where your business operates. File all required tax returns on time to avoid penalties, and ensure you stay up to date with local tax laws to remain fully compliant. In the same vein, companies should understand and adhere to global standards set by organisations like the Organisation for Economic Co-operation and Development (OECD). With frameworks like Base Erosion and Profit Shifting (BEPS) and Pillar Two Global Minimum Tax, companies can ensure they are transparent, prevent tax avoidance, and avoid legal risks.
• Leverage double taxation treaties (DTTs). DTTs are essential in making sure that you’re not taxed on the same income twice. Therefore, CFOs and Directors need to have a clear understanding of these treaties between the countries in which your business operates and how they can potentially relieve your tax burden.
• Maintain up-to-date and transparent financial records. Maintaining clear and up-to-date financial records helps companies prepare accurate tax returns, reducing the risk of errors that could lead to penalties. Additionally, having organised financial records simplifies the process during financial audits.

Take the complexity out of international expansion with Wise Business

Researching corporate tax is a crucial step when expanding your business into a new country. The next step is setting up the financial infrastructure to handle the complexities of operating across borders, from managing multi-currency cash flow to mitigating FX risk.

The Wise Business account provides the financial tools to make your international expansion to Delaware efficient and simple. It's the one account for managing your money globally.

With a Wise Business account, you can:

• Pay suppliers and initial fees: Pay suppliers, global payroll, and one-off incorporation costs in the local currency.

• Get paid like a local: Use local account details for 8+ major currencies to easily receive payments from customers or investors.

• Manage your money across borders: Hold and exchange 40+ currencies in one account, always with the mid-market exchange rate and low, transparent fees.

• Streamline your accounting: Integrate with tools like Xero or QuickBooks to simplify tracking your company's international finances.

• Empower your team: Provide multi-user access for your finance team and issue expense cards for international spending.

Wise is designed to support every step of your journey, from paying your first registration fee to receiving international payments and managing your global treasury.

Get started with Wise Business 🚀

FAQs - Corporate tax in Delaware

Who is liable for corporate tax in Delaware?

A corporation is liable for Delaware’s 8.7% corporate income tax if it conducts business in the state, a condition known as having "nexus". This includes activities like having an office, employees, or deriving income from sources within Delaware. Companies incorporated in Delaware but operating elsewhere are not subject to income tax but must still pay the annual Franchise Tax.

Are there any tax incentives for businesses in Delaware?

Yes, Delaware offers various tax credits to encourage business growth and investment. These include credits for creating new jobs, investing in research and development (R&D), and locating a business in specific revitalisation zones. These incentives can significantly lower a company's effective tax rate¹¹.

What is the tax treatment of dividends in Delaware?

Delaware generally follows federal guidelines regarding dividends. A significant portion of dividends received from other corporations may be deductible. Furthermore, Delaware law provides a 100% exclusion from taxable income for dividends received from certain foreign corporations, which is particularly beneficial for multinational businesses.¹²

What is the process for registering for corporate tax in Delaware?

First, you must incorporate your company with the Delaware Division of Corporations. Once incorporated, you must register your business with the Delaware Division of Revenue. This can be done efficiently through the Delaware One Stop Business Registration and Licensing System, which allows you to register with multiple state agencies simultaneously.

What are the common pitfalls to avoid regarding corporate tax in Delaware?

A major pitfall is confusing the annual Franchise Tax with the corporate income tax. All Delaware corporations must pay the Franchise Tax, regardless of business activity. Another common mistake is failing to file an income tax return (even a "zero income" return) if you're incorporated in Delaware but do no business there. Finally, neglecting to make quarterly estimated tax payments when required can lead to penalties.

Sources used in this article:

1. Delaware Corporate Income Tax FAQs
2. Delaware Corporate Tax (SmartAsset)
3. Filing Delaware Corporate Income Tax
4. Expert Guide to Delaware Corporate Income Tax (CPA Delaware)
5. Delaware Demographic Profile (U.S. Census Bureau)
6. United States Demographic Profile (U.S. Census Bureau)
7. Regional Data Analysis Tool (StatsAmerica)
8. Why Businesses Choose Delaware (Division of Corporations)
9. How to Form a Corporation in Delaware
10. Business Structure and Tax Obligations Table
11. Delaware Opportunity Zones
12. Title 30 of the Delaware Code (State Taxes)
13. Steps to incorporate a business in Delaware

Sources last checked 22/08/2025