Ok, this all boils down to what you define as horror in the real sense. And honestly, it really depends on they type of person you are.
Let's assume the best horror means something that really draws you in and really scares your pants off or full. Addressing the "draws you in" side of it, then it really comes down to what is linguistically and culturally familiar. And for that, often what is best is something that linguistically you understand, and by your cultural and social upbringing, you are terrified about. For an example, using the old "East Meets West" logic... in the West, especially for Europeans and Americans... they see the world and themselves in it as a very mortal thing, and that mortality as a very final thing (regardless of belief in the afterlife.) Therefore, threats to their mortality, or the mortality of those close to them, mortifies them. Admittedly, this is something that while not at the top of the hierarchy of fears everywhere, is still something that would frighten 75% of the world at least.
Now, with a country like Japan... they tend to be surprisingly social, especially in regards to how they live in a society outside of just their own experience... this being said, something that exposes the deepest, darkest secrets about themselves, not just finding the skeletons in their closets and exploiting them, but thrusting them out into the rest of the world where they can see it and that it is connected to them, this is terrifying, often moreso than death. Feel free to research Japanese ghosts, demons, and abominations of legend if you'd like. Some are based on the dangers of Nature, but the lion's share are based on something that would teach other people something about you you don't want them to know, like that you never clean your bathroom, or you abandoned your child, or you starved your children, or you regularly cheat on your wife with any willing woman. Granted, this thrusting of skeletons into the open is something that Americans can also relate to (for some... the bathroom thing... mostly not.) However, they aren't as terrified.
Coming with that is a flip-side though. Many claim that Japan is the best at subtle horror, while a lot of American horror actually gets classified in Japan as "suspense", because of the whole "not being as terrified of death as the other thing" thing. Now, while there are people in both countries who find the other country's horror sublime, or boring, or shocking, but not "really scary," there are others who not only have a similar reaction to their own country's horror, but are either enthralled by , or aghast at the foreign horror. The reason they prefer foreign horror is the same reason domestic horror gives their experience tedium... the stuff from home is too familiar.
Consider that you've got a story about a werewolf. Yes, this is something bound deeply into the Western subconscious as a threatening and scary thing. However, it is familiar. And for those who know their fair share about werewolves (not to say the least about someone who can watch a werewolf movie and tell you exactly what stories and legends the werewolf in the movie originates from), these movies are not scary. They know the threat, but they also know how to beat it. Problem solved, not scary. or, if there's even a subtle change, it suddenly becomes not scary more because people think "This is incorrect." If you don't believe me, try asking anyone on the internet what zombies are "real" zombies.
Now lets consider the viewpoint of another culture. If it is the right monster, people are terrified, because they know its scary. But at the same time, they don't know about it. Vampires and Werewolves are recently very popular in Japan for that reason. Its new, people who watch movies about them think they're scary because they can see the people in the movies are scared of them. They are similarly scared because they also don't always understand them, and don't know how to deal with them. This is why people were scared in America by The Ring and The Grudge. This is also why some more obscure horror are making a resurgence in the West (Consider how many people knew what the Wendigo (or Witiko, Windigo, whathaveyou) was before that movie 10 years ago.)
Now, consider if a horror was made in Japan about something very obscure that nobody in the West would know about... say, an Akaname (in all honesty, for people in Japan who know about this, it wouldn't be that scary.) In America, almost nobody knows about it. They would see this giant, bright red thing with hooks for hands and a long tongue it almost never keeps in its mouth as it runs around naked suddenly appearing in a bathroom while someone is trying to take a bath or shower, and the only two thoughts they would think would be "OH GOD! When is it going to kill me?!" and "How do you kill it? How do you make it happy? How do you make it go away? Why won't it stop?!?!" If a similar horror was made in America about a similarly obscure beast that actual does target a social pariah, or hunt based on a social anathema or taboo (such as the Succubus), people in Japan would have a similar experience, of knowing its scary, but being even more terrified because they are constantly asking "Why is it doing this?" or "What did they do to deserve this?" or "How do you appease it?" Silence of the Lambs was popular in Japan not because of the thrill of trying to stop or reason with the criminals in it, but because the main one, Lector himself, specifically targeted those who personally wronged him, and his biting psychological analysis of people tore open wounds they wished to remain closed.
Every country that makes horror has their domestic masterpieces, and many have works considered award-winning abroad, and often these two categories are completely separate. As far as which country makes the universally best horror, that's hard to say. Many are very close.