OECD: Nominal corporate income tax rates continue to fall

The OECD has announced that on average, global nominal corporate income tax rates have continued the downwards trend, down 8 points on average from the year 2000 (28.3%) to year 2021 (20%). Across 111 jurisdictions, 94 had lower corporate income tax rates in 2021 compared with 2000, while 13 jurisdictions had the same tax rate, and only 4 had higher tax rates. In addition, data confirms that corporate income tax continues to be an important source of government revenue for developing countries and emerging economies: the corporate income tax share of government revenue in Africa stands as 19.2%, in Latin America and the Caribbean at 15.6%, compared to the OECD countries average of 10%.

A detailed overview is available in OECD’s Corporate Tax Statistics database and the latest report on the matter, which also highlights the persistent practice of profit shifting relative to the importance of the recently reached G20 agreement on global taxation.

Understanding the database

The data on statutory corporate tax rates for OECD jurisdictions are sourced from the OECD Tax Database. An explanatory annex for OECD jurisdictions and an explanatory annex for non-OECD jurisdictions contain further information on statutory corporate income taxes for certain jurisdictions.

The methodology for calculating the ETRs is described in detail in the OECD Taxation Working Paper, Corporate Effective Tax Rates: Model Description and Results from 36 OECD and Non-OECD Countries, building on the theoretical model developed by Devereux and Griffith (1999, 2003). Further methodological information is available in the corporate effective tax rates explanatory annex.

The data on coporate tax revenues are sourced from the Global Revenue Statistics DatabaseRead the technical paper on the construction of the Global Revenues Statistics Database: its coverage, sources, strengths and limitations. The database follows the definition of tax in the OECD classification of taxes and Interpretative Guide.

BEPS Action 13 is part of the transparency pillar of the OECD/G20 BEPS project, supporting jurisdictions in combating BEPS. The database contains information on the domestic legal frameworks for Country-by-Country reporting around the world.

Anonymised and aggregated CbCR statistics represent an important new source of data on the global tax and economic activities of multinational enterprises. The statistics are subject to a number of important data limitations, detailed in the disclaimer.

The database contain two sets of indicators that offer a complementary view of the extent of R&D tax support provided through expenditure-based R&D tax incentives. The first set focuses on synthetic tax policy indicators that capture the effect of expenditure-based R&D tax incentives on firms’ investment costs. It contains two new indicators of the effective average tax rate for R&D and the cost of capital for R&D. These indicators are produced by the Centre for Tax Policy and Administration and the OECD Directorate for Science, Technology and Innovation. The methodology is outlined in an accompanying OECD Taxation Working Paper, Corporate Effective Tax Rates for R&D. Further modelling notes are available in an explanatory annex. It complements estimates of implied tax subsidy rates based on the B-Index indicator sourced from the OECD R&D tax incentives database produced by the OECD Directorate for Science, Technology and Innovation. The second set of indicators, sourced from the OECD R&D tax incentives database, display the cost of expenditure-based tax incentives to the government together with estimates of direct government support to business R&D.

The data on IP regimes are compiled from information collected by the Forum on Harmful Tax Practices for its peer reviews of preferential regimes.

Data on CFC rules are available for 49 jurisdictions for the year 2019.

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