Corporate Tax Statistics - FIRST EDITION - OECD
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Corporate
Tax Statistics
FIRST EDITION
Corporate Tax Statistics
This document and any map included herein are without prejudice
to the status of or sovereignty over any territory, to the delimitation of CONTENTS
international frontiers and boundaries and to the name of any territory,
city or area.
Introduction 1
The statistical data for Israel are supplied by and under the responsibility
of the relevant Israeli authorities. The use of such data by the OECD is
without prejudice to the status of the Golan Heights, East Jerusalem and Corporate tax revenues 2
Israeli settlements in the West Bank under the terms of international law.
Note by Turkey: The information in this document with reference to “Cyprus” Statutory corporate income tax rates 8
relates to the southern part of the Island. There is no single authority
representing both Turkish and Greek Cypriot people on the Island. Turkey
recognises the Turkish Republic of Northern Cyprus (TRNC). Until a lasting Corporate effective tax rates 16
and equitable solution is found within the context of the United Nations,
Turkey shall preserve its position concerning the “Cyprus issue”.
Tax incentives for research and development 26
Note by all the European Union Member States of the OECD and the
European Union: The Republic of Cyprus is recognised by all members
of the United Nations with the exception of Turkey. The information Intellectual property regimes 33
in this document relates to the area under the effective control of the
Government of the Republic of Cyprus.
References 37
NAMES OF COUNTRIES AND JURISDICTIONS
ALB Albania CUW Curaçao KAZ Kazakhstan PRT Portugal SWE Sweden
AND Andorra CYP Cyprus KEN Kenya ROU Romania CHE Switzerland
AGO Angola CZE Czech Republic KOR Korea RUS Russia THA Thailand
AIA Anguilla DNK Denmark LVA Latvia RWA Rwanda TGO Togo
ARG Argentina DOM Dominican Republic LBR Liberia VCT Saint Vincent and TKL Tokelau
AUS Australia COD DRC LIE Liechtenstein the Grenadines TTO Trinidad and Tobago
AUT Austria EGY Egypt LTU Lithuania WSM Samoa TUN Tunisia
BHS Bahamas SLV El Salvador LUX Luxembourg SAU Saudi Arabia TUR Turkey
BHR Bahrain EST Estonia MAC Macau, China SEN Senegal TCA Turks and Caicos
BRB Barbados SWZ Eswatini MYS Malaysia SRB Serbia Islands
BEL Belgium FJI Fiji MDV Maldives SYC Seychelles UGA Uganda
BLZ Belize FIN Finland MLI Mali SGP Singapore ARE United Arab Emirates
BMU Bermuda FRA France MLT Malta SVK Slovak Republic GBR United Kingdom
BOL Bolivia GAB Gabon MUS Mauritius SVN Slovenia USA United States
BWA Botswana DEU Germany MEX Mexico SLB Solomon Islands URY Uruguay
BRA Brazil GHA Ghana MCO Monaco ZAF South Africa VNM Viet Nam
VGB British Virgin Islands GRC Greece MSR Montserrat ESP Spain
BRN Brunei Darussalam GTM Guatemala MAR Morocco
BGR Bulgaria GGY Guernsey NLD Netherlands
BFA Burkina Faso GUY Guyana NZL New Zealand
CPV Cabo Verde HND Honduras NER Niger
CMR Cameroon HKG Hong Kong, China NGA Nigeria
CAN Canada HUN Hungary NOR Norway
CYM Cayman Islands ISL Iceland OMN Oman
CHL Chile IND India PAN Panama
CHN China IDN Indonesia PNG Papua New Guinea
COL Colombia IRL Ireland PRY Paraguay
COG Congo IMN Isle of Man PER Peru
COK Cook Islands ISR Israel PHL Philippines
CRI Costa Rica ITA Italy POL Poland
CIV Côte d’Ivoire JAM Jamaica
HRV Croatia JPN Japan
CUB Cuba JEY Jersey
INTRODUCTION . 1
Introduction
The Corporate Tax Statistics database is intended to assist in the study of corporate tax policy and
expand the quality and range of data available for the analysis of base erosion and profit shifting (BEPS).
In developing this first edition of the database, the analysis of corporate taxation, in general, and of BEPS, in
OECD has worked closely with members of the particular.
Inclusive Framework on BEPS (Inclusive Framework)
and other jurisdictions willing to participate in the The database compiles new data items and statistics
collection and compilation of statistics relevant to currently collected and stored by the OECD in various
corporate taxation. The 2015 Measuring and Monitoring existing data sets. The first edition of the database
BEPS, Action 11 report highlighted that the lack of contains four main categories of data:
quality data on corporate taxation is a major limitation
to the measurement and monitoring of the scale of l corporate tax revenues;
BEPS and the impact of the OECD/G20 BEPS project. l statutory corporate income tax rates;
While this database is of interest to policy makers from l corporate effective tax rates;
the perspective of BEPS, its scope is much broader. l tax incentives related to innovation.
Apart from BEPS, corporate tax systems are important
more generally in terms of the revenue that they raise Future editions will also include an important new
and the incentives for investment and innovation that data source: aggregated and anonymised statistics of
they create. The Corporate Tax Statistics database brings data collected under the BEPS Action 13 Country-by-
together a range of valuable information to support the Country Reports.
Box 1. CORPORATE TAX STATISTICS
l Corporate tax revenues:
– data are from the OECD’s Global Revenue Statistics
Database
– covers 88 jurisdictions from 1965-2016 (for OECD
members) and 1990-2016 (for non-OECD members)
l Statutory corporate income tax rates:
– covers 94 jurisdictions from 2000-18
l Corporate effective tax rates:
– covers 74 jurisdictions for 2017
l Tax incentives for research and development (R&D):
– data are from the OECD’s R&D Tax Incentive Database
– covers 47 jurisdictions for 2000-16 (for tax and direct
government support as a percentage of R&D)
– covers 44 jurisdictions for 2000-18 (for implied subsidy
rates for R&D, based on the B-index)
l Intellectual property (IP) regimes:
– data collected by the OECD’s Forum on Harmful Tax
Practices
– covers 65 regimes in 41 jurisdictions for 2018
2 . OECD | CORPORATE TAX STATISTICS
Corporate tax revenues
Data on corporate tax revenues can be used to compare the size of corporate tax revenues across
jurisdictions and to track trends over time. The data in the Corporate Tax Statistics database allow
the comparison of individual jurisdictions as well as average corporate tax revenues across OECD
jurisdictions, 25 Latin American & Caribbean (LAC) jurisdictions, and 21 African jurisdictions1.
Box 2. CORPORATE TAX REVENUES KEY INSIGHTS:
The Corporate Tax Statistics database contains four l In 2016, the share of corporate tax revenues in total tax
corporate tax revenues indicators: revenues was 13.3% on average across the 88 jurisdictions
l the level of corporate tax revenues in national currency; in the database, and corporate tax revenues as a
percentage of GDP was 3.0% on average.
l the level of corporate tax revenues in USD;
l corporate tax revenues as a percentage of total tax l The size of corporate tax revenues relative to total tax
revenues; revenues and relative to GDP varies by groupings of
jurisdictions. In 2016, corporate tax revenues were a larger
l corporate tax revenues as a percentage of gross share of total tax revenues on average in Africa (15.3% in
domestic product (GDP). the 21 jurisdictions) and LAC (15.4% in the 25 jurisdictions)
The data are from the OECD’s Global Revenue Statistics than the OECD (9%). The average of corporate tax revenues
Database, which presents detailed, internationally as a share of GDP was the largest in LAC (3.4% in the 25
comparable data on tax revenues. The classification of jurisdictions), followed by the OECD (2.9%) and Africa
taxes and methodology is described in detail in the OECD’s (2.8% in the 21 jurisdictions).
Revenue Statistics Interpretative Guide.
l In five jurisdictions – Egypt, Kazakhstan, Malaysia, Papua
New Guinea and the Philippines – corporate tax revenues
Corporate tax revenues
made up more than one-quarter of total tax revenues in
2016.
88
countries l Corporate tax revenues are driven by the economic cycle.
and growing...
For the period 2000-16, average corporate tax revenues as
a percentage of GDP reached their peak in 2007 (3.6%) and
CIT revenues as a share of total tax revenues declined in 2009 and 2010 (3.2% and 3.1% respectively),
reflecting the impact of the global financial and economic
crisis.
12.0% 13.3% l For jurisdictions where the exploitation of natural resources
2000 2016 is a significant part of the economy, changes in commodity
prices can have a significant effect on corporate tax
CIT revenues as a percentage of GDP revenues. From 2015 to 2016, the share of corporate tax in
total tax decreased by more than five percentage points in
two jurisdictions, the Democratic Republic of Congo (from
2.7% 3.0% 20.6% to 14.5%) and Trinidad and Tobago (from 44.0% to
23.4%). In both of these jurisdictions, the drop was driven
2000 2016 by a decline in commodity prices.
1. The Global Revenue Statistics Database covers 92 jurisdictions in 2018. Data on corporate tax revenues is available for 88 of these jurisdictions. In addition to the OECD, Latin
America & Caribbean jurisdictions, and African jurisdictions, the Global Revenue Statistics Database also contains data on Asian and Pacific jurisdictions, but the number of
jurisdictions is not sufficiently large for the calculation of meaningful averages for the Asia and Pacific Region.
CORPORATE TAX REVENUES . 3
FIGURE 1: Average corporate tax revenues as a percentage of total tax and as a percentage of GDP
18% 4%
16%
14%
3%
12%
Percentage of total taxation
Percentage of GDP
10%
2%
8%
6%
1%
4%
Note: These averages are unweighted. The number of jurisdictions used to calculate the
averages shown in this figure grew from 77 in 2000 to 88 in 2016. Therefore, the averages
2% shown in the early years are not strictly comparable with the averages shown in the later years.
Source: Data from the Global Revenue Statistics Database, http://oe.cd/global-rev-stats-database Percentage of total taxation Percentage of GDP
0% 0%
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
TRENDS IN CORPORATE TAX REVENUES Between 2000 and 2016, the trend for both indicators is
very similar. When measured both as a percentage of
Data from the OECD’s Corporate Tax Statistics database total tax revenues and as a percentage of GDP, corporate
reveal that there was a slight increase in both the tax revenues reached their peak in 2007 and then
average of corporate income tax (CIT) revenues as dipped in 2009 and 2010, reflecting the impact of the
a share of total tax revenues and as a share of GDP global financial and economic crisis. While average CIT
between 2000 and 2016 across the 88 jurisdictions revenues recovered after 2010, the unweighted averages
for which data are available (see Figure 1).2 Average declined in each of the last three years for which data
corporate tax revenues as a share of total tax revenues across all 88 jurisdictions are available (2014, 2015 and
increased from 12.0% in 2000 to 13.3% in 2016, and 2016). Some of the recent drop can be explained by a
average CIT revenues as a percentage of GDP increased drop in commodity prices, which has decreased CIT
from 2.7% in 2000 to 3.0% in 2016. revenues particularly in resource-intensive economies.
Corporate tax revenues are particularly important Corporate tax revenues as a share of total tax in 2016
in developing economies
(CIT revenues as a share of total tax revenues in 2016)
AFRICA (21): 15.3% LAC (25): 15.4%
25%
Corporate tax revenues made up more than
one-quarter of total tax revenues in 2016:
OR MORE Egypt, Kazakhstan, Malaysia, Papua New
Guinea, and the Philippines
OECD: 9.0%
5%
OR LESS
Corporate tax revenues made up less than
5% of total tax revenues in 2016: Bahamas,
France, Iceland, Slovenia, and Tokelau
2. The latest available tax revenue data available across all jurisdictions in the database are for 2016, although there are 2017 data available for some jurisdictions in the
Global Revenue Statistics database.
4 . OECD | CORPORATE TAX STATISTICS
FIGURE 2: Corporate tax revenues as a percentage of total tax revenues, 2016
MYS
EGY
PNG
KAZ
PHL
COL
SGP
THA
PER
TTO
GTM
COG
FJI
MEX
CHL
GUY
IDN
ESW
NER
HND
TGO
BFA
BOL
CMR
MAR
BLZ
AUS
ZAF
RWA
SLV
NZL
DOM
CUB
MLI
PRY
COD
GHA
MUS
KOR
COK
KEN
PAN
LUX
CPV
JPN
SGB
IRL
CHE
CZE
URY
SVK
CRI
CAN
NOR
CIV
JAM
ISR
BRA
WSM
ARG
PRT
NLD
SEN
GBR
BRB
BEL
USA
ESP
UGA
TUR
GRC
SWE
HUN
DNK
AUT
LVA
POL
TUN
LTU Revenues
DEU
EST LAC average (25)
FIN
ITA Africa average (21)
ISL
FRA OECD average
SVN
TKL Source: Data from the Global Revenue Statistics Database, http://oe.cd/global-rev-stats-database
BHS
0% 5% 10% 15% 20% 25% 30% 35% 40% 45%
Note: The statistical data for Israel are supplied by and under the responsibility of the relevant Israeli authorities. The use of such data by the OECD is without prejudice to the
status of the Golan Heights, East Jerusalem and Israeli settlements in the West Bank under the terms of international law.
CORPORATE TAX REVENUES . 5
The averages mask substantial differences across l the degree to which firms in a jurisdiction are
jurisdictions. In 2016, jurisdictions differed considerably incorporated;
in the portion of total tax revenues raised by the
l the breadth of the corporate income tax base;
corporate income tax (see Figure 2). In Egypt,
Kazakhstan, Malaysia, Papua New Guinea and the l the current stage of the economic cycle and the
Philippines, CIT revenue accounted for more than 25% degree of cyclicality of the corporate tax system
of total tax revenue. In Malaysia, it accounted for more (for example, from the generosity of loss offset
than 40%. In contrast, some jurisdictions – such as provisions);
the Bahamas, Tokelau,3 France, Iceland and Slovenia
l the extent of reliance on other types of taxation, such
– raised less than 5% of total tax revenue in the form
as taxes on personal income and on consumption;
of corporate income tax. The average revenue share of
corporate tax in 2016 also varied across the OECD and l the extent of reliance on tax revenues from the
the regional groupings (Latin American & the Caribbean exploitation of natural resources;
and Africa). In 2016, the OECD average was the lowest, at
l other instruments to postpone the taxation of earned
9.0%, compared to the African (21) average (15.3%) and
profits.
the LAC (25) average (15.4%).
Generally, differences in corporate tax revenues as a
Some of the variation in the share of corporate income share of total tax revenues should not be interpreted
tax in total tax revenues results from differences as being related to BEPS behaviour, since many other
in statutory corporate tax rates, which also vary factors are more significant, although profit shifting may
considerably across jurisdictions. In addition, this have some effects at the margin.
variation can be explained by institutional and
jurisdiction-specific factors, including:
3. The Bahamas and Tokelau do not levy a corporate income tax.
6 . OECD | CORPORATE TAX STATISTICS
FIGURE 3: Corporate tax revenues as a percentage of GDP, 2016
CUB
MYS
TTO
FJI
NZL
BLZ
EGY
COL
GUY
LUX
ZAF
AUS
BOL
MAR
THA
PHL
CHL
TGO
KAZ
NOR
HND
COK
PER
CZE
JPN
KOR
MEX
SVK
COG
BEL
PNG
CAN
NLD
BFA
SGP
BRA
CHE
ISR
PRT
URY
ESW
ARG
SLV
MUS
SLB
GTM
SWE
GBR
JAM
IRL
DNK
NER
BRB
RWA
PRY
ISL
GHA
GRC
CMR
MLI
AUT
CRI
HUN
WSM
IDN
CPV
KEN
ESP
FIN
ITA
DOM
PAN
FRA
USA
DEU
SEN
POL
CIV
EST Revenues
LVA
TUR LAC average (25)
LTU
TUN Africa average (21)
SVN
COD OECD average
UGA
TKL Source: Data from the Global Revenue Statistics Database, http://oe.cd/global-rev-stats-database
BHS
0% 1% 2% 3% 4% 5% 6% 7%
CORPORATE TAX REVENUES . 7
CORPORATE TAX REVENUES AS A SHARE OF GDP
Corporate tax revenues as a percentage of GDP also tax revenue share of total tax revenue differs, such
vary among jurisdictions. In 2016, the ratio of corporate as differences in statutory corporate tax rates and
tax revenues to GDP for a majority of jurisdictions fell differences in the degree to which firms in a given
between 2% and 5% of GDP (see Figure 3). For a few jurisdiction are incorporated. In addition, the total level
jurisdictions, corporate tax revenues accounted for a of taxation as a share of GDP plays a role. For example,
larger percentage of GDP; they are more than 5% of GDP for the 21 African jurisdictions, the relatively high
in Malaysia, Cuba, and Trinidad and Tobago. In contrast, average revenue share of CIT compared to the relatively
they are less than 2% of GDP in 12 jurisdictions. low average of CIT as a percentage of GDP reflects the
low amount of total tax raised as a percentage of GDP
In 2016, the OECD and African (21) averages were almost (average of 18.2%). Total tax revenue as a percentage of
identical, at 2.8% of GDP, whereas the LAC (25) average GDP is higher for the 25 LAC jurisdictions (average of
was higher (3.4%). 22.7%) and OECD jurisdictions (average of 34.0%). Across
jurisdictions in the database, low tax-to-GDP ratios may
The reasons for the variation across jurisdictions in reflect policy choices as well as difficulties in domestic
corporate tax revenues as a percentage of GDP are resource mobilisation.
similar to those that account for why the corporate
In 2016, average corporate tax revenues as a percentage of GDP were highest in
the LAC (25) region at 3.4%. The OECD and African (21) averages were 2.8%.
8 . OECD | CORPORATE TAX STATISTICS
Statutory corporate income tax rates
Statutory corporate income tax rates show the headline tax rate faced by corporations and can
be used to compare the standard tax rate on corporations across jurisdictions and over time. As
statutory tax rates measure the marginal tax that would be paid on an additional unit of income, in
the absence of other provisions in the tax code, they are often used in studies of BEPS to measure
the incentive that firms have to shift income between jurisdictions.
Standard statutory tax rates, however, do not give base to which the rate applies. Further information,
a full picture of the tax rates faced by corporations such as the data on effective corporate tax rates and
in a given jurisdiction. The standard corporate tax intellectual property (IP) regimes in the Corporate Tax
rate does not reflect any special regimes or rates Statistics database, is needed to form a more complete
targeted to certain industries or income types, nor picture of the tax burden on corporations across
does it take into account the breadth of the corporate jurisdictions.
KEY INSIGHTS:
l Statutory tax rates have been decreasing on average over the l Comparing 2000 and 2018, six jurisdictions – Bulgaria,
last two decades, although considerable variation among Germany, Guernsey, Jersey, the Isle of Man and Paraguay –
jurisdictions remains. The average combined (central and decreased their statutory tax rates by 20 percentage points
sub-central government) statutory tax rates for all covered or more. During this time, Guernsey, Jersey and the Isle
jurisdictions was 21.4% in 2018, compared to 21.7% in 2017 of Man eliminated preferential regimes and reduced their
and 28.6% in 2000. standard statutory tax rates to zero.
l Of the 94 jurisdictions covered, 18 had statutory tax rates l From 2017 to 2018, the combined statutory tax rate
equal to or above 30% in 2018, with India having the decreased in ten jurisdictions and increased in six (Canada,
highest statutory tax rate at 48.3%, which includes a tax on India, Korea, Latvia, Portugal, Turkey).
distributed dividends.
l The jurisdictions with the largest decreases in the combined
l In 2018, 12 jurisdictions had no corporate tax regime or corporate tax rate between 2017 and 2018 were France (an
a statutory income tax rate of zero. Only one jurisdiction, almost 10 percentage point decrease) and the United States
Hungary (9%), had a positive statutory tax rate less than (a decrease of 13.07 percentage points). France repealed
10%. Hungary, however, also has a local business tax, an exceptional surtax on corporate profits that had been
which does not use corporate profits as its base. This is not in place in 2017, and the United States lowered its central
included in Hungary’s statutory tax rate, but it does mean government corporate tax rate by 14 percentage points. The
that businesses in Hungary are subject to a higher level of tax jurisdiction with the largest increase was Latvia (an increase
than its statutory tax rate reflects. of 5 percentage points), which transitioned at the same time
to a CIT system where tax is only imposed on distributed
l Comparing statutory tax rates between 2000 and 2018, 76 earnings.
jurisdictions had lower tax rates in 2018, while 12 jurisdictions
had the same tax rate, and 6 had higher tax rates (Andorra;
Chile; Hong Kong, China; India; the Maldives; Oman).
The average statutory tax rate fell by 7.2 percentage points
l The largest increases between 2000 and 2018 were in
from 28.6 %
in 2000...
Andorra and Chile (both at 10 percentage points) and the
Maldives (15 percentage points). Andorra and the Maldives 21.4%
...to
in 2018
did not have a corporate tax regime and introduced one
during this time period.STATUTORY CORPORATE INCOME TAX RATES . 9
FIGURE 4: Statutory corporate income tax rates, 2018
IND
MLT
COD
FRA
BRA
MCO
SEN
PRT
SYC
SVG
NGA
MSR
MEX
KEN
GAB
AUS
ARG
AGO
DEU
JPN
BEL
PER
GRC
ZAF
NZL
ITA
KOR
BFA
CAN
LUX
USA
URY
PAN
NLD
LBR
JAM
IDN
ESP
CIV
CHN
CHL
BRB
AUT
MYS
NOR
ISR
EGY
TUR
SWE
DNK When comparing 2000 and 2018,
CUW
BWA statutory corporate tax rates:
CHE
SVK
VNM
THA
RUS FELL in
76
LVA
ISL
FIN
EST
SVN jurisdictions
POL
GBR
CZE
BRN
HRV
SGP
HKG WERE THE
ROM SAME in
12
SRB
OMN
MUS
MDV jurisdictions
LTU
LIE
IRL
MAC
PRY
BGR
AND
HUN INCREASED in
6
VGB
TCA
SAU
JEY
IMN jurisdictions
GGY
CYM
BMU
BHS
BHR
ARE
AIA
0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50%10 . OECD | CORPORATE TAX STATISTICS
Box 3. STATUTORY CORPORATE INCOME TAX RATES
The Corporate Tax Statistics database reports statutory tax The standard rate, that is not targeted at any particular
rates for resident corporations at the: industries or income type, is reported. The top marginal rate
is reported if a jurisdiction has a progressive corporate tax
l central government level;
system. Other special corporate taxes that are levied on a base
l central government level exclusive of any surtaxes; other than corporate profits are not included.
l central government level less deductions for subnational taxes;
The statutory tax rate data presented in this report refer to
l sub-central government level; combined statutory corporate tax rates, unless otherwise
noted.
l combined (central and sub-central) government level.
STATUTORY CORPORATE TAX RATES SINCE 2000
The distribution of statutory tax rates changed Most of the downward movement in tax rates between
significantly between 2000 and 2018 (see Figure 5). 2000 and 2018 was to statutory tax rates equal to or
In 2000, 12 jurisdictions had tax rates greater than or greater than 10% and less than 30%. The number of
equal to 40%, while only 1 jurisdiction (India) had a rate jurisdictions with tax rates equal to or greater than 20%
exceeding 40% in 2018, and that rate only applies to and less than 30% jumped from 20 jurisdictions to
distributed earnings. Over three-fifths (58 jurisdictions) 43 jurisdictions, and the number of jurisdictions with
of the 94 jurisdictions in the database had statutory tax tax rates equal to or greater than 10% and less than 20%
rates greater than or equal to 30% in 2000 compared to more than tripled, from 6 to 20 jurisdictions.
less than one-fifth (18 jurisdictions) in 2018.
FIGURE 5: Changing distribution of statutory corporate tax rates
50
2000
45
2018
40
35
30
Number of jurisdictions
25
20
15
10
5
0STATUTORY CORPORATE INCOME TAX RATES . 11
The average statutory corporate tax rate declined more significantly in the OECD
than in the regional groupings (a decline of 8.5 percentage points, from 32.2%
in 2000 to 23.7% in 2018).
Despite the general downward movement in tax rates regimes that were not compliant with the BEPS Action
during this period, the number of jurisdictions with very 5 minimum standard, and the Maldives is also in the
low tax rates of less than 10% remained fairly stable process of amending or abolishing such regimes.)
between 2000 and 2018. There were 10 jurisdictions
with tax rates less than 10% in 2000, and 13 below that CORPORATE TAX RATE TRENDS ACROSS REGIONS
threshold in 2018.
Since 2000, average statutory tax rates have declined
There has, however, been some movement of jurisdictions across OECD member states and three regional groupings
into and out of this category, and these movements of jurisdictions: 14 African jurisdictions, 17 Asian
illustrate how headline statutory tax rates do not give a jurisdictions and 19 LAC jurisdictions (see Figure 6).4
complete picture of the tax rate in a jurisdiction. Between
2005 and 2009, the British Virgin Islands, Guernsey, Jersey The grouping with the most significant decline has been
and the Isle of Man all moved from standard statutory the OECD (a decline of 8.5 percentage points, from 32.2%
corporate tax rates above 10% to zero corporate tax in 2000 to 23.7% in 2018) followed by the African (14)
rates. In all of these cases, however, before changing their average with a decline of 7.3 percentage points, from
standard corporate tax rate to zero, they had operated 34.4% in 2000 to 27.1% in 2018. While the averages have
broadly applicable special regimes that resulted in very fallen for each grouping over this period, there remains
low tax rates for qualifying companies. Meanwhile, a significant level of difference between the average for
Andorra and the Maldives instituted corporate tax regimes each group: the average corporate tax rate for Africa
and moved from zero rates to positive tax rates (10% (14) was 27.1% in 2018, compared to 23.7% for the OECD,
in Andorra beginning in 2012 and 15% in the Maldives 18.4% for Asia (17) and 17.9% for LAC (19).
beginning in 2011). However, they also introduced
preferential regimes as part of their corporate tax systems 4. As the sample of jurisdictions for which tax revenue data are available and the
sample of jurisdictions for which statutory corporate tax rate data are available are
that offered lower rates to qualifying companies. (Andorra not the same, the average corporate tax revenue and statutory tax rate data for the
has recently amended or abolished its preferential different regional groups should not be directly compared.12 . OECD | CORPORATE TAX STATISTICS
FIGURE 6: Average statutory corporate income tax rates by region
40%
Overall Africa (14) Asia (17) LAC (19) OECD
35%
30%
25%
20%
Note: For readability purposes, the Y-axis value has been positioned to start at 15%
15%
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Percentage of jurisdictions with statutory corporate tax rates greater than, or equal to, 30%
2000 2005 2010
40%
Overall Africa (14) Asia (13) LAC (13) OECD
62% 47% 29%
35%
2015 2018
30%
23% 19%
25%
Excluding jurisdictions with a zero statutory tax rate, the overall average
20%
statutory tax rate declined from 31.7% to 24.0% from 2000 to 2018.
15%
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 201815% STATUTORY CORPORATE INCOME TAX RATES . 13
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
FIGURE 7: Average statutory corporate income tax rates by region excluding zero-rate jurisdictions
40%
Overall Africa (14) Asia (13) LAC (13) OECD
35%
30%
25%
20%
Note: For readability purposes, the Y-axis value has been positioned to start at 15%
15%
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
The inclusion of jurisdictions with corporate tax rates the time period; meanwhile, the average statutory
of zero affects the average tax rate and has larger tax rate for the full group of 17 Asian jurisdictions is
effects on some regions than on others, since zero- 5-10 percentage points lower per year than the average
rate jurisdictions are not evenly distributed among the statutory tax rate for OECD jurisdictions.
different groups (see Figure 7).
Excluding zero-rate jurisdictions results in the most
Excluding zero-rate jurisdictions raises the overall average striking difference in the LAC region. In 2018, the
statutory tax rate by about 3.6 percentage points per year, average statutory tax rate across all 19 LAC jurisdictions
while the general downward trend remains the same. (17.9%) was 8.3 percentage points lower than the average
From 2000 to 2018, the overall average statutory rate for statutory tax rate for the 13 LAC jurisdictions with
non-zero rate jurisdictions declined from 31.7% to 24.0%. positive CIT rates (26.2%). With the exclusion of zero-
rate jurisdictions, the LAC (13) average is higher than
The effect of excluding zero-rate jurisdictions varies the OECD average and is second only to the average
by grouping. There are no zero-rate jurisdictions in statutory rate for African (13) jurisdictions.
the OECD or Africa (14), and so the average statutory
In 2018, the African (14) region had the highest average
tax rates of these groupings are not affected. However,
statutory corporate tax rate at 27.1%.
4 of the 17 Asian jurisdictions and 6 of the 19 LAC
jurisdictions have or had statutory corporate tax rates
set at zero; therefore, the average statutory tax rates
of the 13 Asian jurisdictions with positive statutory tax Africa (14)
rates and the 13 LAC jurisdictions with positive statutory
tax rates are higher than the averages for those regions
when all jurisdictions are included. The average
27.1%
statutory rates of non-zero-rate Asian (13) jurisdictions
and the OECD jurisdictions are extremely similar over14 . OECD | CORPORATE TAX STATISTICS
THE STANDARD STATUTORY CORPORATE TAX RATE IS NOT THE ONLY CORPORATE TAX RATE
Standard statutory tax rates provide a snapshot of Jurisdictions with broadly applicable tax regimes available
the corporate tax rate in a jurisdiction. However, to international companies
jurisdictions may have multiple tax rates with the
applicable tax rate depending on the characteristics of Preferential tax regimes are especially important in
the corporation and the income. understanding how standard statutory tax rates do not
always capture the incentives that may exist to engage
l Some jurisdictions operate preferential tax regimes
in BEPS behaviours. In particular, some jurisdictions offer
with lower rates offered to certain corporations or or have offered very low rates through regimes that are
income types. available to international companies with relatively few
restrictions, while maintaining high standard statutory
l Some jurisdictions tax retained and distributed
tax rates.
earnings at different rates.
l Some jurisdictions impose different tax rates on For example, a number of jurisdictions offer or have
certain industries. offered International Business Companies regimes.
Companies qualifying for these regimes pay a reduced
l Some jurisdictions have progressive rate structures rate of tax relative to the standard statutory CIT rate.
or different regimes for small and medium sized While the standard statutory tax rate may be quite high
companies. in these jurisdictions, qualifying international business
companies are typically exempt from tax or pay a tax
l Some jurisdictions impose different tax rates on non-
rate of only a few percentage points. There are also other
resident companies than on resident companies.
cases, like Malta, which offers a refund of up to six-
l Some jurisdictions impose lower tax rates in special sevenths of corporate income taxes to both resident and
or designated economic zones. non-resident investors through its imputation system.STATUTORY CORPORATE INCOME TAX RATES . 15
FIGURE 8: Tax rates of broadly applicable tax regimes
available to international companies
Malta
St Vincent and
the Grenadines
Montserrat
Seychelles
Barbados
Curaçao
Maldives
Taxes on distributed earnings
Mauritius
Another way in which standard statutory tax rates
Standard corporate may not reflect the rates imposed on companies is if
Andorra income tax rate
jurisdictions tax distributed earnings in addition to (or
Reduced rate
instead of) a corporate income tax on all profits.
0% 5% 10% 15% 20% 25% 30% 35% 40%
In some jurisdictions, there is a tax on all corporate
Figure 8 shows the standard CIT rate in 2018 as well as a profits when they are earned and an additional tax on
reduced CIT rate available through a special regime (or any earnings that are distributed. This is the case in India,
through an imputation system, in the case of Malta), for for example, where corporate profits, whether retained or
jurisdictions which have been identified as implementing distributed, are taxed at a rate of 34.9%, and an additional
regimes, with broad application, that offer low rates to tax on dividend distributions raises the total tax rate on
international companies. The jurisdictions shown in distributed profits to 48.3%.
Figure 8 are only those for which statutory CIT rate data is
available in the Corporate Tax Statistics database; there are In other jurisdictions, there is no tax on profits when
similar regimes around the world in other jurisdictions. they are earned, and corporate tax is only imposed
Since jurisdictions may offer multiple special regimes when profits are distributed. This is the case in both
and the exact tax rate may depend on the companies’ Estonia and Latvia, which both tax distributed profits
circumstances, the reduced rates shown are representative. at 20% and impose no tax on retained earnings. While
20% is reported for both countries in the Corporate Tax
Except for the Maltese imputation system, which is Statistics database, the rate faced by corporations in
not in the scope of the BEPS project, all of the regimes these jurisdictions could be much lower and will depend
shown were amended or abolished during 2018 or are in on the proportion of profits that are distributed. In the
the process or being amended or abolished to be aligned case of both of these jurisdictions, where a corporation
with the BEPS Action 5 minimum standard. These retains all profits and does not pay any dividends in
changes should greatly diminish the incentives these a given period, it will not be subject to any corporate
regimes provide for BEPS behaviour. income tax.16 . OECD | CORPORATE TAX STATISTICS
Corporate effective tax rates
Variations in the definition of corporate tax bases across jurisdictions can have a significant impact
on the tax liability associated with a given investment. For instance, corporate tax systems differ
across jurisdictions with regard to several important features, such as fiscal depreciation rules as
well as other allowances and deductions. To capture the effects of these provisions on corporate tax
bases and tax liabilities, it is necessary to go beyond a comparison of statutory tax rates.
It is well understood that cross-jurisdiction
Box 4. CORPORATE EFFECTIVE TAX RATES
competitiveness is not solely driven by the tax costs
associated with an investment; many other factors, such The Corporate Tax Statistics database contains four forward-
as the quality of the workforce, infrastructure and the looking tax policy indicators reflecting tax rules as of 1 July
legal environment, affect profitability and are likely to 2017:
have significant impacts on investment decisions. In
measuring the competitiveness of jurisdictions, however, l the effective marginal tax rate (EMTR);
effective tax rates (ETRs) provide a more accurate l the effective average tax rate (EATR);
picture of the effects of corporate tax systems on the
actual tax liabilities faced by companies than statutory l the cost of capital;
tax rates. l the net present value of capital allowances as a share of
the initial investment.
The Corporate Tax Statistics database presents “forward-
looking” ETRs, which are synthetic tax policy indicators All four tax policy indicators are calculated by applying
calculated using information about specific tax policy jurisdiction-specific tax rules to a prospective, hypothetical
rules. Unlike “backward-looking” ETRs, they do not investment project. Calculations are undertaken separately
incorporate any information about firms’ actual tax for investments in different asset types and by sources
payments. As described in more detail in Box 6, the ETRs of financing (i.e. debt and equity). Composite tax policy
reported in the first edition of Corporate Tax Statistics indicators are computed by weighting over assets and
focus on the effects of fiscal depreciation and several sources of finance. In addition, more disaggregated results
related provisions (e.g., allowances for corporate equity, are also reported in the Corporate Tax Statistics database.
half-year conventions, inventory valuation methods). The tax policy indicators are calculated for three different
While this includes fiscal depreciation rules for macroeconomic scenarios. Unless noted, the results
intangible property, such as acquired patents or trade- reported in this report refer to composite effective tax
marks, for example, the effects of expenditure-based rates based on the macroeconomic scenario with a 3% real
R&D tax incentives and intellectual property (IP) regimes interest rate and 1% inflation.
are not accounted for. It is intended that the effects of
R&D tax incentives and IP regimes will be included in
Largest statutory tax rate reductions due to fiscal acceleration
the dataset in the future.
(percentage points, 2017)
In addition, it should be noted that the ETRs reflect
tax rules as of 1 July 2017, thus not accounting for the
effects of the US Tax Cuts and Jobs Act, which entered
into force in 2018. Recent studies applying similar USA India Papua New Guinea Belgium
forward-looking ETR methodologies suggest that this 4.8 3.8 3.8 3.6
percentage points percentage points percentage points percentage points
reform package has significantly reduced the ETRs in the
United States.
If capital allowances are more generous than
economic depreciation, fiscal depreciation is
accelerated. Fiscal acceleration can be measured
by comparing the EATR to the statutory rate.CORPORATE EFFECTIVE TAX RATES . 17
KEY INSIGHTS:
l Of the 74 jurisdictions covered in 2017, 55 provide accelerated l Effective marginal tax rates (EMTRs) are the lowest in
depreciation, meaning that investments in these jurisdictions jurisdictions with the most accelerated fiscal depreciation
are subject to EATRs below their statutory tax rates. Among rules, including two large economies with comparatively
those jurisdictions, the average reduction of the statutory high statutory tax rates: India and the United States. In
tax rate was 1.8 percentage points; in 2017, the largest addition, jurisdictions with an ACE also have considerably
effects were observed in the United States (4.8 percentage lower EMTRs.
points), India (3.8 percentage points), Papua New Guinea
(3.8 percentage points) and Belgium (3.6 percentage points). l Disaggregating the results to the asset level reveals that fiscal
acceleration is strongest for investments in buildings and
l In contrast, fiscal depreciation was decelerated in 11 juris machinery. For these two asset categories, the average EATR
dictions, leading to EATRs above the statutory tax rate. Among across jurisdictions is 19.3% and 19.6%, considerably lower
those jurisdictions, the average increase of the statutory tax rate than the average composite EATR (20.5%).
was 2.4 percentage points; the largest increases were observed
in Costa Rica (8 percentage points), Chile (6.8 percentage points) l Investments in intangibles are subject to very different
and Botswana (5.3 percentage points). ETRs due to significant variation in tax treatment across
jurisdictions. In particular, intangibles are non-depreciable
l Among all 74 jurisdictions, only 5 jurisdictions had an in Botswana, Chile and Costa Rica, leading to strongly
allowance for corporate equity (ACE): Belgium, Brazil, Italy, decelerated fiscal depreciation. Argentina, Australia, Brazil,
Liechtenstein and Turkey. Including this provision in their tax South Africa and Spain provide moderately decelerated
code has led to an additional reduction in their EATRs of depreciation of intangibles. On the other hand, a significant
1.3-4.4 percentage points. number of jurisdictions accelerates depreciation of
intangibles, including Denmark, Kenya, Papua New Guinea
l The average EATR across jurisdictions (20.5%) is 1.1 percentage and the United States.
points lower than the average statutory tax rate (21.6%).
EATRs are also less dispersed across jurisdictions compared l Comparison of statutory tax rates and the degree of
to the statutory tax rate. While the median is about the same acceleration measured in percentage points suggests
as for the statutory tax rate, the highest EATR is only 44.1%, that jurisdictions with higher statutory tax rates tend to
compared to the highest statutory tax rate at 47.9%; half of the provide stronger fiscal acceleration, especially among OECD
jurisdictions covered have EATRs between 14.5% and 27.4%. jurisdictions.18 . OECD | CORPORATE TAX STATISTICS
CORPORATE EFFECTIVE TAX RATES 2017
ETRs fall into two categories: forward-looking and l EATRs reflect the average tax contribution a firm
backward-looking ETRs. Forward-looking ETRs capture makes on an investment project earning above-zero
information on corporate tax rates and bases as well economic profits. This indicator is used to analyse
as other relevant provisions within a comparable discrete investment decisions between two or more
framework. They provide an appropriate basis for cross- alternative projects (along the extensive margin).
jurisdiction comparisons of the combined impact of
corporate tax systems on the investment decisions In contrast, backward-looking ETRs are calculated by
of firms. Although these forward-looking ETRs do not dividing actual tax payments by profits earned over a
reflect actual tax payments by specific taxpayers in the given period. They are calculated on the basis of historical
past, they are accurate indicators of the investment jurisdiction-level or firm-level data and reflect the combined
incentives delivered by corporate tax systems and effects of many different factors, such as the definition
therefore provide comparable information on the of the tax base, the types of projects that firms have been
competitiveness of tax systems. engaged in, as well as the effects of possible tax-planning
strategies. Although backward-looking ETRs may not reflect
Two complementary forward-looking ETRs are typically how corporate tax systems affect incentives to invest at
used for tax policy analysis, capturing incentives at present, they provide information on how tax payments and
different margins of investment decision making: profits of specific taxpayers or groups of taxpayers compare
to each other in the past. Therefore, backward-looking ETRs
l EMTRs measure the extent to which taxation are often referred to in public debates about multinational
increases the pre-tax rate of return required by tax avoidance and BEPS. The second edition of Corporate Tax
investors to break even. This indicator is used to Statistics will include aggregated and anonymised data from
analyse how taxes affect the incentive to expand Country-by-Country Reports allowing for the calculation
existing investments given a fixed location (along the of some backward-looking ETRs for certain groups of
intensive margin). multinational enterprises.
Among the 55 jurisdictions that provide accelerated depreciation, the average
reduction of the statutory tax rate was 1.8 percentage points.CORPORATE EFFECTIVE TAX RATES . 19
Box 5. KEY CONCEPTS AND METHODOLOGY
Forward-looking effective tax rates (ETRs) are calculated on l The effective average tax rate (EATR) reflects the average
the basis of a prospective, hypothetical investment project. tax contribution a firm makes on an investment project
The OECD methodology has been described in detail in the earning above-zero economic profits. It is defined as the
OECD Taxation Working Paper No. 38 (Hanappi, 2018), building difference in the NPV of pre-tax and post-tax economic
on the theoretical model developed by Devereux and Griffith profits relative to the NPV of pre-tax income net of real
(1999, 2003). economic depreciation.
pre-tax post-tax
The methodology builds on the following key concepts: (Economic profit NPV ) – (Economic profit NPV )
EATR =
pre-tax
(Net income NPV )
l Economic profits are defined as the difference between
total revenue and total economic costs, including explicit l Real economic depreciation is a measure of the decrease
costs involved in the production of goods and services as in the productive value of an asset over time; depreciation
well as opportunity costs such as, for example, revenue patterns of a given asset type can be estimated using asset
foregone by using company-owned buildings or self- prices in resale markets. The OECD methodology uses
employment resources. It is calculated as the net present economic depreciation estimates from the US Bureau of
value (NPV) over all cash flows associated with the Economic Analysis (BEA, 2003).
investment project.
l Jurisdiction-specific tax codes typically provide capital
l The cost of capital is defined as the pre-tax rate of return allowances to reflect the decrease in asset value over time
on capital required to generate zero post-tax economic in the calculation of taxable profits. If capital allowances
profits. In contrast, the real interest rate is the return on match the decay of the asset’s value resulting from it
capital earned in the alternative case, for example, if the being used in production, then fiscal depreciation equals
investment would not be undertaken and the funds would economic depreciation.
remain in a bank account.
l If capital allowances are more generous, fiscal depreciation
l The effective marginal tax rate (EMTR) measures the is accelerated; where capital allowances are less generous,
extent to which taxation increases the cost of capital; it fiscal depreciation is referred to as decelerated. The NPV
corresponds to the case of a marginal project that delivers of capital allowances, measured as percentage of the initial
just enough profit to break even but no economic profit investment, accounts for timing effects on the value of
over and above this threshold. capital allowances, thus providing comparable information
on the generosity of fiscal depreciation across assets and
(Cost of capital) – (Real interest rate) jurisdictions.
EMTR =
(Cost of capital)
The cost of capital, EMTR, EATR as well as the NPV of capital
allowances are all available for 74 jurisdictions in the
Corporate Tax Statistics online database.20 . OECD | CORPORATE TAX STATISTICS
EFFECTIVE AVERAGE TAX RATES
Figure 9 shows the composite EATR for the full database, To allow comparison with the statutory tax rate, the
ranking jurisdictions in descending order. In most share of the EATR (in percentage points) that is due to
jurisdictions, EATRs diverge considerably from their a deceleration of the tax base is shaded in light blue
statutory tax rate; if fiscal depreciation is generous in Figure 9; reductions of the statutory tax rate due to
compared to true economic depreciation or if there are acceleration are transparent. In addition, the reduction
other significant base narrowing provisions, the EATR in the EATR due to an ACE is indicated as a striped area.
(and also the EMTR) will be lower than the statutory tax The composite EATR corresponds to the combination of
rate, i.e. tax depreciation is accelerated. On the contrary, the unshaded and shaded blue components of each bar, as
if tax depreciation does not cover the full effects of true indicated by the red line marker. Across the entire sample
economic depreciation, it is decelerated, implying that the of jurisdictions, the EATRs range from around 44% in India
tax base will be larger and effective taxation higher. to 0% in the British Virgin Islands, Turks and Caicos Islands,
Saudi Arabia, Isle of Man, Jersey, Guernsey, and the Cayman
Box 6. ASSET CATEGORIES AND TAX PROVISIONS Islands. Ranking just above these jurisdictions, Andorra,
COVERED Bulgaria and Hungary have EATRs around 9%, the lowest
non-zero rates in the sample.
The calculations build on a comprehensive coverage
of jurisdiction-specific tax rules pertaining to four Comparing the patterns of tax depreciation across juris
quantitatively relevant asset categories: dictions shows that most jurisdictions provide some degree
of acceleration, as indicated by the transparent bars;
1. buildings: e.g. office buildings or manufacturing plants;
the most significant effects are observed in jurisdictions
2. machinery: e.g. machinery, cars, furniture or equipment; with an ACE, such as Belgium, Brazil and Italy, as well
as in jurisdictions with generous bonus depreciation
3. inventories: e.g. goods or raw materials in stock;
schemes, such as India and the United States. While fewer
4. intangibles: e.g. acquired patents or trademarks. jurisdictions have decelerating tax depreciation rules, the
effect of deceleration can become quite large in terms
The following corporate tax provisions have been covered:
of percentage point increases compared to the statutory
l combined central and sub-central statutory corporate tax rate; e.g. in Botswana, Chile and Costa Rica, where
income tax rates; intangible assets are non-depreciable.
l asset-specific fiscal depreciation rules, including first-
year allowances, half-year or mid-month conventions; Box 7. MACROECONOMIC SCENARIOS
l general tax incentives only if available for a broad The two main macroeconomic parameters, inflation and
group of investments undertaken by large domestic or interest rates, interact with the effects of the tax system
multinational firms; in various ways and can have ambiguous effects on the
l inventory valuation methods including first-in-first-out, effective tax rates (ETRs).
last-in-first-out and average cost methods; The Corporate Tax Statistics database contains ETR results for
l allowances for corporate equity. three different macroeconomic scenarios. In the first two
scenarios, interest and inflation rates are held constant; the
The composite ETRs reported in this brochure are constructed
third scenario uses jurisdiction-specific macroeconomic
in three steps. First, ETRs are calculated separately for each
parameters. While the former approach addresses the question
jurisdiction, asset category and source of finance (debt and
of how differences in tax systems compare across jurisdictions
equity); while the debt-finance case accounts for interest
holding other factors constant, the latter approach gives better
deductibility, jurisdiction-specific limitations to interest
indications on the tax effects on investment incentives in a
deductibility have not been covered in this edition. Second,
specific jurisdiction at a specific point in time.
an unweighted average over the asset categories is taken,
separately for both sources of finance. Third, the composite The results published in this brochure build exclusively on
ETRs are obtained as a weighted average between equity- the macroeconomic scenario with constant 3% interest and
and debt-financed investments, applying a weight of 65% 1% inflation rates, however, results from the two additional
equity and 35% debt finance. macroeconomic scenarios are available in the online database.CORPORATE EFFECTIVE TAX RATES . 21
FIGURE 9: Effective average tax rate: OECD, G20 and participating Inclusive Framework jurisdictions, 2017
IND
CRI
ARG
USA
MLT
FRA
CHL Lo
COD
AUS
MSR
BRA
SYC
PER
GRC
SEN
PRT
JPN
MEX
BWA
DEU
ZAF
KEN
NZL
PNG
BEL
ESP
CAN
LUX
AUT
CHN
JAM
KOR
NOR
NLD
ISR
IDN
ITA
SVK
THA
CZE
CUW
TUR
SWE
CHE
DNK
GBR
FIN
ISL
RUS
SVN
POL
EST
SGP
HRV
HKG
ALB
ROU
MUS
LVA
LTU
CYP
IRL
MAC
LIE Acceleration: EATR decrease compared to STR (pp)
HUN
BGR Deceleration effects counterbalanced by ACE (pp)
AND
Deceleration: EATR increase compared to STR (pp)
VGB
TCA EATR reduction due to ACE (pp)
SAU
JEY EATR
IMN
GGY Statutory Corporate Tax Rate
CYM
0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50%22 . OECD | CORPORATE TAX STATISTICS
EFFECTIVE MARGINAL TAX RATES
Figure 10 shows the ranking based on the composite If investment projects are financed by debt, it is also
EMTR. As highlighted above, the EMTR measures the possible for the EMTR to be negative, which means that
effects of taxation on the pre-tax rate of return the tax system, notably through interest deductibility,
required by investors to break even. While the effects reduces the pre-tax rate of return required to break even
of tax depreciation and macroeconomic parameters and thus enables projects that would otherwise not
work in the same direction as in the case of the EATR, have been economically viable. Figure 10 shows that the
their impacts on the EMTR will generally be stronger composite EMTR, based on a weighted average between
because marginal projects do not earn economic profits equity- and debt-financed projects, is negative in 7 out
(see Box 5). As a consequence, jurisdictions with high of 74 jurisdictions; this result is due to the combination
statutory tax rates and generous capital allowances, of debt finance with comparatively generous tax
notably India and the United States, rank much lower depreciation rules. For jurisdictions with an ACE, the
than in Figure 9. On the other hand, jurisdictions with composite EMTR will generally be lower because of the
decelerating fiscal depreciation, including Australia, the notional interest deduction available for equity-financed
Czech Republic, Slovakia or Thailand, are ranked higher projects.
up based on the EMTR, as shown in Figure 10.
5 jurisdictions had an allowance for corporate equity (ACE): Belgium, Brazil, Italy,
Liechtenstein and Turkey. Including this provision in their tax code has significant
effects on the incentive to expand existing investments as measured by the EMTR.CORPORATE EFFECTIVE TAX RATES . 23
FIGURE 10: Effective marginal tax rate: OECD, G20 and participating Inclusive Framework jurisdictions,2017
CRI
CHL
AUS
ARG
MSR
BWA
CZE
ESP
SVK
TUR
THA
GBR
MLT
GRC
NOR
PER
KOR
NZL
ISR
FRA
SYC
AUT
CHN
JAM
FIN
ALB
ISL
PRT
SEN
CUW
SVN
DEU
CAN
RUS
SGP
NLD
JPN
ZAF
CHE
POL
SWE
CYP
MAC
MEX
MUS
IRL
LUX
HKG
COD
ROU
IDN
LVA
BGR
HUN
DNK
AND
KEN
LTU
HRV
VGB
TCA
SAU
JEY
IMN
GGY
EST
CYM
PNG
LIE
USA
BRA
ITA
IND
BEL
-50% -40% -30% -20% -10% 0% 10% 20% 30%24 . OECD | CORPORATE TAX STATISTICS
EFFECTIVE TAX RATES BY ASSET CATEGORIES
The composite ETRs can be further disaggregated by mean EATR for investments in intangibles suggests that
asset categories; jurisdiction-level EATRs and EMTRs there are several outliers at the top of the distribution.
by asset categories are available in the online Corporate
Tax Statistics database. Figure 11 summarises these data The lower panel depicts further information illustrating
on asset-level ETRs. The upper panel provides more the EMTR distribution for each of the asset categories.
information on the distribution of asset-specific EATRs, From this graph, we can draw the following insights:
comparing them to the distribution of statutory tax
rates. The first vertical line depicts information on the l Investments in machinery benefit more often from
statutory tax rates; it shows that the mean (i.e. the red accelerated tax depreciation than other investments;
triangle in the middle of the first vertical line) and the as a result, the corresponding vertical line is more
median (the blue circle) are both around 22%, while the condensed and centred around zero.
50% of jurisdictions in the middle of the distribution
have statutory tax rates between 16% and 30%. l Investments in buildings are also often accelerated,
as evidenced by the vertical line that ranges from 0%
The other four vertical lines in the upper panel of to around 9%.
Figure 11 illustrate the distribution of EATRs across
jurisdictions for each of the four asset categories: l Investments in inventories often benefit from lower
buildings, machinery, inventories and intangibles. EMTRs, compared to the statutory tax rate, although
Comparing them with the statutory tax rate shows to a lesser extent than the first two asset categories.
that the distribution of EATRs is more condensed for
investments in buildings and machinery. For both of l Marginal investments in intangibles can be subject to
these asset categories, the middle 50% of jurisdictions very different EMTRs in different jurisdictions, reflected
have EATRs between around 14% and 26%, however, in the vertical line that stretches out more than the
the mean EATR on investments in machinery is around others, ranging from around 0% to just below 30%.
2 percentage points lower than the median, indicating This result is driven, on the one hand, by the variation
that some jurisdictions have much lower EATRs on this surrounding the actual economic depreciation of
type of investment. For investments in the other two intangible assets as well as, on the other hand, different
asset categories, the distributions are similar to the policy treatments across jurisdictions.
statutory tax rate, although the comparatively highYou can also read
