The Organisation for Economic Cooperation and Development (OECD) today issued a report providing internationally comparable statistics and analysis from approximately 100 countries on four main categories of data:
A related OECD release reports that the analysis shows that corporate income tax remains a significant source of tax revenues for governments across the globe—despite a trend of falling corporate tax rates. In 2016, corporate tax revenues accounted for 13.3% of total tax revenues on average across the 88 jurisdictions for which data is available (an increase from 12% in 2000) with corporate taxation being “even more important” in developing countries.
The OECD analysis shows that corporate tax remains a key source of revenue, despite a clear trend of falling corporate tax rates. The average combined (central and sub-central government) tax rate fell from 28.6% in 2000 to 21.4% in 2018. More than 60% of the 94 jurisdictions for which tax rate data is available in the database had statutory tax rates greater than or equal to 30% in 2000, compared to less than 20% of jurisdictions in 2018.
The OECD analysis highlights that corporate income tax revenues are influenced by many factors, and focusing on tax rates can be misleading. As noted by the OECD, jurisdictions may have multiple tax rates with the applicable tax rate depending on the characteristics of the corporation and the income. Progressive rate structures or different regimes may be offered to small and medium-sized companies, while different tax rates may be imposed on companies depending on their resident or non-resident status. Some jurisdictions tax retained and distributed earnings at different rates, while some impose different tax rates on certain industries. Lower tax rates are often available for firms active in special or designated economic zones, and preferential tax regime offer lower rates to certain corporations or income types.
Another factor is the definition of the corporate tax base. The OECD looked at how standard components of the corporate tax base reduce the effective tax rate, including the effects of fiscal depreciation and several related provisions, such as allowances for corporate equity. Targeted tax incentives—for instance, for research and development (R&D) expenditures and intellectual property (IP) income—are used to reduce the corporate tax burden for specific activities.
© 2019 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm.
The KPMG logo and name are trademarks of KPMG International. KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever. The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.