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.
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