Executive summary

On 11 July 2024, the OECD released the sixth edition of its annual Corporate Tax Statistics publication (the Corporate Tax Statistics Report), along with an updated Corporate Tax Statistics Database. The Report provides an overview of corporate tax data across 160 countries and jurisdictions, covering statutory and effective tax rates, withholding taxes, tax treaties, corporate tax revenues, multinational enterprise (MNE) international activities and aggregated country-by-country reporting (CbCR) data. The Report is accompanied by an updated set of Frequently Asked Questions (FAQs) on the anonymized and aggregated CbCR data.

The updated Database includes anonymized and aggregated CbCR statistics based on 2021 data. It covers 52 headquarters jurisdictions and up to 217 affiliate jurisdictions from 2016 to 2021. Further, the Database includes a new dataset on income-based tax incentives for research and development (R&D) and innovation, as well as updated information on controlled foreign company (CFC) rules and interest limitation rules. Additionally, it includes information on 61 intellectual property regimes across 46 jurisdictions and provides withholding tax rate statistics for 144 jurisdictions.

Detailed discussion

Background

In October 2015, the OECD released the final reports on all 15 Action areas in its Base Erosion and Profit Shifting (BEPS) project.¹ The BEPS Action 11 report on Measuring and Monitoring BEPS focused on estimating the scale of BEPS activity, identifying indicators of BEPS and providing recommendations for improving the measurement of BEPS.

In January 2019, the OECD released the first edition of the Corporate Tax Statistics database, which provided statistics and analysis covering approximately 100 countries on four main categories of data: (i) corporate tax revenues; (ii) statutory corporate income tax rates; (iii) corporate effective tax rates (ETRs); and (iv) tax incentives related to innovation.² In July 2020, the OECD released the second edition of the database, including the first release of anonymized and aggregated data collected through CbCR for 2016.³ The third, fourth and fifth editions of the database were released in July 2021, November 2022 and November 2023, respectively.⁴

Corporate Tax Statistics: Sixth edition

The sixth edition of the Corporate Tax Statistics Report and Database compile new data items and statistics from various existing data sets held by the OECD, with the aim of supporting the analysis of corporate taxation in general and BEPS activity in particular. The OECD press release indicates that statutory corporate tax rates have stabilized over the past three years after a lengthy period of falling rates, suggesting that anticipation of the new Pillar Two global minimum tax may have contributed to the stabilization and noting that more than 35 jurisdictions are implementing (or are planning to implement) the 15% minimum corporate effective tax rate with effect from 2024. This year's Report also identifies a stabilization of certain tax incentives designed to attract mobile intangible assets and their related income. The press release further states that "new country-by-country data on the variation of MNEs' effective tax rates within jurisdictions highlights the presence of low-taxed profit in high-tax jurisdictions, which may reflect the use of tax incentives and other targeted concessions."

The sixth edition of the Corporate Tax Statistics Database contains the following categories of data:

• Corporate tax revenues
• Statutory corporate income tax rates
• Corporate ETRs
• Tax incentives for R&D
• Implementation of CbCR under BEPS Action 13
• Controlled foreign company (CFC) rules
• Interest limitation rules
• Intellectual property (IP) regimes
• Standard withholding tax rates and bilateral tax treaties
• Anonymized and aggregated CbCR statistics

Corporate tax revenues

The Database includes information on 123 jurisdictions from 1965 — 2021 (for OECD member countries) and 1990 — 2021 (for non-OECD member jurisdictions). In 2021, the share of corporate tax revenues in total tax revenues was 16% on average, and the share of these revenues as a percentage of GDP was 3.2% on average.

According to the Report, the size of corporate tax revenues relative to total tax revenues and relative to GDP varies by groupings of jurisdictions. On average, corporate income tax accounts for a higher share of total taxes in Africa (18.7%), Asia and the Pacific (18.2%) and Latin America and the Caribbean (15.4%) than in OECD member countries (10.2%). In 17 jurisdictions, corporate tax revenues made up more than one-quarter of total tax revenues in 2021.

Statutory corporate income tax rates

The Database covers 143 Inclusive Framework member jurisdictions from 2000 — 2024. The report indicates that statutory corporate income tax rates have remained stable in the period between 2021 and 2024, which follows a decline over the last two decades, and rates remain below historic averages. The average combined (central and sub-central government) statutory corporate tax rate for these jurisdictions was 21.1% in 2024, as compared to 28% in 2000.

Of the 143 jurisdictions covered, 25 had corporate tax rates equal to or above 30% in 2024, three had corporate tax rates lower than 10%, and 11 had no corporate tax regime or a corporate tax rate of zero. Further, the number of jurisdictions with rates lower than 10% remained stable between 2000 and 2024, with 16 in 2000 and 14 in 2024.

Corporate effective tax rates

The Database covers 90 jurisdictions for 2017 — 2023. It contains four forward-looking ETR indicators, calculated using information about specific tax rules and focusing on the effects of tax depreciation rules and related provisions (e.g., allowances for corporate equity, half-year conventions, inventory valuation methods) as of 1 July for the years 2017 — 2023: (i) the effective average tax rate (EATR); (ii) the effective marginal tax rate (EMTR); (iii) the cost of capital; and (iv) the net present value of capital allowances as a share of the initial investment. These indicators do not incorporate any information about firms' actual tax payments.

The Report notes that the average EATR across jurisdictions (20.2%) is 1.0 percentage point lower than the average statutory tax rate (21.5%). The median EATR is 2.8 percentage points lower (22.2%) than the median STR (25.0%). More than half of the jurisdictions covered have EATRs between 15% and 28%, with several Latin American and the Caribbean jurisdictions having EATRs at the higher end of the range due to the decelerating effect of their tax depreciation rules for acquired software (e.g., Colombia and Brazil).

Of the 90 jurisdictions covered in 2023, 79 allowed accelerated depreciation, meaning that investments in these jurisdictions were subject to EATRs below the statutory tax rates, and eight had an allowance for corporate equity (ACE) that further reduced their EATRs.

Tax incentives for R&D

The Database includes two sets of indicators on the extent of R&D tax support provided through expenditure-based R&D tax incentives. The first set of indicators reflects the cost to the government of expenditure-based tax incentives; the second set is intended to capture the effect on firms' investment costs of expenditure-based R&D tax incentives. Both sets of indicators cover 48 jurisdictions for the period 2000 — 2023.

The Report states that R&D tax incentives are increasingly being used to promote business R&D, with 33 out of the 38 OECD member countries providing tax relief with respect to R&D expenditures in 2023, compared to 19 in 2000. It further indicates that most jurisdictions use some combination of direct support and tax relief with the respect to business R&D. The Report also indicates that R&D tax incentives have become more generous on average over time, noting the higher uptake and increased generosity of R&D tax relief provisions. It notes that this trend stabilized between 2013 and 2019, followed by an observed increase in generosity from 2020 through 2022.

Action 13 implementation and anonymized and aggregated CbCR data

The Database includes an additional year of anonymized and aggregated CbCR statistics, now covering fiscal year 2021.

Although 101 jurisdictions required mandatory filing of CbC reports for 2021, only 52 jurisdictions were considered to have received a sufficient number of CbC reports to be able to provide aggregated statistics while ensuring taxpayer confidentiality, with a further five jurisdictions reporting that they received zero CbC reports. The aggregated CbCR data for 2021 covers almost 8,000 MNEs.

The Report states that the latest CbCR data shows evidence of misalignment between the location where profits are reported and the location where economic activities occur. The data shows continuing differences in the distribution of employees, tangible assets, and profits across jurisdiction groups. For example, high- and middle-income jurisdictions account for a higher share of total employees (respectively 37% and 44%) and total tangible assets (respectively 38% and 32%) than of profits (respectively 32% and 24%). On the other hand, investment hub jurisdictions on average account for a relatively high share of profits (18%) compared to their share of employees (4%) and tangible assets (12%). High-income jurisdictions, middle-income jurisdictions and investment-hub jurisdictions account for 36%, 32% and 11% of tax accrued, respectively. While these indicators could reflect reduced BEPS behavior, the Report notes that the 2021 CbCR data could also be affected by the COVID-19 pandemic. Moreover, these indicators remain higher in investment hubs than in other jurisdictions, suggesting the continued existence of BEPS activity.

The Report notes that the aggregated CbCR data is subject to limitations that need to be kept in mind when using it for any economic or statistical analysis. According to the Report, some of the limitations have been addressed through revised guidance on CbCR implementation. For example, with respect to the double-counting of dividends, the guidance was updated in November 2019 to specify that intra-company dividends should be excluded from the profit figure. However, it is expected to take several years before these updates lead to improvements in data quality. Other issues (e.g., the treatment of stateless entities) are the subject of ongoing discussion, including through a continuing review of the CbCR rules in BEPS Action 13, which could lead to the collection of more detailed information through CbC reports in the future. The Report indicates that the OECD continues to work with member jurisdictions of the Inclusive Framework and other stakeholders to improve the quality and consistency of the data across jurisdictions. The Report further notes that, even with additional years of data, economic and other events affecting the data may make it difficult to identify the effect of BEPS-related policies.

CFC rules and interest-limitation rules

Regarding BEPS Action 3, the Report states that the use of CFC rules is widespread, with CFC rules in place in 53 Inclusive Framework jurisdictions in 2024, a slight increase from 2019, when 49 had CFC rules in place.

Regarding BEPS Action 4, the Report indicates that the use of interest-limitation rules has seen substantial growth, with 100 Inclusive Framework jurisdictions having these limitations in place, a significant increase from 67 in 2019.

IP regimes

The Database includes information on regimes that narrowly target IP income and regimes that offer reduced rates for IP income and other types of income. Of the 61 IP regimes covered in the Database for 46 Inclusive Framework jurisdictions in 2024, 43 regimes were found to be not harmful upon review by the OECD Forum on Harmful Tax Practices, one was found to be potentially harmful but not actually harmful and one was found to be harmful. Six regimes were in the process of being amended or eliminated because they were not compliant with the BEPS Action 5 minimum standard. Ten regimes were listed as abolished in 2024.

The Database groups IP regimes into three main categories based on qualifying assets: (1) regimes covering patents, (2) regimes covering software and (3) regimes restricted to small and medium enterprises (SMEs). Of the 43 non-harmful IP regimes, all 43 offer benefits on patents, 32 offer benefits on copyrighted software and 19 offer benefits restricted to SMEs on other IP assets. Tax rate reductions for the 43 non-harmful IP regimes range from a full exemption from tax to a reduction of approximately 40% of the standard tax rate.

Withholding tax rates

The Database includes withholding tax rate statistics for 144 jurisdictions, including all Inclusive Framework members. The Report indicates that the coverage of statistics on withholding tax rates has expanded significantly. The Database includes withholding tax rates on dividends, interest and royalty payments that are applicable as of the 2024 fiscal year.

High-income jurisdictions levy an average standard withholding tax rate on dividends of 15.2%, which is 3.0 percentage points higher than the average standard withholding tax rate on dividends in low- and middle-income jurisdictions (12.2%) and approximately three times the average rate in investment hub jurisdictions (5.2%). With respect to interest payments, the average standard withholding tax rate in high-income jurisdictions is 12.8%, compared to 14.9% in low- and middle-income jurisdictions and 5.7% in investment-hub jurisdictions. Royalty payments are subject to an average standard withholding tax rate of 15.6% in high-income jurisdictions and 16.4% in low- and middle-income jurisdictions. These rates are considerably higher than the average standard 5.7% withholding tax rate applied to royalties in investment hubs.

The Report states that bilateral tax conventions can play a crucial role in encouraging and fostering economic ties between countries, including through limitations on the withholding taxes that may be applied to specified categories of income. Although the number of tax treaties across the 144 jurisdictions in the database has grown significantly from 1,008 in 1990 to nearly 4,850 in 2024, the pace of new treaties has slowed in recent years, with only 294 additional treaties concluded between 2017 and 2024.

Implications

The Corporate Tax Statistics in general, and the aggregated CbCR data in particular, represent a source of information for analyzing the taxation of MNEs, but the OECD acknowledges that the data has some significant limitations that should be considered in using the information.

Companies may want to review the Corporate Tax Statistics Report and Database and consider the implications of the OECD's interpretations of the data, which may provide some signals regarding the future direction of tax policy proposals.