Global corporate tax rates stabilize after years of decline, new OECD report finds

After decades of downward trends, global corporate tax rates have stabilized, according to the latest data from the Organization for Economic Co-operation and Development (OECD).

The newly released 2024 OECD Corporate Tax Statistics reveal that the average statutory corporate income tax (CIT) rate has held steady at 21.1% over the past three years. This marks a significant shift following a prolonged period from 2000 to 2021 where average CIT rates dropped from 28% to 21.1%.

The report suggests that the anticipation of the Global Minimum Tax, endorsed by over 140 members of the Inclusive Framework on Base Erosion and Profit Shifting, may have contributed to this stabilization. Over 35 jurisdictions are either implementing or planning to implement the 15% minimum corporate effective tax rate starting in 2024, reducing competitive pressures that previously drove statutory CIT rates downward.

Additionally, the 2024 Corporate Tax Statistics highlight a stabilization in tax incentives aimed at attracting mobile intangible assets and their related income. New data on effective tax rates available to multinational enterprises (MNEs) through tax incentives, such as intellectual property (IP) regimes, shows that these rates have remained relatively constant from 2019 to 2023, following a near 13 percentage point decline from 2000 to 2019.

The report also includes new country-by-country data on MNEs’ effective tax rates within jurisdictions, uncovering low-taxed profits in high-tax regions. This indicates the continued use of tax incentives and other concessions and underscores the revenue-raising potential of the Global Minimum Tax, even in traditionally high-tax jurisdictions, according to the OECD.

Further analysis of the 2021 aggregated and anonymized Country-by-Country Report (CbCR) statistics indicates a decline in Base Erosion and Profit Shifting (BEPS) activities in recent years. Investment hubs have seen high-level BEPS activity indicators fall relative to their values from four years prior. Median revenues per employee dropped by 13.1%, median profits per employee by 16.1%, and median related party revenues as a share of total revenue by 11.5%. However, the report cautions that the 2021 data may also reflect the economic impact of the COVID-19 pandemic.

The OECD’s latest report covers data from over 160 countries and jurisdictions, providing insights into statutory and effective tax rates, withholding taxes and tax treaties, corporate tax revenues, and detailed information on MNEs’ international activities.

For further information and access to the data, visit: OECD Corporate Tax Statistics Database.