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Data supports international tax reform plans

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The OECD has released new data that underlines the importance of the two-pillar plan being advanced by over 130 members of the OECD/G20 inclusive framework on BEPS to reform international taxation rules and ensure that multinational enterprises pay a fair share of tax wherever they operate.

The data, released in the OECD's annual corporate tax statistics publication, shows the importance of corporate tax as a source of government revenues, while also pointing to evidence of continuing base erosion and profit shifting behaviours.

The data shows that statutory corporate income tax (CIT) rates have been decreasing in almost all countries over the last two decades. Across 111 jurisdictions, 94 had lower CIT rates in 2021 compared with 2000, while 13 jurisdictions had the same tax rate, and only 4 had higher tax rates. The average combined (central and sub-central government) statutory CIT rate for all covered jurisdictions declined to 20% in 2021, compared to 28.3% in 2000. The OECD notes that the declining rates highlight the importance of Pillar Two, which will put a multilaterally agreed limit on corporate tax competition.

New country-by-country reporting data also provides aggregated information on the global tax and economic activities of around 6,000 MNE groups headquartered in 38 jurisdictions and operating across more than 100 jurisdictions worldwide.

The data also includes new indicators highlighting the use of tax incentives for research and development (R&D) investments. The indicators, which are accompanied by a new working paper, show that in 2020, among OECD countries offering tax support, R&D tax incentives decreased the effective tax rate on R&D investments by around 10 percentage points on average, compared to non-R&D investments.

Issue: 1543
Categories: News