Investment tax incentives dashboard

Investment tax incentives can take different forms, including CIT exemptions and reduced CIT rates accelerated depreciation, enhanced tax allowances, tax credits.

OECD (2026) reports that income-based tax incentives, such as exemptions and reduced rates, have been found to provide more limited value for money compared to expenditure-based incentives and risk windfall gains for investors that would have invested anyways.

Expenditure-based incentives, such as tax allowances and tax credits, can provide relief proportionate to expenditure, thereby reducing the cost of new investment and increasing the likelihood of promoting additional investment. 

Income-based incentives are often permanent. Even when they are time-limited they last for many years, although some countries differ from this trend.

OECD (2026) reports that income-based tax incentives have been found to provide limited value for money and risk windfall gains for investors that would have invested anyway. Long durations of these incentives can increase revenue loss.

When income-based incentives come with additional eligibility criteria related to substance they can mimic expenditure-based incentives, which are typically considered to be more cost-effective.

Expenditure-based incentives more often target capital expenditure (e.g. investments in equipment) than current expenditure (e.g. payroll costs). While accelerated tax allowances always relate to capital expenditure, enhancements and tax credits can be linked to either expenditure type, or target both at the same time. 

OECD (2026) reports that well-designed expenditure-based incentives can provide tax relief in direct proportion to desired firm investment. They more directly reduce the cost of capital and are more likely to be effective at promoting additional investment.

In some countries, enhanced tax allowances and tax credits may not be proportional to expenditure. These types of incentives can come with similar cost-effectiveness-risks as income-based incentives (tax exemptions and reduced rates).

CIT incentives are often scattered across multiple laws and regulations rather than consolidated in one single piece of legislation, although country practices differ.

OECD (2026) reports that consolidating incentives into one law can support transparency and certainty, support better parliamentary and stakeholder scrutiny and facilitate investor access to relevant information.

Eligibility conditions are commonly used by countries to define the eligibility of a project or investor. Within the same country, some incentives may include many different eligibility conditions, while eligibility might be less complex for other incentives.

OECD (2026) reports that more targeted incentives may more strongly support policy objectives and come with lower revenue losses, but they may also increase administrative and compliance costs, create market distortions, and add complexity for investors.

Many economies use sector conditions to target tax incentives. Often, the same sector is eligible for several incentives. 

For readability, sectors are indicated at the ISIC 2 digit level, even if a given sector is only partially covered.

The ITID identifies six sustainable development (SD) areas that are frequently targeted via incentives. An incentive is classified as being linked to a specific SD area based on incentive design features, not its stated policy objectives. Relevant design features are qualifying income or expenditure, sector and outcome conditions.

For example, incentives with a requirement to maintain or create a minimum number of jobs are counted towards supporting employment and job creation; measures only applicable to export income are reflected as promoting exports, etc.