The average EATR across the 105 jurisdictions covered in the database is 20.5%, which is 1.2 p.p. lower than the average STR (21.7%). The median EATR is 22.2%, which is 1.8 p.p. lower than the median STR (24.0%).
Over recent years, EATRs have remained relatively stable on average, with modest declines at the top and bottom of the distribution across countries. Average EATRs were 21.1% in 2019 and 20.5% in 2025, while median EATRs were 22.8% in 2019 and 22.2% in 2025. This may reflect the stabilisation of STRs discussed in Chapter 2, which are a key component of the EATRs.
Of the 105 jurisdictions covered for 2025, 90 provide accelerated depreciation, which results in Effective Average Tax Rate (EATRs) on investments in these jurisdictions below their statutory tax rate (STRs). Among those jurisdictions, the average reduction of the STR was 1.6 p.p. In contrast, fiscal depreciation was decelerated in 8 jurisdictions, leading to EATRs above the statutory tax rate.
Several Latin American and Caribbean (LAC) jurisdictions have 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).
Among all 105 jurisdictions, 6 jurisdictions had an allowance for corporate equity (ACE) leading to an additional reduction in their EATRs of between 0.2 to 4.5 p.p.
Disaggregating the results to the asset level shows that fiscal acceleration is strongest for investments in buildings and tangible assets. The average EATR across jurisdictions is 19.3% for buildings and 19.7% for tangible assets, lower than the average composite EATR (20.5%), which also includes acquired software and inventories. For the tangible asset category, which covers air, railroad and water transport vehicles, road transport vehicles, computer hardware, industrial machinery and equipment, most of this effect is driven by more generous tax depreciation rules for air, railroad and water transport vehicles, as well as for industrial machinery.
The average EMTR in 2025 across the 105 jurisdictions covered in the database is 20.0%, which is 0.5 p.p. lower than the average EATR (20.5%). The median EMTR is 16.6%.
In contrast to EATRs, the EMTRs have declined over recent years, with the average EMTR being 22.4% in 2019 and 20.0% in 2025.
6 jurisdictions have either decreased the generosity of their tax depreciation rules or increased their statutory corporate income tax (CIT) rates, resulting in an increase in their EMTRs in 2025 compared to 2024; the largest increases were observed in Denmark (10.2 p.p.) and Italy (10.1 p.p.).
6 jurisdictions recorded lower EMTRs in 2025, reflecting either more generous tax depreciation rules or reductions in statutory CIT rates; this group includes New Zealand (7.8 p.p.), the United States (6.6 p.p.) and Namibia (2.7 p.p.).
Corporate Tax Statistics 2026
Variations in the definition of corporate tax bases across jurisdictions can have a significant impact on the tax burden associated with a given investment. Differences in fiscal depreciation rules and other structural features of corporate tax systems mean that comparisons based solely on statutory corporate income tax (CIT) rates do not fully capture the incentives created by tax policy. To assess how tax systems affect investment decisions, it is therefore necessary to complement statutory rate analysis with measures that incorporate key elements of the tax base.
This chapter presents data on forward-looking effective tax rates (ETRs) as included in the OECD Corporate Tax Statistics database. These synthetic indicators are calculated using detailed information on tax policy parameters and model the tax treatment of a hypothetical investment; they do not rely on firms’ actual tax payments. The ETRs reported here capture the effects of fiscal depreciation rules and selected related provisions, such as allowances for corporate equity, half-year conventions and inventory valuation methods. While fiscal depreciation of certain acquired intangible assets is included, the baseline indicators do not incorporate the effects of expenditure-based R&D tax incentives or intellectual property regimes. Forward-looking ETRs reflecting the effects of R&D tax incentives on R&D investments are presented in the Chapter 5.
The Corporate Tax Statistics database contains four forward-looking tax policy indicators reflecting tax rules in 105 jurisdictions, as of 1 July, for the years 2017-2025:
the effective average tax rate (EATR);
the effective marginal tax rate (EMTR);
the cost of capital;
the net present value of capital allowances as a share of the initial investment.
All four tax policy indicators are calculated by applying jurisdiction-specific tax rules to a prospective, hypothetical investment project. Calculations are undertaken separately for investments in different asset types and sources of financing (i.e., debt and equity). Composite tax policy indicators are computed by weighting over assets and sources of finance. More disaggregated results are also reported in the Corporate Tax Statistics database. This chapter discusses results for two indicators: the EMTR and the EATR. Detailed information on the key concepts and methodology used to calculate ETRs are contained in the Corporate Tax Statistics Explanatory Annex.1
Effective average tax rates
EATRs reflect the average tax contribution a firm makes on an investment project earning above-zero economic profits. This indicator is used to analyse discrete investment decisions between two or more alternative projects (i.e. decisions along the extensive margin).
Figure 4.1 shows the composite EATR for the full database. In most jurisdictions, EATRs diverge from the statutory CIT rate; if fiscal depreciation is generous compared to true economic depreciation or if there are other significant base narrowing provisions, the EATR (and also the EMTR) will be lower than the statutory tax rate, i.e., tax depreciation is accelerated. On the other hand, if tax depreciation does not cover the full effects of true economic depreciation, it is decelerated, implying that the tax base will be larger and effective taxation higher.
To allow comparison with the statutory tax rate, the share of the EATR (in p.p.) that is due to a deceleration of the tax base is shaded in light blue in Figure 4.1; reductions of the STR due to acceleration are transparent. In addition, the reduction in the EATR due to an ACE is indicated as a dotted area.
Comparing the patterns of tax depreciation across jurisdictions shows that most jurisdictions provide some degree of acceleration, as indicated by the transparent bars. The most significant effects being observed in jurisdictions with an ACE, such as Malta, Poland, Portugal and Türkiye among others, as well as in jurisdictions with larger accelerated depreciation provisions, such as Canada, South Africa, the United Kingdom and the United States. While fewer jurisdictions have decelerating tax depreciation rules, the effect of deceleration can become large in jurisdictions where acquired software is non-depreciable (Botswana) or depreciable at a very low rate (e.g., in Argentina and to a lesser extent also in Mexico, Papua New Guinea and Peru).
Note: The values of EATRs are calculated assuming a fixed inflation rate at 1% and fixed real interest rate at 3% and setting the pre-tax rate of return from investments at 20%. Additional parameters are outlined in the Effective Tax Rate (ETR) explanatory annex accompanying Corporate Tax Statistics. https://www.oecd.org/tax/tax-policy/explanatory-annex-corporate-tax-statistics.pdf. Note additional details on the modelling of ETRs for Poland and Saudi Arabia.
Poland: The value of ACE in Poland is capped at PLN 250 000 per tax year. The presence of caps or limitations on the use of ACEs are not captured on the ETR modelling. For taxpayers for which the cap is binding, the impact on ETRs of the ACE would be lower.
Saudi Arabia: The Kingdom of Saudi Arabia imposes a corporate income tax rate of 20% on a non-Saudi’s’ share of a resident company or a non-resident’s income from a permanent establishment in Saudi Arabia or income of a company operating in the natural gas sector. A higher corporate income tax rate is imposed as well on companies operating in the oil sector (i.e., 50% or higher). The Kingdom of Saudi Arabia also levies the Zakat on companies, which is an example of a tax on both income and equity. The Zakat is levied at 2.5% on a Saudi’s share of a resident company (also applies to citizens of Gulf Cooperation Council countries with an established business in the Kingdom of Saudi Arabia), but since it is imposed on income and equity, it yields a higher rate in effective terms. The Saudi government considers the corporate Zakat as an equivalent to corporate income tax, levied on a different basis. It is also considered a covered tax for the purposes of the GloBE rules in the Pillar 2 Blueprint Report (OECD, 2020). For the calculation of the forward-looking ETRs, three different groups of taxpayers are considered: (i) foreign companies as well as domestic and foreign companies in the natural gas sector taxed at 20%, (ii) domestic and foreign companies in the hydrocarbon sector taxed at 50%, (iii) other domestic companies taxed through Zakat at 2.5%. The results for these three groups of taxpayers are weighted using the respective turnover shares as weights, i.e., 18.17% for group (i), 28.72% for group (ii) and 53.11% for group (iii). The composite EATR corresponds to the combination of the unshaded and shaded blue components of each bar.
Source: Corporate Tax Statistics Effective Tax Rates
Effective marginal tax rates
EMTRs measure the extent to which taxation increases the pre-tax rate of return required by investors to break even. This indicator is used to analyse how taxes affect the incentive to expand existing investments given a fixed location (i.e. decisions along the intensive margin).
Figure 4.2 shows the ranking based on the composite EMTR. While the effects of tax depreciation and macroeconomic parameters work in the same direction as in the case of the EATR, their impacts on the EMTR will generally be stronger because marginal projects do not earn economic profits. Consequently, jurisdictions with relatively high statutory CIT rates and relatively generous capital allowances, notably Italy, the United Kingdom and the United States, rank lower than in Figure 4.1. On the other hand, jurisdictions with less generous fiscal depreciation rules, including Argentina, Japan, Papua New Guinea and Peru (as well as Botswana, Liberia, and Czechia), are ranked higher based on the EMTR than under the EATR.
Note: The values of EMTRs are calculated assuming a fixed inflation rate at 1% and fixed real interest rate at 3% and setting the pre-tax rate of return from investments at 20%. The EMTR is computed using the tax exclusive definition. Additional parameters are outlined in the Effective Tax Rate (ETR) explanatory annex accompanying Corporate Tax Statistics. https://www.oecd.org/tax/tax-policy/explanatory-annex-corporate-tax-statistics.pdf.
Where investment projects are financed by debt, it is also possible for the EMTR to be negative, which means that the tax system, notably through interest deductibility, reduces the pre-tax rate of return required to break even and thus enables projects that would otherwise not have been economically viable pre-tax to become viable post-tax. Figure 4.2 shows that the composite EMTR, based on a weighted average between equity- and debt-financed projects, is negative in 4 out of 105 jurisdictions; this result is due to the combination of debt finance with comparatively generous tax depreciation rules. For jurisdictions with an ACE, the composite EMTR will generally be lower because of the notional interest deduction available for equity-financed projects.
Comparing EMTRs in 2025 with the previous year shows that changes in the corporate tax provisions covered in the calculations had significant effects on EMTRs in several countries. As shown by Figure 4.2 six jurisdictions have either decreased the generosity of their tax depreciation rules or increased their statutory corporate income tax (CIT) rates, resulting in an increase in their EMTRs in 2025 compared to 2024; the largest increases were observed in Denmark (10.2 p.p.) and Italy (10.1 p.p.). On the other hand, six jurisdictions recorded lower EMTRs in 2025, reflecting either more generous tax depreciation rules or reductions in statutory CIT rates; this group includes New Zealand (7.8 p.p.), the United States (6.6 p.p.) and Namibia (2.7 p.p.).
Effective tax rates by asset categories
The composite ETRs can be further disaggregated by asset categories; jurisdiction-level EATRs and EMTRs by asset categories are available in the online Corporate Tax Statistics database. Figure 4.3 summarises these data on ETRs by asset category. The upper panel provides more information on the distribution of asset-specific EATRs, comparing them to the distribution of statutory CIT rates. The first vertical line depicts information on the statutory CIT rates; it shows that the mean (i.e., the circle in the middle of the first vertical line) and the median (the light blue triangle) are around 21.7% and 24.0% respectively, while the middle 50% of jurisdictions in the distribution have statutory CIT rates between 18.0% and 27.5%.
The other four vertical lines in the upper panel of Figure 4.3 illustrate the distribution of EATRs across jurisdictions for each of the four asset categories: buildings, tangible assets, inventories and acquired software. Since there is more variation in economic and tax-related characteristics across tangible assets, this category summarises information on investments in several specific types of tangible assets, i.e., air, railroad and water transport vehicles, road transport vehicles, computer hardware, industrial machinery and equipment.
Note: The values of EMTRs and EATRs are calculated assuming a fixed inflation rate at 1% and fixed real interest rate at 3% and setting the pre-tax rate of return from investments at 20%. The EMTR is computed using the tax exclusive definition. Additional parameters are outlined in the ETR explanatory annex accompanying Corporate Tax Statistics. https://www.oecd.org/tax/tax-policy/explanatory-annex-corporate-tax-statistics.pdf.
Comparing the four broader asset categories with the statutory CIT rate shows that the distribution of EATRs is more condensed for investments in buildings, with the middle 50% of the country distribution ranging between 15.4% and 24.8%. For investments in tangible assets, the middle 50% of jurisdictions have EATRs between around 14.8% and 25.6%. However, the mean EATR (19.7%) on investments in tangible assets is around 2.0 p.p. lower than the median (21.7%), indicating that some jurisdictions have much lower EATRs on this type of investment. For investments in the other two asset categories, the distributions are similar to the statutory tax rate.
The lower panel illustrates the EMTR distribution for each of the four broader asset categories. The following insights emerge from this graph.
Investments in buildings and tangible assets benefit more often from accelerated tax depreciation than other investments; as a result, the EMTRs are generally lower.
Investments in buildings have EMTRs ranging between 2.1% and 13.8% in half of the covered jurisdictions.
Investments in inventories often benefit from lower EMTRs, compared to the statutory tax rate, although to a lesser extent than the first two asset categories.
The tax treatment of investments in acquired software is subject to more variation across jurisdictions, which is reflected in the vertical line that ranges from around 8.0% to around 40.3%.
Effective average tax rates
Between 2017 and 2025, average EATRs have tended to decline modestly. Looking at the development of the composite EATR from 2017 and 2025, the unweighted average composite EATR has declined modestly over this period (1.0 p.p.), from 21.5% in 2017 to 20.5% in 2025. The average STR has declined slightly less over the same time period (0.8 p.p.), from 22.0% in 2017 to 21.2% in 2025, implying that changes to the corporate tax base have also contributed to the reduction in EATRs as well as reductions in the headline rates.
The distribution of EATRs has shifted slightly downwards between 2017 and 2025. Figure 4.4 shows the evolution of different points of the EATR distribution over time. The median represents the EATR of the jurisdiction that lies in the middle of the distribution, 50% of jurisdictions have EATRs above this value. The 25th percentile is the value at or below which 25% of observations lie, and the 75th percentile is the value at or below which 75% of observations lie. The median EATR has decreased over the period, with a rate of 22.8% in 2017 and 22.2% in 2025, The top and bottom of the distribution have also reduced from 28.0% and 16.2% in 2017 to 26.7% and 16.1% in 2025.
Changes to the distribution of the EATR can be attributed to the decline over time in statutory CIT rates and to various base reforms. However, from 2021 to 2025 EATRs have remained largely stable with an average value of 20.5% in 2024 and 2025.
Note: The values of EATRs are calculated assuming a fixed inflation rate at 1% and fixed real interest rate at 3% and setting the pre-tax rate of return from investments at 20%. Additional parameters are outlined in the ETR explanatory annex accompanying Corporate Tax Statistics. https://www.oecd.org/tax/tax-policy/explanatory-annex-corporate-tax-statistics.pdf.
A comparison of Figure 4.4 and Figure 4.5 suggests that changes in EATRs over 2017–2025 have not been uniform across asset types or across the distribution. The aggregate pattern points to a modest decline in EATRs, particularly in the upper part of the distribution, but this masks important differences by asset category.
At the overall level, the 25th percentile shows only limited movement over time, dipping slightly around 2021 before returning close to its initial level by 2025. However, disaggregated results indicate that this relative stability is driven largely by buildings and tangible assets, where the lower end of the distribution remains broadly constant throughout the period. In contrast, intangibles and inventories exhibit more pronounced fluctuations in their lower quartiles, including a noticeable dip around 2021 followed by a recovery by 2025.
More substantial changes are visible at the top of the distribution. For the overall EATR, the 75th percentile declines steadily from 2017 to around 2022, before stabilising thereafter. This downward movement is mirrored for buildings, tangible assets, and intangibles, suggesting a gradual reduction in higher-end tax burdens across several asset types. By contrast, inventories show a less uniform pattern: although there is a drop up to 2023, values rise again towards 2025, indicating some renewed dispersion at the upper end.
The median generally follows a mild downward trajectory across both the aggregate and most asset categories, with a dip around 2021–2022 and a partial rebound afterwards. Despite these fluctuations, the overall evolution of EATRs across asset groups broadly tracks changes in statutory tax rates, with movements in the central and upper parts of the distribution being more pronounced than at the lower end. Overall, the evidence points to a gradual compression of the EATR distribution driven mainly by declines at the top, while developments at the lower end are more heterogeneous and depend on the specific asset type.
Note: The values of the EATRs are calculated assuming a fixed inflation rate at 1% and fixed real interest rate at 3% and setting the pre-tax rate of return from investments at 20%. Additional parameters are outlined in the ETR explanatory annex accompanying Corporate Tax Statistics. https://www.oecd.org/tax/tax-policy/explanatory-annex-corporate-tax-statistics.pdf.
Effective marginal tax rates
Figure 4.6 shows that the distribution of EMTRs saw a general downward trend between 2017 and 2025 with a slight increase from 2024 to 2025. The median EMTR has dropped from 18.4% in 2017 to 16.6% in 2025, while at the top and bottom of the distribution the 75th and 25th percentile dropped from 27.7% and 7.4% respectively in 2017 to 24.3% and 7.4% in 2025. The average EMTRs have fallen from 23.7% in 2017 to 20.0% in 2024, although there was an increase from 18.3% in 2022. This latter increase is mainly due to increases in the EMTR for Italy and the United Kingdom.
Note: The values of EMTRs are calculated assuming a fixed inflation rate at 1% and fixed real interest rate at 3% and setting the pre-tax rate of return from investments at 20%. The EMTR is computed using the tax exclusive definition. Additional parameters are outlined in the ETR explanatory annex accompanying Corporate Tax Statistics. https://www.oecd.org/tax/tax-policy/explanatory-annex-corporate-tax-statistics.pdf.
Figure 4.7 shows the distribution of EMTRs disaggregated by asset types and over time. The dispersion of EMTRs is particularly marked for acquired intangibles (Panel D), reflecting differences in the fiscal depreciation provisions applicable to acquired software across jurisdictions. Several jurisdictions offer very stringent depreciation rules, and in some cases acquired software is non-depreciable, which can push EMTRs towards or above statutory rates. Notably, the dispersion of EMTRs for tangible assets has tended to decline modestly over time, particularly at the upper end of the distribution.
Note: The values of EMTRs are calculated assuming a fixed inflation rate at 1% and fixed real interest rate at 3% and setting the pre-tax rate of return from investments at 20%. The EMTR is computed using the tax exclusive definition. Additional parameters are outlined in the ETR explanatory annex accompanying Corporate Tax Statistics. https://www.oecd.org/tax/tax-policy/explanatory-annex-corporate-tax-statistics.pdf.
When comparing the distribution of disaggregated EMTRs with that of EATRs, the former, as depicted in Figure 4.7, exhibits greater heterogeneity both within and between asset categories. While EATRs remain relatively clustered across assets and close to statutory tax rates, EMTRs vary substantially by asset type. The figure shows that over the period of analysis, the EMTR applicable to investments in buildings and tangible assets, is consistently well below the STR, while EMTRs on inventories are closer to statutory rates. The median EMTR for buildings remains below 10% throughout 2017–2025, and that for tangible assets declines to around or slightly below this level, compared to a median STR of around 25%. This contrast reflects that baseline CIT systems tend to provide generous fiscal depreciation for these asset types, thereby significantly reducing the cost of capital (a key element in the derivation of the EMTR) and reducing the effective tax burden on investments at the intensive margin.
Changes in the distribution of EMTRs by asset type highlight the effects of certain tax reforms. Whereas Figure 4.6 shows a drop in the average EMTR between 2020 and 2021, the disaggregated evidence indicates that this decline was neither uniform across asset groups nor within their respective distributions. Panel C suggests that part of the decrease was driven by a reduction in the tax burden on marginal investments in tangible assets, particularly for jurisdictions at the upper end of the distribution, such as Italy and the United Kingdom, where EMTRs for tangible assets fell markedly. A similarly pronounced, but more broad-based, decline is observed for acquired intangibles, with EMTRs decreasing across the distribution between 2020 and 2021. Over the same period, EMTRs applicable to inventories remained broadly stable. By contrast, the median EMTRs for buildings, intangibles and tangible assets all declined, albeit to varying extents.
← 1. The tax policy indicators are calculated for two different macroeconomic scenarios. Unless noted, the results reported in this publication refer to composite effective tax rates based on the macroeconomic scenario with 3% real interest rate and 1% inflation.