Each year, the OECD publishes Corporate Tax Statistics, a comprehensive roundup of corporate tax trends around the world. The latest edition shares three striking findings:
- The long-running race to cut headline corporate tax rates has stabilized, but that has not ended tax competition; corporations appear to be leaning into new types of targeted tax incentives instead.
- Corporate tax revenues remain resilient and have grown for certain jurisdictions.
- Multinational firms continue to report a substantial share of their foreign profits in investment hubs.
But given the data challenges involved, it may be years before we know what aspects of ongoing international tax reform are driving these changes.
Corporate tax competition is changing
Across the jurisdictions covered by OECD data, the average statutory corporate income tax rate fell from 28 percent in 2000 to 21.5 percent in 2019 and averaged 21.2 percent across the years 2020 to 2026.
This might stem from the spread of minimum taxes. The US introduced a minimum tax on the foreign earnings of US multinationals in 2017. In 2021, more than 145 jurisdictions agreed to Pillar Two, an OECD-led framework intended to ensure that large multinational corporations face at least a 15 percent effective tax rate in each jurisdiction where they operate. Since then, many countries have adopted their own minimum taxes. If because of the framework low-taxed income ultimately faces a top-up tax—an additional tax that brings the effective rate up to the minimum—cutting the headline rate may not attract reported profits.
Instead, countries may increasingly be competing through targeted tax incentives. In the US, the tax code provides a deduction for certain foreign-derived income and a credit for advanced manufacturing investment. Ireland restructured its research and development tax credit to preserve its attractiveness to investment under global minimum tax rules, while Singapore introduced a refundable investment credit.
Pillar Two may be reinforcing this shift. Because ordinary tax incentives that reduce a firm’s effective tax rate can trigger additional top-up taxes under the global minimum tax, countries may have an incentive to favor instruments that receive more favorable treatment under global anti-base erosion rules. Qualified refundable tax credits, for example, are generally treated as income rather than reductions in covered taxes, making them less likely to be offset by Pillar Two top-up taxes.
Corporate tax revenues remain resilient despite the long decline in rates
Despite the long decline in statutory rates over the previous two decades, corporate income tax remains an important, and sometimes growing, source of revenue. The OECD reports that corporate tax revenues averaged 3.5 percent of gross domestic product (GDP) in 2023 and 17.3 percent of total tax revenues. Low-income jurisdictions collected corporate tax revenues equal to 3.1 percent of GDP in 2023, up from just 0.8 percent in 2000 and approaching the 3.6 percent average in high-income jurisdictions. Large multinational enterprises across the 60 jurisdictions supplying country-by-country reporting data accounted for an average of 44.5 percent of corporate tax revenues in 2023, up from 42.8 percent in 2017.
These gains largely predate Pillar Two, so other factors, including strong corporate profits and changes in domestic tax bases, likely explain the longer-run resilience of corporate revenues.
But there is early evidence that minimum taxes could reinforce the trend going forward. A recent OECD study estimates that the Pillar 2 global minimum tax increased effective tax rates among affected multinationals by 1 to 2 percentage points in 2024 and generated €79–109 billion ($90-$124 billion) in additional corporate tax revenue.
That is below the OECD's pre-implementation projection of $155 to $192 billion annually, although the 2024 estimate reflects only the first year of implementation. Future revenue effects may also differ as later data show effects of continually evolving rules, including the side-by-side arrangement that exempts US-headquartered multinationals from key elements of the regime.
Investment hubs continue to attract profits
Even though the average corporate rate has stabilized, companies continue to face incentives to report profits in certain jurisdictions. In 2023, investment hubs, or jurisdictions that attract large amounts of foreign investment and multinational business activity, accounted for roughly 25 percent of multinational companies' foreign profits, despite accounting for only 6 percent of employees and 15 percent of tangible assets.
Earlier OECD releases show that the concentration of profits in investment hubs has varied substantially over time: Their share fell from around 30 percent in 2020 to 18.4 percent in 2021 and 18.9 percent in 2022, before rising to 25 percent in 2023. It’s likely at least some of these shares will be updated as additional information becomes available.
The 2026 edition of these data provides new data on profit shifting, covering nearly 9,400 multinational enterprise groups in 60 jurisdictions, with more geographic detail than was previously available.
After a decade of international and US tax reforms aimed at curbing profit shifting and taxing multinational profits more consistently, the central question is whether these reforms have changed where firms report profits, invest, and pay taxes. Researchers now have better tools to answer that question: The OECD country-by-country reporting database is expanding, and the European Union requires new public firm-level disclosures.
But greater transparency should not be confused with perfect measurement. Double counting from intracompany dividends, differences in accounting and consolidation, and incomplete geographic detail will continue to complicate efforts to measure profit shifting.
The OECD’s latest statistics are therefore less a verdict on the past decade of international tax reform than a foundation for evaluating it more convincingly in the years ahead.
