Investment tax incentives dashboard

CIT provisions are included in the ITID if they provide a favourable and targeted deviation from the standard tax treatment in an economy resulting in reduced or postponed tax liability with the objective of promoting investment.

The ITID covers investment tax incentives administered through the corporate income tax system at the central government level, sourced from primary or secondary legislation. It excludes subnational incentives, those provided on discretionary basis (e.g. through arrangements between governments and individual investors) and incentives delivered through other tax types (e.g. VAT, withholding taxes, capital gains taxes, royalties). The ITID covers incentives available to firms of all sizes or specifically targeted at large investors, i.e. it excludes SME-specific incentives.

The data collection focuses on five main tax incentive types, tax exemptions, reduced rates, accelerated tax allowances, enhanced tax allowances and tax credits, targeted at tangible investment (such as machinery, equipment, buildings or other structures) and at current expenditure. Intangible assets (R&D, IP assets) are covered where relevant but are not the focus. Incentives benefiting government bodies, international organisations, non-profits, generally tax-exempt organisations, cultural organisations, hospitals, financial services, or real estate are out of scope.

The ITID is updated every other year: 2022, 2024, 2026.  This dashboard includes the 2024 and 2022 vintage of the ITID.  The 2024 vintage covers 71 - mostly developing and emerging - economies across Europe and Central Asia, Latin America and the Caribbean, the Middle East and North Africa, South and East Asia, and Sub-Saharan Africa. The 2022 vintage covers a subset of 52 economies. 

Notes: Countries denoted with an asterisk (*) have reviewed the underlying data (i.e. 31 out of 71 countries).

Legal instruments refer to the legal source which provides the provision(s) introducing and governing an incentive. Legal instruments can take the form of primary law (e.g. Tax Law, Investment Law, Incentives Law, Economic Zones Law) or secondary legislation (e.g. regulations, decrees, statutory instruments, orders). Typically, primary legislation are laws that are passed by the Parliament. Primary legislation can also grant law-making powers to other bodies, such as ministries or implementing agencies, enabling them to issue more detailed rules. This is known as secondary legislation, which typically takes the form of regulations, orders, decrees, or statutory instruments. Some incentives are governed by multiple legal instruments. For example, the Tax Law defines the tax instrument and duration of the benefit, while a regulation details sectorial eligibility.

The ITID uses overarching categories for labeling legislation to enable cross-country comparability. The exact names of incentive-governing legal instruments may vary by country. For instance, the category “Tax Law” summarises a range of country-specific tax laws that might be referred to as income tax law, income tax act, tax code, profit tax act, etc in national legislation.

In some countries, primary law can be amended via secondary legislation. If this applies to incentive-introducing provisions, the database methodology considers the primary law as its legal instrument.

Eligibility conditions describe a set of criteria that investors or investment projects must meet to benefit from a tax incentive. Eligibility may touch upon a variety of areas. In some cases multiple eligibility conditions may apply at the same time.

The ITID classifies the following most commonly used conditions:

• Sectors: Specific sectors or sub-sectors that are eligible or not eligible to receive preferential tax treatment.
• Outcome: Requirements for the investor to achieve a certain outcome through the project benefiting from an incentive (ex-post criterion), such as creating a certain number of new jobs, exporting a minimum share of sales, improving specific environmental outcomes, increasing production volumes by a certain share or training a minimum number of people.
• Geographic Region: Cities, regions, and other geographical area groupings (e.g. less developed regions, coastal regions) that receive preferential tax treatment.
• Special Economic Zone: Clearly demarcated geographical areas within which business activity is subject to a different regulatory regime from that prevailing in the rest of the economy, often including tax (e.g. CIT, value added tax and customs duty relief) and non-tax incentives (e.g. provision of infrastructure, simplified administrative procedures).
• Investment size: Requirement for a business or project to invest a minimum amount of money (e.g. in fixed assets) or operate with a minimum number of employees
• Ownership: Requirements to the ownership or corporate structure of a business, such as being a cooperative, a publicly listed business, meeting minimum shareholding thresholds (e.g. minimum holding periods) or relating to capital origin (e.g. minimum domestic or foreign ownership)
• New business: Requirement for a business to be newly established.

Sectors can be targeted through a positive list approach (listing all available business activities eligible for the incentive), a negative list approach (listing all business activities not eligible for the incentive) or a combination of both (e.g. an incentive available for manufacturing, except manufacturing of motor vehicles). 

The ITID sector classification corresponds to the United Nation’s International Standard Industrial Classification of All Economic Activities (ISIC), Rev.4, 2008, and follows the ISIC division-group level aggregation, where divisions (2-digit codes) are clustered into ranges.

The ITID identifies if certain incentive design features (i.e. qualifying expenditure or income, sector and outcome conditions) promote one of the following six SD areas:

• Employment and job creation: tax incentives to support existing employment and the creation of additional jobs.
• Environmental impact: tax incentives that promote renewable energy and energy efficiency, protecting environmental quality and improving environmental outcomes.
• Job quality and skills: tax incentives related to employment conditions and promoting skills development through apprenticeships, education and training opportunities.
• Local linkages: tax incentives to foster linkages with local suppliers, including SMEs, to enhance their potential for Global Value Chain (GVC) upgrading and knowledge spillovers.
• Promoting exports: tax incentives that promote exports to enable productivity growth through participation and access to foreign markets.
• Social inclusion and gender equality: tax incentives to support effective participation of women in the workplace and inclusion of employees with disabilities.

An incentive is classified as being linked to a specific SD area based on incentive design features, not its stated policy objectives.

These areas build on the clusters identified in the OECD FDI Qualities Indicators (OECD, 2022) and the FDI Qualities policy toolkit (OECD, 2022). The ITID does not consider whether or not a law states to promote these policy goals but considers design features only. 

This workstream is made possible through the generous support of Switzerland, the principal donor, together with valuable contributions from other donors