Forty-five jurisdictions reported having adopted measures consistent with Action 2 regarding recommendations to neutralise the effects of hybrid mismatch arrangements.
Regarding Action 3, the use of Controlled Foreign Corporation (CFC) rules has increased, with 56 jurisdictions indicating that CFC rules were in place in 2025, an increase from the number in 2019 where 49 jurisdictions had such rules in place.
Regarding Action 4, the use of Interest Limitation Rules (ILRs) has seen more substantial growth, with 106 rules in place worldwide amongst IF members, a significant increase from the 67 rules in place across jurisdictions in 2019.
Regarding Action 5, forty-six IP regimes were found to be not harmful, one was found to be potentially harmful but not actually harmful and one was under review. Six regimes were in the process of being amended or eliminated since they were not compliant with the base erosion and profit shifting (BEPS) Action 5 minimum standard. Eleven regimes were abolished by 2025.
Of the 46 non-harmful intellectual property (IP) regimes, all 46 offer benefits to patents, 34 offer benefits to copyrighted software and 20 offer benefits to the third allowed category of assets that are restricted to small and medium-sized enterprises (SMEs).
Tax rate reductions for the 46 non-harmful IP regimes range from a full exemption from tax to a reduction of about 40% of the standard tax rate.
Five of the six regimes that are in the process of being amended or eliminated offer a full exemption from taxation for IP income.
Thirty-one jurisdictions reported having mandatory disclosure rules in place in accordance with the recommendations of Action 12.
Regarding Action 13, for the fiscal year 2022, 106 jurisdictions have laws in place requiring mandatory filing of CbCRs.
Corporate Tax Statistics 2025
The OECD/G20 BEPS Project was designed to address tax avoidance and double non-taxation of multinational enterprise (MNE) profits by closing gaps that had emerged in the international tax system in the wake of globalisation. The 15 actions of which four are “minimum standards” are designed to equip governments with domestic and international rules and instruments to address tax avoidance, ensuring that profits are taxed where economic activities generating the profits are performed and where value is created.
This chapter contains information on the implementation of six different BEPS Actions worldwide. The Inclusive Framework is moving forward with the implementation of the BEPS minimum standards and continues to peer review the progress of each Inclusive Framework member.
The 2015 BEPS Action 2 Final report (OECD, 2015[1]) and the Branch Mismatch Arrangements Report (OECD, 2017[2]) sets out recommendations to neutralise the effects of hybrid mismatch arrangements that exploit differences in the tax treatment of instruments or entities between jurisdictions. Such arrangements can result in double non-taxation, double deductions or long-term deferral of tax. The Action recommends changes to domestic law and treaty provisions to ensure that payments are either included in the taxable income of the recipient or denied as a deduction to the payer. Recommendations in the branch report aimed to neutralise mismatches arising from differences in the way the branch and head office account for a payment made by or to the branch.
The OECD gathers information on progress related to the implementation of Action 2, namely, whether a jurisdiction has hybrid mismatch arrangements in place and, if so, the types of measures in place in the jurisdiction including:
hybrid financial instrument rules (denial of deduction or inclusion of income where mismatch arises);
hybrid entity rules (addressing payments by or to hybrid entities, including reverse hybrids);
imported mismatch rules (neutralising mismatches whose effect is imported into a third jurisdiction);
dual resident payer rules (denying duplicate deductions where an entity is resident in more than one jurisdiction);
treaty changes to ensure that benefits are only available where income is fully taxed in at least one jurisdiction;
linking rules that coordinate the tax treatment in the payer and payee jurisdictions;
branch recommendations (e.g. branch payee mismatch rule, deemed branch payment rule, branch double deduction rule).
This information is presented in the Corporate Tax Statistics database and pertains to the rules in place in 2025.
Source: OECD Implementation of BEPS Actions 2,3,4 and 12 Survey, 2025.
As of 2025, Figure 6.1 shows that 45 jurisdictions reported having adopted measures consistent with this Action. These measures range from comprehensive hybrid mismatch rules aligned with the OECD recommendations to more targeted provisions dealing with specific types of hybrid instruments or entities. Twenty-two of these jurisdictions reported that they adopted these measures from 2019 or later reflecting the continuing efforts of Inclusive Framework members to close the gaps in their international tax rules arising from hybrid mismatches.
The 2015 BEPS Action 3 report sets out recommended approaches to the development of controlled foreign company (CFC) rules to ensure the taxation of certain categories of MNE income in the jurisdiction of the parent company in order to counter certain offshore structures that result in no or indefinite deferral of taxation. Comprehensive and effective CFC rules have the effect of reducing the incentive to shift profits from the residence jurisdiction into a low-tax jurisdiction (Clifford, 2019[3]).
The OECD gathers information on progress related to the implementation of Action 3, namely:
whether a jurisdiction has CFC rules in place;
the definition of CFC income;
whether CFC rules include a substantial economic activity test and, if so, the nature of the test;
whether any exceptions apply.
This information is presented in the Corporate Tax Statistics database and pertains to the rules in place in 2025.
Source: OECD Implementation of BEPS Actions 2,3,4 and 12 Survey, 2025.
Information on the presence of CFC rules is available for all Inclusive Framework member jurisdictions1. Of these, Figure 6.2 shows that 56 jurisdictions indicated that CFC rules were in place in 2025, an increase from the number in 2019 where 49 jurisdictions had these rules in place (OECD, 2020[4]). Implementation of CFC rules is more common in developed countries than in developing countries, with 34 high-income jurisdictions implementing CFC rules in 2025 compared to only 17 middle- and lower-income peers. Indeed, many jurisdictions may not have a strong need to implement CFC rules as they may not be the UPE jurisdiction of a large number of MNEs.
In general, a CFC is defined as a foreign company that is either directly or indirectly controlled by a resident taxpayer. Jurisdictions apply a variety of criteria to determine control. Some approaches make reference to voting rights held by resident taxpayers or to shareholder value held by resident taxpayers. Others stipulate that a foreign company is a CFC if it carries out its operations in a low-tax jurisdiction. Others base CFC designation on a taxation test (i.e., if the foreign company does not pay tax in its jurisdiction of residence). Jurisdictions also vary in their definitions of CFC income, with some applying CFC rules to any type of income while others apply them to only passive income (i.e., income from interest, rental property, dividends, royalties or capital gains). Many countries with CFC rules that also apply to active income include an exception for active business operations.
The OECD/G20 BEPS project identified the deductibility of interest expense as an important area of attention. In particular, profit shifting can arise from arrangements using third party debt (e.g., where one entity or jurisdiction bears an excessive proportion of the group’s total net third party interest expense) and intragroup debt (e.g., where a group uses intragroup interest expense to shift taxable income from high tax to low tax countries).
In response, the 2015 BEPS Action 4 report focused on the use of all types of debt giving rise to excessive interest expense or used to finance the production of exempt or deferred income. In particular, the Action 4 final report established rules that linked an entity’s net interest deductions to its level of economic activity within the jurisdiction, measured using taxable earnings before interest income, tax, depreciation and amortisation (EBITDA) (OECD, 2015[5]). This included three main elements:
A fixed ratio rule based on a benchmark net interest/EBITDA ratio;
A group ratio rule allowing an entity to deduct more interest expense based on the position of its worldwide group; and
Targeted rules to address specific risks not addressed by the general rule.
Further work on two aspects of the approach outlined in the Action 4 report was completed in 2017 (OECD, 2016[6]). The first addressed key elements of the design and operation of the group ratio rule, focusing on the calculation of net third party interest expense, the calculation of group-EBITDA and approaches to address the impact of entities with negative EBITDA. The second identified features of the banking and insurance sectors which can constrain the ability of groups to engage in BEPS involving interest, together with limits on these constraints, and approaches to deal with risks posed by entities in these sectors.
The OECD gathers information on progress related to the implementation of Action 4, namely, whether a jurisdiction has an interest limitation rule in place and, if so, the main design features of the rule. Design features include:
the type of rule (e.g., fixed ratio, thin capitalisation, earnings stripping),
the financial ratio referenced,
whether the rule is applicable to net or gross interest,
whether the rule is applicable to related party debt and/or third party debt,
whether a de minimis threshold is present,
whether any exclusions apply, and
whether any loss carry-back or carry-forward provisions apply.
This information is presented in this edition of Corporate Tax Statistics and pertains to the rules in place in 2025.
Note: 106 Interest Limitation Rules are in place in 87 jurisdictions.
Source: OECD Implementation of BEPS Actions 2,3,4 and 12 Survey, 2025.
Information on the presence of interest limitation rules is available for all Inclusive Framework member jurisdictions. Of these, Figure 6.3 shows that 87 jurisdictions indicated that interest limitation rules were in place in 2025. This is a substantial increase from the 67 jurisdictions reporting rules in place for 2019. Interest limitation rules have a variety of forms, as discussed in (OECD, 2016[6]). Of the 106 interest limitation rules in place in 2025, the most common was thin capitalisation rules (45 jurisdictions), followed by fixed ratio rules (29 jurisdictions).
Thin capitalisation rules disallow the tax deductibility of intra-firm interest payments if the size of these expenses exceeds a threshold, where the threshold is based on debt-to-equity or debt-to-assets ratios. Thin capitalisation rules most commonly reference a debt-to-equity ratio (though a debt-to-assets ratio is used in some jurisdictions), where the ratio values range from 0.3:1 in Brazil (i.e., interest payments are fully deductible only if the indebtedness of the Brazilian borrowing does not exceed 30% of the borrower’s net equity) to 6:1 for banks and insurance companies in the Czech Republic, with ratios of 2:1, 3:1 and 4:1 being most common.
Earnings stripping rules restrict tax deductibility if the ratio of interest to EBITDA exceeds a certain threshold. A financial ratio rule based on interest to EBITDA is known as a fixed ratio rule, and is the approach recommended in the Action 4 report. While OECD guidance recommends the use of EBITDA in the denominator, it also allows for the flexibility to introduce rules based on earnings before interest and taxes (EBIT). There may also be interest limitation rules that make reference to other ratios, such as Denmark’s rule that applies the ratio of interest to the tax value of total assets. Among the 48 jurisdictions reporting earnings stripping or fixed ratio rules, the most commonly referenced ratio was interest-to-EBITDA (43 jurisdictions), with ratio values ranging from 20% to 30%, with 30% being the most common ratio (42 jurisdictions).
The Corporate Tax Statistics database also includes information on IP regimes. Many jurisdictions have implemented IP regimes, which allow income from the exploitation of certain IP assets to be taxed at a lower rate than the standard statutory corporate income tax rate (STR).
IP regimes may be used by governments to support research and development (R&D) activities in their jurisdiction. In the past, IP regimes may have been designed in a manner that incentivised firms to locate IP assets in a jurisdiction regardless of where the underlying R&D activities were undertaken. However, the nexus approach of the BEPS Action 5 minimum standard now requires that tax benefits for IP income are conditional on the extent to which a taxpayer has undertaken the R&D activities that produced the IP asset in the jurisdiction providing the tax benefits.
The information reported for each IP regime in the Corporate Tax Statistics database is:
the name of the regime;
the qualifying IP assets;
the reduced rate that applies under the IP regime;
the status of the IP regime as determined by the OECD’s Forum on Harmful Tax Practices (FHTP).
The Corporate Tax Statistics database draws on the detailed information collected by the FHTP for its peer reviews of preferential tax regimes. The information and the status presented are correct as of January 2025. Changes to regimes that have been legislated in 2025 but are not effective until 2026 are not reflected in this edition of the database.
What qualifies as an intellectual property regime?
IP regimes can be regimes that exclusively provide benefits to income from IP, but some regimes categorised as IP regimes are “dual category” regimes. These regimes also provide benefits to income from other geographically mobile activities or to a wide range of activities and do not necessarily exclude income from IP.
The Corporate Tax Statistics database shows information both on regimes that narrowly target IP income and on regimes that offer reduced rates to IP income and other types of income. Of the 65 IP regimes contained in the database, 36 were reviewed by the FHTP as IP regimes only and 29 were reviewed as “dual category” regimes (IP and non-IP regimes).
Status of intellectual property regimes
On the basis of the features of the regime, IP regimes are found to be either: harmful (because they do not meet the nexus approach), not harmful (when the regime does meet the nexus approach and other factors in the review process), potentially harmful (when the regime does not meet the nexus approach and/or other factors in the review process, but an assessment of the economic effects has not yet taken place), or potentially harmful but not actually harmful (when the regime does not meet the nexus approach and/or other factors in the review process, but an assessment of the economic effects has taken place). Regimes may also be in the process of being amended or eliminated (when the regime may not meet the nexus approach and/or other factors in the review process and is being modified or abolished as a result). The peer review process is ongoing, and by 2025 the vast majority of regimes were fully aligned with the Action 5 minimum standard. These are listed with the status “not harmful” or “amended (not harmful)”. Regimes that were already closed to new entrants in 2025 (according to the peer reviews approved by the Inclusive Framework in January 2025) were listed as “abolished” in the database, although continuing benefits may be offered for a defined period of time to companies already benefiting from the regime. In most cases, this grandfathering would end by 31December 2025. There were eleven IP regimes listed as abolished in 2025.
The Corporate Tax Statistics database contains information on 65 IP regimes that were in place in 50 different jurisdictions in the year 2025 as shown in Figure 6.4. Forty-six regimes in total were found to be not harmful; 26 of these regimes were found to be not harmful after having been amended to align with the Action 5 minimum standard. One regime was found to be potentially harmful but not actually harmful (in Brunei Darussalam). Six regimes are in the process of being amended or eliminated.
Source: OECD Forum on Harmful Tax Practices
Qualifying assets and reduced tax rates
In the Corporate Tax Statistics database, qualifying assets of IP regimes are grouped into three main categories: patents, software and Category 3. These correspond to the only three categories of assets that may qualify for benefits under the Action 5 minimum standard: 1) patents defined broadly; 2) copyrighted software; and 3) in certain circumstances and only for SMEs, other IP assets that are non-obvious, useful and novel. The Action 5 Report explicitly excludes income from marketing related intangibles (such as trademarks) from benefiting from a tax preference. If a regime does not meet the Action 5 minimum standard, then the assets qualifying for the regime may not fall into the three allowed categories.
Of the 46 regimes found to be not harmful, all 46 regimes cover patents, 34 cover software, and 20 regimes cover assets in the third category (Category 3). All six regimes that are in the process of being eliminated or amended do not have any restrictions on the type of income that qualifies for a reduced rate, although other restrictions may apply, (e.g. to certain industries). The reduction in the rate on IP income varies among the regimes, and some regimes offer different rates depending, for example, on the type of income (e.g., royalties or capital gains income) or size of the company.
Among the 46 regimes found to be not harmful, the tax benefit offered ranges from a full exemption to a reduction of about 40% of the tax rate that would have otherwise applied. The most common reduction is a 50% reduction. The reduced rates range from 0% (in 18 jurisdictions) to 18.75% (Korea’s Special taxation for transfer, acquisition, etc. of technology; this IP regime offers reduced rates ranging from 5% to 18.75%). Five of the six regimes that are in the process of being amended or eliminated offer a full exemption from taxation for IP income.
For each of the46 non-harmful IP regimes, Figure 6.5 and Figure 6.6 show the lowest reduced rate offered under the regime and the tax rate that would otherwise apply. Figure 6.5 shows those regimes with the status non-harmful, while Figure 6.6 shows the regimes that have been amended to be non-harmful. The tax rate that would otherwise apply is typically the STR, but it may not include certain surtaxes or sub-central government taxes. Similar to the reduced rate, the tax rate that would otherwise apply may also fall into a range, for example, if the standard statutory rate depends on the level of profits. Therefore, the tax rates shown in the figures are illustrative and do not detail the full range of tax reductions offered in each IP regime.
Source: OECD Forum on Harmful Tax Practices
Note: IP income in Switzerland can benefit from a 90% exemption of qualifying IP income from cantonal taxation. However, this exemption is subject to a cap: only 70% of a firm’s total profits (IP or non-IP) can be exempt. The canton of Zurich is chosen as the representative canton. The 8.11% in 2025 applies to qualifying IP income and assumes that the firm has sufficient other income (non-qualifying IP or non-IP income) that is taxed at higher rates so that it is not subject to the 70% maximum relief limitation. If the firm had enough qualifying IP income that the 70% maximum relief limitation did apply, the rate applied to IP income in the city of Zurich would increase steadily from 8.11% to 11.37% in 2025 (100% IP Income).
Where multiple rates are available for royalties or capital gains, the rate applicable to royalties has been used.
Source: OECD Forum on Harmful Tax Practices
Note: Where multiple rates are available for royalties or capital gains, the rate applicable to royalties has been used.
The 2015 BEPS Action 12 report (OECD, 2015[7]) identified the lack of timely, comprehensive and relevant information on aggressive tax planning strategies as one of the main challenges faced by tax authorities worldwide. The report recommended the design of rules requiring taxpayers and/or advisers to disclose aggressive tax planning arrangements. These mandatory disclosure rules (MDRs) are intended to provide tax administrations with early information about such schemes, enabling them to respond more rapidly to emerging risks and target resources more effectively.
The OECD gathers information on progress related to the implementation of Action 12, namely, whether a jurisdiction has MDRs in place and, if so, the main details of the rules including:
the types of taxes covered (e.g. CIT, personal income tax, capital gains tax, VAT);
the parties obliged to report;
the reportable transactions, schemes or arrangements under the MDR;
the information that must be disclosed to the tax authorities under the MDR.
This information is presented in the Corporate Tax Statistics database and pertains to the rules in place in 2025.
Source: OECD Implementation of BEPS Actions 2,3,4 and 12 Survey, 2025.
In 2025, Figure 6.7 shows that 31 jurisdictions reported having mandatory disclosure regimes in place with the majority located in the European Union. These regimes vary in scope and design but generally require disclosure of arrangements meeting certain hallmarks of tax risk.
BEPS Action 13 is part of the transparency pillar of the OECD/G20 BEPS project. In many cases, jurisdictions already have rules in place to deal with BEPS risks posed by MNE groups but may not previously have had access to information to identify cases where these risks arise. BEPS Action 13 helps to address this by providing new information for use by tax administrations in high-level transfer pricing risk assessment and the assessment of other BEPS-related risks.
For the fiscal year 2022, 106 jurisdictions have laws in place requiring mandatory filing of Country-by-Country Reports (CbCRs). (Figure 6.8).
Feedback from tax administrations indicates that they are using CbCRs to combat BEPS, in combination with other tools: (i) to help identify MNE groups for possible audit, (ii) to help identify MNE groups that do not need to be audited (de-selection), and (iii) to help plan audits or other enquiries. The specific approaches adopted vary depending upon each tax administration’s general approach to risk assessment. Two important points to note on the role of CbCRs include:
CbCRs may only be used in a high-level risk assessment of an MNE. CbCRs may not be used as evidence that BEPS exists or as a substitute for substantive enquiries and should be used alongside other information available to tax administrations. It is unlikely that success in particular cases will be able to be attributed to CbCRs specifically.
There may be a significant time delay between a CbCR being filed and the outcomes of a transfer pricing audit. CbCRs may be used for the purposes of a high-level risk assessment and in planning a tax audit, but it will only be determined whether an MNE group is in fact engaged in BEPS once further enquiries are completed, which may take a number of years.
While CbCRs are an important tool, tax administrations are using them in concert with a range of other tools in their efforts to combat BEPS. The OECD has developed several tools to support tax administrations in using CbCRs and, in particular, in undertaking multilateral activity to risk assess MNE groups. These include regular CbCR risk assessment workshops; the CbCR Tax Risk Evaluation and Assessment Tool (TREAT) for tax administrations; a Tax Risk Assessment Questionnaire (TRAQ), which is used in the International Compliance Assurance Programme (ICAP) provided by a tax administration to an MNE group with an invitation to explain key indicators of possible risk; and the CbCR Effective Risk Assessment Handbook, released in 2017.
The number of jurisdictions providing aggregated and anonymised CbCR statistics has increased yearly since their introduction in 2016. Figure 6.9 shows that the total number of jurisdictions that could potentially provide CbCR statistics to the OECD increased from 58 in 2016 to 106 in 2022. This total is calculated as the number of jurisdictions that have implemented mandatory CbCR filing along with those that accepted voluntary filing in the specific year. For example, in 2016, 49 jurisdictions implemented mandatory filing while a further 9 accepted voluntary filing. The number of jurisdictions that provided CbCR statistics increased from 26 to 53 over the same period. Despite the large increase in the number of jurisdictions that could potentially submit CbCR statistics, the number of jurisdictions that did not provide CbCR statistics to the OECD has only increased from 32 to 48 with an additional five jurisdictions reporting that they have received zero CbCRs in 2022. Many jurisdictions receive too few CbCRs to be able to provide the statistics under their confidentiality standards.
Source: Action 13 Automatic exchange portal (https://oe.cd/3Kj).
Source: Anonymised and aggregated CbCR statistics and OECD Country-by-Country Reporting Requirements.
References
[3] Clifford, S. (2019), “Taxing multinationals beyond borders: Financial and locational responses to CFC rules”, Journal of Public Economics, Vol. 173, pp. 44-71, https://doi.org/10.1016/j.jpubeco.2019.01.010.
[4] OECD (2020), Corporate Tax Statistics, Second Edition, OECD Publishing, Paris, https://doi.org/10.1787/ff4d4ce8-en.
[2] OECD (2017), Neutralising the Effects of Branch Mismatch Arrangements, Action 2: Inclusive Framework on BEPS, OECD/G20 Base Erosion and Profit Shifting Project, OECD Publishing, Paris, https://doi.org/10.1787/9789264278790-en.
[6] OECD (2016), Limiting Base Erosion Involving Interest Deductions and Other Financial Payments, Action 4 - 2016 Update: Inclusive Framework on BEPS, OECD/G20 Base Erosion and Profit Shifting Project, OECD Publishing, Paris, https://doi.org/10.1787/9789264268333-en.
[5] OECD (2015), Limiting Base Erosion Involving Interest Deductions and Other Financial Payments, Action 4 - 2015 Final Report, OECD/G20 Base Erosion and Profit Shifting Project, OECD Publishing, Paris, https://doi.org/10.1787/9789264241176-en.
[7] OECD (2015), Mandatory Disclosure Rules, Action 12 - 2015 Final Report, OECD/G20 Base Erosion and Profit Shifting Project, OECD Publishing, Paris, https://doi.org/10.1787/9789264241442-en.
[1] OECD (2015), Neutralising the Effects of Hybrid Mismatch Arrangements, Action 2 - 2015 Final Report, OECD/G20 Base Erosion and Profit Shifting Project, OECD Publishing, Paris, https://doi.org/10.1787/9789264241138-en.
← 1. Covers all 145 IF members as of 1January 2025.