In 2026, 46 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 57 jurisdictions indicating that CFC rules were in place in 2026, 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 111 rules in place worldwide amongst 89 IF member jurisdictions in 2026, a significant increase from the 67 jurisdictions that had implementing rules in 2019.
Regarding Action 5, 46 out of 65 IP regimes were found to be not harmful in 2026, 1 was found to be potentially harmful but not actually harmful and 1 was under review. 6 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. 11 of the regimes were abolished by 2026.
33 jurisdictions reported having mandatory disclosure rules in place in accordance with the recommendations of Action 12 in 2026.
Regarding Action 13, for the fiscal year 2026, 120 jurisdictions have laws in place requiring mandatory filing of CbCRs.
Corporate Tax Statistics 2026
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 selected BEPS measures, based on data collected by the OECD and reported in the Corporate Tax Statistics database. The information reflects the rules in place in 2026 across all members of the Inclusive Framework (IF) on base erosion and profit shifting (BEPS)1. 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.
Action 2: Hybrid mismatch arrangements
For each jurisdiction, the database reports:
whether hybrid mismatch rules are in place;
the types of hybrid financial instrument rules (e.g. denial of deduction, inclusion of income);
the existence and scope of hybrid entity rules (including reverse hybrid rules);
whether imported mismatch rules apply;
whether dual resident payer rules are implemented;
whether treaty provisions address hybrid mismatches;
whether linking rules are applied to coordinate treatment between jurisdictions;
whether branch mismatch rules are implemented (e.g. branch payee mismatch rule, deemed branch payment rule, branch double deduction rule).
Action 3: Controlled Foreign Company (CFC) Rules
For each jurisdiction, the database reports:
whether CFC rules are in place;
the definition and scope of CFC income;
whether a substantial economic activity test applies and, if so, its main characteristics;
whether any exemptions, thresholds or carve-outs apply.
Action 4: Interest Limitation Rules
For each jurisdiction, the database reports:
whether an interest limitation rule is in place;
the type of rule (e.g. fixed ratio rule, earnings stripping rule, thin capitalisation rule);
the financial ratio applied;
whether the rule applies to net or gross interest;
whether the rule applies to related-party debt, third-party debt, or both;
whether a de minimis threshold applies;
whether exclusions are available (e.g. for certain sectors or entities); whether carry-forward or carry-back provisions apply.
Action 5: Intellectual Property Regimes
Drawing on information collected by the OECD’s Forum on Harmful Tax Practices (FHTP), the database reports for each IP regime:
the name of the regime;
the qualifying IP assets;
the reduced tax rate applicable under the regime;
the status of the regime as determined by the FHTP.
The information is accurate as of January 2026. Legislative changes enacted in 2026 but effective from 2027 are not reflected.
Action 12: Mandatory disclosure rules (MDR)
For each jurisdiction, the database reports:
whether mandatory disclosure rules are in place;
the types of taxes covered (e.g. CIT, personal income tax, VAT, capital gains tax);
the persons required to report (e.g. intermediaries, taxpayers);
the categories of reportable transactions, schemes or arrangements;
the information required to be disclosed to the tax authority.
Action 13: Country-by-Country Reporting implementation
For each jurisdiction, the database reports:
the date from which mandatory headquarters filing became effective;
the consolidated group revenue threshold for filing;
the filing deadline applicable to reporting entities.
Action 2: Hybrid mismatch arrangements
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.
As of 2026, Figure 6.1 shows that 46 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.
Source: OECD Implementation of BEPS Actions 2,3,4 and 12 Survey, 2026.
Action 3: Controlled Foreign Company (CFC) Rules
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]).
Information on the presence of CFC rules is available for all Inclusive Framework member jurisdictions. Of these, Figure 6.2 shows that 57 jurisdictions indicated that CFC rules were in place in 2026, 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 36 high-income jurisdictions implementing CFC rules in 2026 compared to only 21 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.
Source: OECD Implementation of BEPS Actions 2,3,4 and 12 Survey, 2026.
Action 4: Interest Limitation Rules
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]).
Information on the presence of interest limitation rules is available for all Inclusive Framework member jurisdictions. Of these, Figure 6.3 shows that 89 jurisdictions indicated that interest limitation rules were in place in 2026. 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 111 interest limitation rules in place in 2026, the most common was thin capitalisation rules (44 jurisdictions), followed by fixed ratio rules (27 jurisdictions).
Note: 111 Interest Limitation Rules are in place in 89 jurisdictions.
Source: OECD Implementation of BEPS Actions 2,3,4 and 12 Survey, 2026.
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 45 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 (40 jurisdictions).
Action 5: Intellectual Property Regimes
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.
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 2026 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 2026 (according to the peer reviews approved by the Inclusive Framework in November 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 31 December 2026. There were eleven IP regimes listed as abolished in 2026.
The Corporate Tax Statistics database contains information on 65 IP regimes that were in place in 50 different jurisdictions in the year 2026 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 the 46 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 2026 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 2026 (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.
Action 12: Mandatory disclosure rules (MDR)
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.
In 2026, Figure 6.7 shows that 33 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.
Source: OECD Implementation of BEPS Actions 2,3,4 and 12 Survey, 2026.
Action 13: Country-by-Country Reporting implementation
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 2026, 120 jurisdictions have laws in place requiring mandatory filing of Country-by-Country Reports (CbCRs). (Figure 6.8).
Source: Action 13 Automatic exchange portal (http://www.oecd.org/en/topics/sub-issues/country-by-country-reporting-for-tax-purposes/country-specific-information-on-country-by-country-reporting-implementation.html#cbcrequirements).
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 146 IF members as of 1 January 2026.