Tax Policy Reforms 2026: OECD and Selected Partner Economies, summarises and compares tax reforms across countries. The report documents tax policy changes and highlights trends in country tax policy. This year’s edition covers tax reforms introduced or announced during the 2025 calendar year in 92 jurisdictions, including all OECD countries.
As previous editions of this report have shown, the economic shocks of COVID-19 and the 2022–23 energy crisis triggered a set of common policy responses across countries. By 2025, however, policy objectives had become more diverse, reflecting significant differences in domestic conditions, fiscal space and policy priorities. In a number of cases, countries made small adjustments to their tax systems, especially if they had already introduced more substantial changes in 2023 and 2024. Others prioritised growth through targeted incentives and introduced few, if any, broad-based tax increases. At the same time, many countries took opportunities to raise revenue through tax increases on targeted or relatively narrow bases including through sectoral corporate taxes (such as surtaxes) or excise taxes on tobacco products. It is important to note that while the recent sharp rise in energy prices in 2026, linked to the Middle East conflict, has already triggered significant tax policy responses across countries, these measures are not analysed in this edition of the report, which is focused on reforms that took place in 2025.
Inflationary pressures eased in 2025, and cost-of-living concerns receded relative to prior years, even if price pressures had not fully gone away in all economies. At the same time, the fiscal legacy of the pandemic and the energy price shock continued to weigh on public finances. Public debt remained above pre-pandemic levels in most countries, and higher interest rates increased debt-servicing costs in many OECD economies. Against this backdrop, tax policy in 2025 was shaped by two broad objectives: supporting growth and investment while responding to mounting budgetary pressures. Overall, however, revenue-raising measures remained relatively limited in scope.
Revenue-raising personal income tax (PIT) measures in 2025 were often progressive, including higher top rates and reforms to the taxation of capital income. Additionally, many countries continued to introduce base-narrowing reforms in response to higher price levels and aimed at supporting low- and middle-income households, albeit less so than in previous years. Additionally, a significant number of base narrowing measures in 2025 focused on attracting high-skilled labour, wealthy individuals and nationals living abroad. There was also a noticeable increase in the prevalence of reforms lowering taxes on self-employment income. Meanwhile, social security contribution (SSC) reforms showed a sustained trend toward base broadening and rate increases, likely in response to longer-term demographic pressures and the financing needs of social protection systems. The revenue data suggest that past measures may already be becoming visible, with SSC revenues increasing in most countries with available data for 2024, although it remains too early to fully assess the impact of these reforms.
Revenue mobilisation and efforts to stimulate growth and investment remained the main stated objectives of CIT reform. For the third consecutive year, the average combined corporate income tax (CIT) rate remained stable. While a similar number of jurisdictions raised and reduced their CIT rates in 2025, the increases tended to be larger than the decreases. At the same time, countries continued to narrow the CIT base through targeted measures designed to support investment, especially in research & development, emerging technologies and strategically important sectors.
Another notable development, continuing a recent trend, was the introduction or expansion of targeted and sector-specific taxes on corporate income, often to raise revenue for the general budget in response to higher public expenditure, including defence spending. A growing number of countries in recent years, including in 2025, have increased taxes on banks and financial institutions, often focusing on excess profits. Additionally, some countries also levied similar taxes on other sectors deemed highly profitable. These measures were often temporary and took the form of additional taxes levied on specific types of corporate income, or surtaxes, levied on the tax liability of certain companies or sectors.
Reforms linked to the digitalisation of the economy were among the most significant VAT changes in 2025. In a trend continuing from prior years, more jurisdictions extended value added tax (VAT) collection obligations for non-resident suppliers and online platforms. Other changes to VAT systems in 2025 consisted of jurisdictions moving certain goods and services in and out of reduced rate bands or changing the reduced rates themselves. In some cases, countries consolidated their reduced VAT rates to simplify the system, better target relief and, in some cases, raise additional revenue. In contrast to a trend seen in recent years, some countries also scaled back VAT measures previously introduced to support the low-carbon transition, while increasing VAT on goods considered harmful to health or the environment.
Health-related tax increases were one of the most common tax-increasing reform measures introduced in 2025. A notable trend is that tobacco tax reforms have increasingly focused on broadening the tax base to new tobacco and nicotine products. A number of countries also increased their alcohol taxes. Additionally, SSB tax reforms, which are generally not as frequent, were more common in 2025 than in previous years.
Reforms to environmentally related taxes in 2025 reflected a continued balancing of environmental objectives, competitiveness and affordability pressures, and revenue needs. Several countries increased carbon tax rates or broadened existing carbon pricing measures. At the same time, countries also cut taxes on fuel and electricity. In the transport sector, reforms generally maintained a relative tax advantage for low-emission and EVs, although this advantage continued to narrow in some jurisdictions as governments adapted tax systems to technological changes and revenue pressures.
Property tax reforms remained less frequent than reforms in other tax areas, but in 2025 they were more clearly oriented towards revenue mobilisation than in previous years, especially through recurrent taxes on immovable property. At the same time, governments continued to introduce targeted relief measures to support households and housing affordability in the context of high property prices and rental costs in many economies. As in previous years, reforms were concentrated in recurrent taxes on immovable property, property transaction taxes, and inheritance, estate and gift taxes, while changes to net wealth taxes remained relatively limited.