## Corporate Tax Rates: How Low Can You Go

_IMF Blog, July 15, 2019_

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**Canonical URL:** [Corporate Tax Rates: How Low Can You Go](https://www.imf.org/en/blogs/articles/2019/07/15/corporate-tax-rates-how-low-can-you-go)

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- [Markdown version](/en/blogs/articles/2019/07/15/corporate-tax-rates-how-low-can-you-go/index.md)
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## Bibliographic details
- Authors: The Editors
- Published: July 15, 2019

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### Summary
- Over the past 30 years, corporate tax rates in all countries have fallen to very low levels.
- The trend toward lower corporate tax rates, combined with profit-shifting by large multinational corporations, undermines tax revenue and public confidence in tax fairness.
- A fundamental rethink of international corporate taxation is urgent to address these problems and to protect the revenue base of low-income countries.

### Problems identified
- Ease of tax avoidance by multinationals undermines both tax revenue and faith in the fairness of the overall tax system.
- The existing international corporate tax architecture is described as "fundamentally out of date."
- Advanced economies have historically shaped international corporate tax rules without sufficient consideration for their effects on low-income countries.

### Impact on low-income and non-OECD countries
- The current situation is especially harmful to low-income countries, depriving them of revenue needed to:
  - achieve higher economic growth,
  - reduce poverty,
  - meet the 2030 Sustainable Development Goals.
- IMF analysis shows non-OECD countries lose about $200 billion in revenue per year, or about 1.3 percent of GDP, due to companies shifting profits to low-tax locations.

### IMF analysis and criteria for reform
- New IMF research analyzes options for reform in the context of three key criteria:
  - better addressing profit-shifting and tax competition;
  - overcoming the legal and administrative obstacles to reform;
  - ensuring full recognition of the interests of emerging and developing countries.
- Large changes are now being considered; rethinking the existing system and addressing root causes could allow all countries, including low-income nations, to benefit.

### Policy direction and cooperation
- Effective reform requires countries to work together.
- Progress needs cooperation among all countries toward a lasting, efficient, and fair approach that pays particular attention to the interests and special circumstances of developing countries.

### About the blog entry
- Title: Corporate Tax Rates: How Low Can You Go
- Author: The Editors
- Date: July 15, 2019
- IMFBlog is a forum for views of IMF staff and officials; the IMF is an organization of 191 countries working to foster global monetary cooperation and financial stability.
- Views expressed are those of the author(s) and do not necessarily represent the views of the IMF and its Executive Board.

*IMF Blog — Corporate Tax Rates: How Low Can You Go; The Editors; July 15, 2019.*

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## References

- [https://www.imf.org/wp-content/uploads/2019/07/tax.png](https://www.imf.org/wp-content/uploads/2019/07/tax.png)
- [a new approach](https://www.imf.org/en/News/Articles/2019/03/25/sp032519-md-piie-opening-remarks-on-international-corporate-taxation)
- [https://www.imf.org/wp-content/uploads/2019/07/tax2.png](https://www.imf.org/wp-content/uploads/2019/07/tax2.png)
- [analysis](https://www.imf.org/en/Publications/Policy-Papers/Issues/2019/03/08/Corporate-Taxation-in-the-Global-Economy-46650)

_Source: https://www.imf.org/en/blogs/articles/2019/07/15/corporate-tax-rates-how-low-can-you-go_