Globally, 36% of profits earned by multinational corporations are taxed at an effective rate below 15%. A notable share of these profits originates in countries that maintain higher nominal tax rates. Nations such as Spain, Luxembourg, the United States, France, Canada, Korea, Switzerland, Italy, Japan, Germany, Mexico, Portugal, and Brazil appear among the 68 jurisdictions with nominal rates ranging from 25% to 35% where this erosion occurs. The finding stands out in a recent OECD report that examines how much corporate tax is actually paid by large multinationals, highlighting a pattern of tax avoidance even in places known for higher tax regimes. This observation is part of a broader discussion on how profits are taxed across borders and where the tax burden ends up. A number of regions that are often labeled as tax havens or low-tax jurisdictions feature lower effective rates than their statutory rates would imply, underscoring the gap between nominal rates and real taxation.
Minimum 15% taxation
According to the OECD, many jurisdictions commonly viewed as high-tax offer incentives and exemptions that reduce the practical tax rate on profits. The report emphasizes that the goal is to establish a baseline where at least 15% of profits from multinational operations are taxed in OECD member countries. Spain has already initiated steps toward this objective and plans to keep advancing in this direction. The report is intended to inform policy discussions about implementing these results and anchoring a minimum 15% tax on multinational company profits in OECD economies.
The OECD methodology draws on a large dataset, examining 7,600 multinational companies across 222 countries and jurisdictions with annual turnovers above €750 million, spanning the years 2017 to 2020. The analysis estimates an average effective tax rate of 19.1% for this group, weighted by profits. Yet, the profits of large multinationals are reported to be about $2.143 trillion each year within the sample, representing roughly 36% of the total profits examined, taxed at rates below 15%.
Specifically, the combined profits are estimated at about $753 billion taxed at an effective rate under 5%, while roughly $1.39 trillion falls into the 5% to 15% band. Nevertheless, the majority of large multinational profits, about two-thirds of the total, face an effective tax rate between 15% and 30%.
Fiscal erosion in high-tax areas
The OECD also highlights a second major finding: more than half of the results taxed at less than 15% come from countries considered to have high statutory rates, yet these jurisdictions offer generous tax incentives that reduce the actual burden for big firms. Moreover, about 10% of multinational profits are generated in regions that, in practice, enjoy very low corporate tax rates.
In jurisdictions with statutory rates between 15% and 25%, roughly one-ninth of profits are taxed below 5%, and more than a third show tiny tax burdens. In places where the nominal rate exceeds 25%, more than a quarter report profits taxed at effective rates below 15%. On average, the gap between nominal and effective corporate tax rates in these areas is about 6.9 percentage points according to the OECD.
Spain: 31 multinational companies with an effective profit rate of 1.75%
The OECD’s companion statistics point to Spain as a country where corporate tax revenue and GDP share are below the European averages, with nominal rates around 25% and an average effective rate near 23%. The country-based analysis of 2020, drawn from 126 multinational parent-company filings, shows that 31 firms paid an effective tax rate of 1.75% on profits. An additional group, roughly 15 entities, registered an effective rate between 5% and 10% with an average close to 8.64%. Six firms benefited from an average rate near 11.46%, while 13 firms faced higher levels of taxation around 23.22%. A notable share, about 43% of profit, was taxed at roughly 43% under the figures examined.
These patterns illustrate how nominal policy rates interact with company structures, transfer pricing, and jurisdiction-specific incentives to shape the real tax take for multinational groups.