U.S. Department of the Treasury 

Office of Tax Analysis

February, 2020

1 

Table 1. 2019 OECD Overall Effective Tax Rates (in Percent) 

Combined

Statutory 

Corporate Tax 

Rate

PDV of Depreciation Overall Effective Tax 

Rates (Corporate Level)

Machinery Industrial 

Buildings

Acquired 

Patents EMTRs EATRs 

Australia 30.0 81.5 46.2 52.6 24.8 28.3

Austria 25.0 76.7 32.9 69.9 17.6 22.8

Belgium 29.6 81.5 52.6 100.5 11.9 24.6

Canada 26.8 95.4 60.4 80.5 19.0 24.4

Chile 25.0 60.3 32.9 79.2 28.5 26.2

Czech Republic 19.0 75.4 52.3 69.9 13.5 17.4

Denmark 22.0 77.9 46.2 93.4 14.1 19.7

Estonia 20.0 0.0 0.0 0.0 3.4 15.7

Finland 20.0 77.9 49.6 69.9 18.8 19.6

France 32.0 82.8 52.6 81.8 21.9 28.8

Germany 29.9 74.4 38.0 81.8 20.4 26.9

Greece 28.0 69.9 46.2 69.9 24.4 26.8

Hungary 11.1 73.2 22.1 73.2 11.3 11.2

Iceland 20.0 80.9 57.6 81.8 16.3 18.9

Ireland 12.5 74.4 46.2 76.7 11.5 12.2

Israel 23.0 69.9 52.6 74.4 21.7 22.6

Italy 27.8 71.9 44.7 90.3 17.6 24.7

Japan 29.7 75.7 34.3 74.4 37.0 32.6

Korea 27.5 86.4 52.6 76.7 12.3 23.2

Latvia 20.0 0.0 0.0 0.0 8.9 17.0

Lithuania 15.0 84.9 77.9 90.4 9.1 13.4

Luxembourg 24.9 82.0 46.2 81.8 12.3 21.7

Mexico 30.0 69.9 52.6 77.5 22.3 27.5

Netherlands 25.0 76.7 32.9 69.9 17.7 22.8

New Zealand 28.0 69.3 0.0 52.6 29.9 28.7

Norway 22.0 73.8 36.0 69.9 17.5 20.6

Poland 19.0 69.9 32.9 81.8 13.9 17.5

Portugal 31.5 83.4 52.6 69.9 -16.7 21.2

Slovak Republic 21.0 82.1 52.6 81.8 11.9 18.4

Slovenia 19.0 81.8 38.0 69.9 12.8 17.2

Spain 25.0 73.5 38.0 52.6 23.5 24.5

Swedena 20.9 80.9 46.2 80.9 13.2 18.4

Switzerland 21.1 80.9 53.0 84.9 9.9 18.0

Turkey 22.0 81.5 46.2 67.4 -13.9 14.1

United Kingdom 19.0 71.7 27.3 69.9 23.9 20.6

United States 25.9 93.6 33.5 60.3 26.9 26.2

OECD Average 26.2 82.6 39.4 70.3 22.0 25.1

OECD Average Excl. U.S. 26.4 76.8 42.4 75.4 19.4 24.6

G-7 Average 26.9 85.4 37.0 69.6 25.9 26.7

G-7 Average Excl. U.S. 28.0 77.2 40.5 79.0 25.0 27.2

Source: U.S. Department of the Treasury, Office of Tax Analysis

Notes: PDV = present discounted value; EMTRs = effective marginal tax rates; EATRs = effective average tax rates. The EMTRs and 

EATRs shown include real estate taxes and net wealth taxes on corporations.

a. The corporate income tax rate for Sweden takes account of the profit periodization reserve (tax allocation reserve), which allows

companies to allocate to a reserve up to 25percent of net profits.
U.S. Department of the Treasury 

Office of Tax Analysis

February, 2020

2 

Table 2. 2019 OECD Effective Marginal Tax Rates (in Percent) at the Corporate Level

Machinery Industrial Buildings

New Equity

and Retained 

Earnings

Debt Overall 

Average 

New Equity 

and Retained 

Earnings

Debt Overall 

Average 

Australia 26.3 -31.6 12.9 27.2 -28.7 14.1

Austria 25.9 -13.0 15.7 29.3 -5.3 20.1

Belgium 22.4 -30.8 9.6 40.9 13.9 33.6

Canada 7.0 -51.1 -7.4 42.6 18.3 35.9

Chile 41.2 19.0 34.9 37.2 11.1 30.0

Czech Republic 20.6 -7.2 12.7 17.3 -13.4 8.6

Denmark 21.9 -12.6 12.5 31.3 5.7 24.1

Estoniaa 25.8 0.0 3.4 25.8 0.0 3.4

Finland 19.9 -11.0 11.3 33.8 13.8 28.0

France 26.7 -41.0 11.9 40.1 0.7 30.5

Germany 33.0 -3.3 23.6 34.5 0.2 25.6

Greece 34.5 -1.5 25.2 33.6 -4.0 24.0

Hungary 13.1 0.9 9.2 19.9 9.7 16.6

Iceland 17.7 -15.3 8.5 34.1 14.2 28.3

Ireland 14.2 -3.5 8.7 23.2 9.2 18.8

Israel 28.8 -1.2 20.6 36.0 12.4 29.3

Italy 32.8 2.4 24.5 32.4 1.4 24.0

Japan 43.1 14.0 35.5 44.7 17.4 37.4

Korea 18.8 -42.0 4.5 24.7 -25.1 12.5

Latviaa 25.8 0.0 3.4 37.7 20.1 22.3

Lithuania 10.7 -14.4 3.3 27.4 11.5 22.5

Luxembourg 15.3 -39.1 1.9 30.9 -1.8 22.1

Mexico 36.7 -1.7 27.1 29.3 -22.4 17.1

Netherlands 25.9 -13.0 15.7 29.6 -4.7 20.5

New Zealand 35.0 -0.4 25.8 38.7 8.1 30.6

Norway 25.0 -6.4 16.3 24.5 -7.3 15.8

Poland 24.1 -0.9 16.9 27.3 4.5 20.6

Portugal -40.5 -42.3 -41.1 -26.9 -28.4 -27.4

Slovak Republic 17.6 -18.5 7.8 21.7 -10.3 12.9

Slovenia 16.1 -15.5 7.2 19.1 -10.0 10.8

Spain 28.4 -7.2 19.0 27.4 -9.6 17.7

Sweden 18.5 -16.3 9.0 23.6 -6.4 15.2

Switzerland 21.1 -16.6 11.0 19.4 -20.3 8.8

Turkey -31.1 -18.8 -26.5 -22.6 -11.8 -18.6

United Kingdom 23.0 -2.9 15.6 44.6 32.1 40.8

United States 22.3 -8.3 13.8 44.5 26.1 39.2

OECD Average 23.7 -10.3 14.9 35.4 9.4 28.5

OECD Average Excl. U.S. 24.5 -11.4 15.4 30.7 0.8 23.0

G-7 Average 26.5 -8.2 17.4 42.2 18.7 35.8

G-7 Average Excl. U.S. 30.7 -8.2 20.9 40.0 11.4 32.4

Source: U.S. Department of the Treasury, Office of Tax Analysis 
U.S. Department of the Treasury 

Office of Tax Analysis

February, 2020

3 

Table 2. 2019 OECD Effective Marginal Tax Rates (in Percent) at the Corporate Level, Cont’d. 

Acquired Patents Inventories

New Equity 

and Retained 

Earnings

Debt Overall 

Average 

New Equity 

and Retained 

Earnings

Debt Overall 

Average 

Australia 45.3 18.8 38.2 37.4 0.0 27.9

Austria 29.0 -5.9 19.7 25.0 -15.0 14.6

Belgium -7.3 -145.5 -33.6 26.5 -19.7 15.0

Canada 22.5 -28.0 10.1 33.8 0.0 24.9

Chile 27.9 -8.5 18.3 36.3 9.4 28.9

Czech Republic 22.3 -4.1 14.7 24.6 0.0 17.5

Denmark 7.1 -46.3 -6.5 28.2 0.0 20.3

Estoniaa 25.8 0.0 3.4 25.8 0.0 3.4

Finland 23.4 -4.4 15.6 25.8 0.0 18.4

France 25.9 -44.2 10.7 39.6 0.0 29.9

Germany 24.0 -26.2 11.7 29.9 -10.8 19.6

Greece 32.3 -7.0 22.3 35.1 0.0 26.0

Hungary 12.0 -0.5 8.0 14.8 3.2 11.1

Iceland 15.6 -19.4 6.0 25.8 0.0 18.4

Ireland 11.9 -6.8 6.2 16.6 0.0 11.4

Israel 23.8 -11.6 14.3 29.4 0.0 21.3

Italy 13.2 -45.0 -1.0 27.8 -8.4 18.2

Japan 42.4 12.3 34.5 46.9 22.4 40.3

Korea 26.4 -20.3 14.9 27.5 -17.5 16.3

Latviaa 25.8 0.0 3.4 25.8 0.0 3.4

Lithuania 6.5 -21.4 -1.7 15.0 -7.4 8.3

Luxembourg 19.8 -27.6 7.8 24.9 -15.0 14.6

Mexico 28.2 -25.6 15.6 37.4 0.0 27.9

Netherlands 29.0 -5.9 19.7 25.0 -15.0 14.6

New Zealand 42.9 17.3 36.0 35.1 0.0 26.0

Norway 25.7 -5.0 17.2 28.2 0.0 20.3

Poland 14.8 -18.0 5.6 19.0 -10.1 10.7

Portugal -7.3 -8.4 -7.7 0.9 0.0 0.6

Slovak Republic 16.5 -20.9 6.3 27.0 0.0 19.4

Slovenia 22.3 -4.1 14.7 24.6 0.0 17.5

Spain 39.2 15.2 32.5 31.7 0.0 23.2

Sweden 17.1 -19.3 7.2 27.8 1.3 20.3

Switzerland 16.7 -26.4 5.4 23.3 -11.8 13.9

Turkey -10.8 -1.8 -7.5 -8.6 0.0 -5.4

United Kingdom 22.3 -4.1 14.7 24.6 0.0 17.5

United States 36.1 10.9 29.0 29.2 -3.1 20.5

OECD Average 28.3 -6.5 19.4 29.5 -1.7 21.3

OECD Average Excl. U.S. 24.2 -15.6 14.4 29.7 -1.0 21.7

G-7 Average 31.7 -3.6 22.6 32.1 -0.4 23.5

G-7 Average Excl. U.S. 27.3 -18.2 16.1 35.0 2.3 26.5

Source: U.S. Department of the Treasury, Office of Tax Analysis 

Notes: EMTRs = effective marginal tax rates. The EMTRs shown include real estate taxes and net wealth taxes on corporations.

a. Estonia (since 2000) and Latvia (since 2018) have split-rate tax systems. In Estonia and Latvia, retained earnings are not 

taxed while profits distributed as dividends are taxed at the statutory corporate income tax rate of 20 percent (see Table 1). In 

the absence of real estate and net wealth taxes, this means that the EMTR on retained earnings is 0 percent while the EMTR on 

new equity is 25.8 percent. For all other OECD countries, the EMTR on retained earnings equals the EMTR on new equity.
U.S. Department of the Treasury 

Office of Tax Analysis

February, 2020

4 

Table 3. 2019 OECD Effective Average Tax Rates (in Percent) at the Corporate Level

Machinery Industrial Buildings

New Equity 

and Retained 

Earnings

Debt Overall 

Average 

New Equity 

and Retained 

Earnings

Debt Overall 

Average 

Australia 28.7 18.3 25.1 29.0 18.6 25.4

Austria 25.3 16.6 22.3 26.5 17.8 23.5

Belgium 27.3 18.0 24.0 34.4 25.0 31.1

Canada 21.5 13.9 18.8 33.7 24.2 30.4

Chile 31.9 23.1 28.8 29.9 21.1 26.8

Czech Republic 19.5 12.9 17.2 18.5 11.9 16.2

Denmark 22.0 14.3 19.3 25.4 17.7 22.7

Estoniaa 22.0 15.0 15.7 22.0 15.0 15.7

Finland 20.0 13.0 17.5 25.2 18.2 22.8

France 30.2 19.1 26.3 35.4 24.1 31.5

Germany 31.0 21.9 27.8 31.7 22.5 28.4

Greece 30.5 20.7 27.1 30.1 20.3 26.7

Hungary 11.7 8.5 10.6 13.8 10.7 12.7

Iceland 19.3 12.3 16.9 25.4 18.3 22.9

Ireland 13.0 8.6 11.5 16.0 11.6 14.4

Israel 25.0 17.0 22.2 28.1 20.0 25.2

Italy 29.6 21.3 26.7 29.5 21.1 26.6

Japan 35.6 25.2 32.0 36.5 26.0 32.8

Korea 24.8 15.3 21.5 26.6 17.0 23.2

Latviaa 22.0 15.0 15.7 27.1 20.0 20.7

Lithuania 13.8 8.6 12.0 19.3 14.0 17.4

Luxembourg 23.7 15.1 20.7 27.1 18.4 24.0

Mexico 32.7 22.2 29.0 29.8 19.3 26.1

Netherlands 25.3 16.6 22.3 26.6 17.9 23.6

New Zealand 30.7 20.9 27.3 32.3 22.6 28.9

Norway 23.0 15.3 20.3 22.8 15.2 20.2

Poland 20.7 14.1 18.4 21.8 15.2 19.5

Portugal 18.7 18.5 18.6 20.0 19.8 19.9

Slovak Republic 20.0 12.7 17.4 21.2 13.9 18.7

Slovenia 18.1 11.5 15.8 19.0 12.4 16.7

Spain 26.2 17.5 23.1 25.8 17.1 22.8

Sweden 19.7 12.6 17.2 21.3 14.2 18.8

Switzerland 21.1 13.1 18.3 20.6 12.5 17.8

Turkey 11.9 13.4 12.4 12.9 14.4 13.4

United Kingdom 20.3 13.7 18.0 30.6 23.8 28.2

United States 24.7 18.0 22.4 34.3 26.0 31.3

OECD Average 25.97 18.25 23.26 30.74 22.39 27.81

OECD Average Excl. U.S. 26.62 18.38 23.72 28.91 20.54 25.97

G-7 Average 27.07 19.12 24.28 33.74 24.89 30.64

G-7 Average Excl. U.S. 29.41 20.24 26.20 33.21 23.82 29.93

Source: U.S. Department of the Treasury, Office of Tax Analysis 
U.S. Department of the Treasury 

Office of Tax Analysis

February, 2020

5 

Table 3. 2019 OECD Effective Average Tax Rates (in Percent) at the Corporate Level, Cont’d.

Acquired Patents Inventories

New Equity 

and Retained 

Earnings

Debt Overall 

Average 

New Equity 

and Retained 

Earnings

Debt Overall 

Average 

Australia 37.0 26.5 33.3 32.9 22.5 29.3

Austria 26.4 17.7 23.4 25.0 16.3 22.0

Belgium 21.0 11.8 17.8 28.5 19.3 25.3

Canada 25.4 16.1 22.2 29.4 20.1 26.2

Chile 26.0 17.3 23.0 29.4 20.7 26.4

Czech Republic 20.1 13.5 17.8 20.9 14.3 18.5

Denmark 18.0 10.3 15.3 24.2 16.5 21.5

Estoniaa 22.0 15.0 15.7 22.0 15.0 15.7

Finland 21.1 14.2 18.7 22.0 15.0 19.5

France 30.0 18.8 26.1 35.2 24.0 31.3

Germany 28.0 18.8 24.7 29.9 20.7 26.7

Greece 29.6 19.8 26.2 30.7 21.0 27.3

Hungary 11.3 8.2 10.2 12.2 9.0 11.1

Iceland 18.7 11.7 16.3 22.0 15.0 19.5

Ireland 12.3 8.0 10.8 13.7 9.4 12.2

Israel 23.3 15.2 20.5 25.3 17.3 22.5

Italy 23.6 15.3 20.7 27.8 19.5 24.9

Japan 35.2 24.8 31.6 37.8 27.4 34.2

Korea 27.1 17.6 23.8 27.5 17.9 24.2

Latviaa 22.0 15.0 15.7 22.0 15.0 15.7

Lithuania 12.7 7.5 10.9 15.0 9.8 13.2

Luxembourg 23.3 14.6 20.3 24.9 16.3 21.9

Mexico 29.4 18.9 25.7 32.9 22.5 29.3

Netherlands 26.4 17.7 23.4 25.0 16.3 22.0

New Zealand 34.5 24.8 31.1 30.7 21.0 27.3

Norway 23.2 15.6 20.6 24.2 16.5 21.5

Poland 17.8 11.2 15.5 19.0 12.4 16.7

Portugal 22.5 22.3 22.4 23.8 23.6 23.7

Slovak Republic 19.6 12.3 17.1 23.1 15.8 20.5

Slovenia 20.1 13.5 17.8 20.9 14.3 18.5

Spain 30.8 22.1 27.8 27.5 18.8 24.4

Sweden 19.3 12.2 16.8 23.2 16.1 20.7

Switzerland 19.8 11.7 17.0 21.9 13.8 19.0

Turkey 14.6 16.1 15.1 15.0 16.5 15.5

United Kingdom 20.1 13.5 17.8 20.9 14.3 18.5

United States 29.9 21.7 27.0 27.1 18.9 24.2

OECD Average 27.52 19.25 24.62 27.77 19.50 24.87

OECD Average Excl. U.S. 26.31 17.99 23.38 28.15 19.83 25.22

G-7 Average 29.01 20.26 25.94 29.05 20.29 25.98

G-7 Average Excl. U.S. 28.15 18.82 24.88 31.05 21.72 27.78

Source: U.S. Department of the Treasury, Office of Tax Analysis 

Notes: EATRs = effective average tax rates. The EATRs shown include real estate taxes and net wealth taxes on corporations.

a. Estonia (since 2000) and Latvia (since 2018) have split-rate tax systems. In Estonia and Latvia, retained earnings are not 

taxed while profits distributed as dividends are taxed at the statutory corporate income tax rate of 20 percent (see Table 1). In 

the absence of real estate and net wealth taxes, this means that the EATR on retained earnings is 15 percent while the EATR on 

new equity is 22 percent. For all other OECD countries, the EATR on retained earnings equals the EATR on new equity.
U.S. Department of the Treasury 

Office of Tax Analysis

February, 2020

6 

Table 4. 2019 OECD Overall Effective Tax Rates (in Percent) 

Combined

Statutory 

Corporate Tax 

Rate

PDV of Depreciation Overall Effective Tax 

Rates (Corporate Level)

Machinery Industrial 

Buildings

Acquired 

Patents EMTRs EATRs 

Australia 30.0 81.5 46.2 52.6 24.8 28.3

Austria 25.0 76.7 32.9 69.9 16.7 22.5

Belgium 29.6 81.5 52.6 100.5 2.7 22.7

Canada 26.8 95.4 60.4 80.5 9.7 22.1

Chile 25.0 60.3 32.9 79.2 22.5 24.2

Czech Republic 19.0 75.4 52.3 69.9 13.0 17.3

Denmark 22.0 77.9 46.2 93.4 10.0 18.7

Estonia 20.0 0.0 0.0 0.0 3.4 15.7

Finland 20.0 77.9 49.6 69.9 13.4 18.1

France 32.0 82.8 52.6 81.8 16.9 27.5

Germany 29.9 74.4 38.0 81.8 18.9 26.5

Greece 28.0 69.9 46.2 69.9 22.0 26.1

Hungary 11.1 73.2 22.1 73.2 9.5 10.7

Iceland 20.0 80.9 57.6 81.8 9.8 17.2

Ireland 12.5 74.4 46.2 76.7 7.9 11.3

Israel 23.0 69.9 52.6 74.4 16.3 21.0

Italy 27.8 71.9 44.7 90.3 15.3 24.1

Japan 29.7 75.7 34.3 74.4 26.1 28.5

Korea 27.5 86.4 52.6 76.7 11.6 23.0

Latvia 20.0 0.0 0.0 0.0 3.4 15.7

Lithuania 15.0 84.9 77.9 90.4 2.1 11.7

Luxembourg 24.9 82.0 46.2 81.8 9.1 21.0

Mexico 30.0 69.9 52.6 77.5 21.0 27.2

Netherlands 25.0 76.7 32.9 69.9 16.7 22.5

New Zealand 28.0 69.3 0.0 52.6 29.9 28.7

Norway 22.0 73.8 36.0 69.9 16.9 20.5

Poland 19.0 69.9 32.9 81.8 11.6 16.9

Portugal 31.5 83.4 52.6 69.9 -19.0 20.9

Slovak Republic 21.0 82.1 52.6 81.8 10.5 18.1

Slovenia 19.0 81.8 38.0 69.9 12.8 17.2

Spain 25.0 73.5 38.0 52.6 22.9 24.3

Swedena 20.9 80.9 46.2 80.9 11.7 18.0

Switzerland 21.1 80.9 53.0 84.9 8.4 17.7

Turkey 22.0 81.5 46.2 67.4 -15.2 13.9

United Kingdom 19.0 71.7 27.3 69.9 15.5 18.0

United States 25.9 93.6 33.5 60.3 16.7 23.1

OECD Average 26.2 82.6 39.4 70.3 15.8 23.2

OECD Average Excl. U.S. 26.4 76.8 42.4 75.4 15.3 23.3

G-7 Average 26.9 85.4 37.0 69.6 17.6 24.1

G-7 Average Excl. U.S. 28.0 77.2 40.5 79.0 18.6 25.2

Source: U.S. Department of the Treasury, Office of Tax Analysis

See notes to Table 1. The EMTRs and EATRs shown exclude real estate taxes and net wealth taxes on corporations.

 
U.S. Department of the Treasury 

Office of Tax Analysis

February, 2020

7 

Table 5. 2019 Components of Combined Statutory Corporate Tax Rates 

Central

Government

Corporate 

Tax Rate 

Surcharge Local Profit 

Tax Rate 

Combined

Statutory 

Corporate 

Tax Rate 

Australia 0.3000 0.0000 0.0000 0.3000

Austria 0.2500 0.0000 0.0000 0.2500

Belgium 0.2900 0.0200 0.0000 0.2958

Canada 0.1500 0.0000 0.1180 0.2680

Chile 0.2500 0.0000 0.0000 0.2500

Czech Republic 0.1900 0.0000 0.0000 0.1900

Denmark 0.2200 0.0000 0.0000 0.2200

Estoniaa 0.2000 0.0000 0.0000 0.2000

Finland 0.2000 0.0000 0.0000 0.2000

France 0.3100 0.0330 0.0000 0.3202

Germanyb 0.1500 0.0550 0.1406 0.2989

Greece 0.2800 0.0000 0.0000 0.2800

Hungaryc 0.0900 0.0000 0.0230 0.1109

Iceland 0.2000 0.0000 0.0000 0.2000

Ireland 0.1250 0.0000 0.0000 0.1250

Israel 0.2300 0.0000 0.0000 0.2300

Italyd 0.2400 0.0000 0.0381 0.2781

Japane 0.2320 0.1730 0.0347 0.2974

Koreaf 0.2500 0.0000 0.0250 0.2750

Latviaa 0.2000 0.0000 0.0000 0.2000

Lithuania 0.1500 0.0000 0.0000 0.1500

Luxembourgg 0.1700 0.0700 0.0675 0.2494

Mexico 0.3000 0.0000 0.0000 0.3000

Netherlands 0.2500 0.0000 0.0000 0.2500

New Zealand 0.2800 0.0000 0.0000 0.2800

Norway 0.2200 0.0000 0.0000 0.2200

Poland 0.1900 0.0000 0.0000 0.1900

Portugal 0.2100 0.0900 0.0150 0.3150

Slovak Republic 0.2100 0.0000 0.0000 0.2100

Slovenia 0.1900 0.0000 0.0000 0.1900

Spain 0.2500 0.0000 0.0000 0.2500

Swedenh 0.2140 0.0000 0.0000 0.2140

Switzerlandi 0.0850 0.0000 0.1445 0.2115

Turkey 0.2200 0.0000 0.0000 0.2200

United Kingdom 0.1900 0.0000 0.0000 0.1900

United Statesj 0.2100 0.0000 0.0618 0.2589
U.S. Department of the Treasury 

Office of Tax Analysis

February, 2020

8 

Sources: OECD Tax Database, International Bureau of Fiscal Documentation Global Corporate Tax 

Handbook 2019

a. Estonia and Latvia do not tax retained profits. Corporate profits are only taxed if they are 

distributed.

b. Since 2008, the local profit tax (the municipal trade tax) is not deductible for trade tax purposes or 

for federal corporate income tax purposes. In addition, 25 percent of all interest payments exceeding 

a threshold of EUR 100,000 are not deductible from the local trade tax base.

c. Hungary has a local business tax with a maximum rate of 2 percent and an innovation tax with a 

rate of 0.3 percent. Both local taxes are deductible for corporate income tax purposes. However, the 

tax base for the local tax is not reduced by interest paid. 

d. The combined statutory corporate tax rate for Italy includes a 3.9 percent regional tax on 

production activities (IRAP), 10 percent of which is deductible for corporate income tax purposes. 

Interest expenses are not deductible when calculating the tax base for the IRAP.

e. Japan’s surcharge and local profit tax rate include the prefectural inhabitant tax, the municipal 

inhabitant tax, and the local enterprise tax.

f. The maximum local income tax rate for corporations is 2.5 percent. The local income tax is not 

deductible for corporate income tax purposes. 

g. The municipal business tax in the city of Luxembourg is 6.75 percent, or a basic rate of 3 percent

multiplied by a coefficient of 2.25. The municipal business tax is not deductible for corporate income 

tax purposes.

h. Sweden imposes a flat 21.4 percent corporate income tax. However, companies can create a profit 

periodization reserve by allocating to a reserve up to 25 percent of net profits. The reserve must be 

dissolved (and added to taxable income) no later than the sixth year after the allocation has been 

made. Since 2005, notional income from the reserve is taxable. The notional taxable income is 

calculated by multiplying the total amount of the allocations to the reserve fund by 72 percent of the 

interest rate on long-term government bonds as of the end of November in the previous tax year. The 

profit periodization reserve reduces Sweden’s combined corporate tax rate to 20.89 percent.

i. The local profits tax rate is obtained by multiplying a basic rate of 8.0 percent for the canton of 

Zurich by the sum of a cantonal coefficient (1.00), a municipal coefficient (1.19), and a parish 

coefficient (0.10) for the city of Zurich.

j. The Tax Cuts and Jobs Act (TCJA) limits interest deductions to 30 percent of adjusted taxable 

income for corporate debt. From 2018 through 2021, adjusted taxable income is calculated as 

earnings before interest, tax, depreciation, and amortization (EBITDA); beginning in 2022, it is 

computed as earnings before interest and tax (EBIT). Using the nonpublic IRS corporate study tax 

file, the average C-corporation disallowance share (or the share of interest paid that cannot be 

deducted) for all industries is calculated to be 9.2 percent between 2018 and 2021 and 15.2 percent

between 2022 and 2027.
U.S. Department of the Treasury 

Office of Tax Analysis

February, 2020

9 

Table 6. 2019 Real Estate and Net Wealth Tax Rates for Corporations 

Real Estate Tax Effectivea Net Wealth Tax

Nominal Effectivea Machinery Buildings Patents Inventories

Australia 0.0000 0.0000

Austria 0.0025 0.0019

Belgium 0.0205 0.0145

Canada 0.0242 0.0177

Chileb 0.0060 0.0045 0.0038 0.0038 0.0038 0.0038

Czech Republic 0.0013 0.0011

Denmark 0.0100 0.0078

Estonia 0.0000 0.0000

Finland 0.0147 0.0117

Francec 0.0054 0.0037 0.0000 0.0063 0.0000 0.0000

Germany 0.0047 0.0033

Greece 0.0058 0.0057

Hungary 0.0043 0.0039

Iceland 0.0165 0.0132

Ireland 0.0084 0.0074

Israel 0.0158 0.0122

Italy 0.0052 0.0046

Japand 0.0170 0.0119 0.0098 0.0000 0.0098 0.0098

Korea 0.0018 0.0013

Latvia 0.0150 0.0120

Lithuania 0.0150 0.0128

Luxembourg 0.0075 0.0056

Mexico 0.0041 0.0029

Netherlands 0.0028 0.0021

New Zealand 0.0000 0.0000

Norway 0.0016 0.0012

Poland 0.0057 0.0046

Portugal 0.0032 0.0022

Slovak Republic 0.0035 0.0028

Slovenia 0.0000 0.0000

Spain 0.0020 0.0015

Sweden 0.0038 0.0029

Switzerlande 0.0000 0.0000 0.0014 0.0014 0.0014 0.0014

Turkey 0.0020 0.0016

United 

Kingdom 0.0252 0.0204

United Statesf 0.0202 0.0150 0.0066 0.0000 0.0000 0.0022

Sources: International Bureau of Fiscal Documentation Global Corporate Tax Handbook 2019, PwC Worldwide Tax 

Summaries, Spengel et al. (2018), various country-specific sources. 
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a. The effective tax rate allows for the deductibility of real estate taxes and other net wealth taxes from corporate 

income taxes. See the country notes explaining calculation of the real estate tax rates.

b. The net wealth tax shown for Chile is an annual municipal license fee on capital registered on the balance sheet. 

The rate varies by municipality and location within the municipality. It ranges from 0.25 percent to 0.5 percent. An 

average tax rate of 0.375 percent is assumed.

c. The net wealth tax shown for France, the Cotisation Fonciere des Entreprises (CFE), is assumed to apply only to 

buildings. The CFE is based on the rental value of assets that are subject to the real estate tax. The CFE tax rate is 

determined by the municipality. The 2019 CFE tax rate for Paris is 16.52 percent. The rental value of buildings is 

assumed to amount to 8 percent of acquisition costs. PwC Worldwide Tax Summaries indicates that for industrial 

buildings the taxable base for CFE is reduced by 30 percent. Hence, the nominal other profit tax rate for France is 

obtained by taking 70 percent of the product of 16.52 percent and 8 percent.

d. The municipal fixed asset tax in Japan consists of a standard tax rate of 1.4 percent and a city planning tax of 0.3

percent. The standard tax rate is assumed to apply to machinery and inventories. The city planning tax component of 

the municipal fixed assets tax is not assumed to apply to machinery and inventories.

e. In Zurich, the net worth tax has a basic rate of 0.075 percent. This basic rate is multiplied by the sum of a cantonal 

coefficient (1.00) for Zurich, a municipal coefficient (1.19) for the city of Zurich, and a parish coefficient (0.10). 

f. The net wealth tax shown for the United States is a weighted-average of state and local personal property tax rates. 

State and local personal property tax rates apply to machinery and inventories. 

Country Notes:

Australia: Australia has no real estate tax.

Austria: The real estate tax is levied at a basic federal rate of 0.2 percent. This basic federal rate is multiplied by a 

municipal coefficient that can reach a maximum of 500 percent. The real estate tax is levied on the assessed value of 

the property; the assessed value is assumed to equal 25 percent of market value.

Belgium: The nominal real estate tax rate is the sum of an “immovable withholding tax” rate of 1.25 percent (for the 

Brussels regions) and a municipal surcharge of 3000 multiplied by the withholding tax rate. The real estate tax is 

levied on the rental value of the property. Spengel, et al. (2018) assume that the rental value is 5.3 percent of the

market value.

Canada: The nominal real estate tax rate is a population-weighted average of nonresidential (commercial) property 

tax rates in 8 major Canadian cities—Calgary, Edmonton, Vancouver, Winnipeg, Ottawa, Toronto, Montreal, and 

Halifax. 

Chile: The general real estate tax rate is 1.2 percent for urban property. The taxable base is the cadastral value. The 

cadastral value is assumed to equal 50 percent of market value.

Czech Republic: The ground floor area of a building determines the taxable base. For flats and nonresidential spaces, 

the area in square meters is multiplied by a coefficient of 1.2. Tax rates depend on the use of the building. For 

business premises, the rate is CZK 10 per square meter. The nominal real estate tax rate is multiplied by a coefficient 

of 4.5 for buildings located in Prague. Prague may increase the coefficient up to a maximum of 5.

Denmark: The municipal real estate tax on buildings used for business purposes may not exceed 1 percent.

Estonia: Estonia has no real estate tax.

Finland: The nominal real estate tax is the mean of a minimum real estate tax rate of 0.93 percent and a maximum real 

estate tax rate of 2.0 percent.

France: The real estate tax (Taxe Fonciere sur les Proprietes Baties) is calculated by applying city/department 

property tax rates to half the notional rental value of a commercial property as defined by a local land registry. The 

tax rate is determined annually by local authorities. The rental value of industrial buildings is assumed to amount to 8 

percent of the acquisition cost. Property tax rates are for Paris, which has lower local property tax rates than do some

other French cities. For 2019, the local property tax rate in Paris is a combination of a city (ville) rate of 8.37 percent 

and a department rate of 5.13 percent. Hence, the nominal real estate tax equals 100 ∙ �0.08 ∙ 0.5 ∙

(0.0513 + 0.0837)�. 

Germany: The real property tax (Grundsteuer) is calculated by multiplying a real property tax rate of 0.35 percent and 

a municipal multiplier (Hebesatz) by the assessed value of a real property. Federal fiscal authorities establish the 

assessed value, which Spengel, et al. (2018) assume amounts to 25 percent of the acquisition cost, and the basic 

federal rate. Municipalities determine the multiplier. The nominal real estate tax rate is calculated using a populationweighted average multiplier for German cities with a population over 20,000.

Greece: The nominal real estate tax is the sum of a supplementary unified annual real estate ownership tax and a local 

real estate tax rate. The supplementary tax is imposed on the total value of the real estate property at a rate of 0.55 
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percent for legal entities. The local real estate tax rate varies between 0.025 percent and 0.035percent; a mean of 0.03

percent is assumed.

Hungary: The real estate tax is either a maximum of HUF 1898/m2 or a maximum of 3.6 percent of the fair market 

value of the building.

Iceland: Municipalities levy a property tax based on the assessed value of immovable property. The commercial (Ctax) property tax in Reykjavik is 1.65 percent of assessed value. The assessed value is assumed to equal market value.

Ireland: The local tax on immovable property (the commercial “rates”) is calculated by multiplying a rateable 

valuation by an annual rate of valuation. The annual rate of valuation is set annually by the local government. For 

Dublin, the annual rate of valuation (the rate multiplier) is 0.268 for 2019. Spengel, et al. (2018) assume a rateable

valuation (the estimate of the annual rental value of the property) for Dublin of 63 percent. They also assume that the 

annual rental value amounts to 5 percent of the acquisition cost. 

Israel: A municipal tax (Arnona) is levied annually on buildings by local authorities in Israel. For 2019, the nominal 

real estate tax is calculated using an average of three rates for industrial plants set by the municipal government in 

Jerusalem. The three rates, expressed as NIS (shekels) per square meter, are 138.90, 103.05, and 83.64; the average of 

the three rates is 108.5. 

Italy: In January 2012, the unified municipal tax (IMU) replaced the municipal tax on immovable property (ICI). The 

basic IMU rate is 0.76 percent. However, local authorities can raise the IMU rate to a maximum of 1.06 percent or 

lower the IMU rate to a minimum of 0.46 percent. The taxable value for the IMU is the cadastral value, or the 

standard value attributed to a property in the official register. The cadastral value is assumed to equal 68 percent of 

the acquisition cost. Forty percent of the IMU is deductible for income tax purposes.

Japan: The municipal fixed assets tax consists of a standard tax rate of 1.4 percent and a city planning tax of 0.3 

percent. The tax base corresponds to the market value.

Korea: Real estate taxes in Korea vary by property type and location. Buildings are taxed at rates between 0.25

percent and 4 percent. Factories are assumed to be taxed at a rate of 0.25 percent. However, if the factory is in a 

designated metropolitan area and is new or expanded, the property tax rate is 1.25 percent, or 5 times the standard 

rate, for 5 years. Property tax is levied on 70 percent of the current standard value of land and buildings, which is

assumed to correspond to acquisition cost.

Latvia: Real estate tax is levied on immovable property such as land and buildings at a basic rate of 1.5 percent of the 

cadastral value. Spengel, et al. (2018) assume that the cadastral value equals the acquisition cost. 

Lithuania: An annual property tax on immovable property ranges from 0.3 percent to 3 percent of the taxable value. 

The nominal real estate tax is 1.5 percent assuming that the taxable value is 50 percent of the acquisition cost 

(Spengel, et al. (2018)).

Luxembourg: The real estate tax is based on the unitary value of real estate. The basic tax rate is between 0.7 percent

and 1 percent. It is multiplied by a municipal coefficient that equals 750 percent for Luxembourg City. The 

municipal coefficient for Luxembourg City is applied to a basic rate of 1 percent. Spengel, et al. (2018) assume that 

the unitary value is 10 percent of the acquisition cost.

Mexico: The real estate tax is levied by the Federal District and all states at rates that range from 0.05 percent to 2

percent. An average value is calculated for the Federal District. The taxable base for the property tax is the cadastral 

value, which is assumed to equal 50 percent of market value.

Netherlands: The real estate tax rate for immovable nonresidential property in Amsterdam is 0.28 percent. The real 

estate tax is deductible for corporate income tax purposes. The basis for the real estate tax is the property value.

New Zealand: New Zealand has no real estate tax.

Norway: Immovable property is subject to a municipal real estate tax. The taxable base is the assessed value, which is 

between 20 percent and 50 percent of market value. The real estate tax is levied at fixed rates ranging from 0.2

percent to 0.7 percent. The nominal real estate tax is calculated assuming an average fixed rate of 0.45 percent and an

average assessed value of 35 percent.

Poland: The taxable base for the real estate tax is the floor area of the building. For buildings used for business, the 

maximum tax rate for 2018 is PLN 23.10/m2

. 

Portugal: The tax base for the municipal real estate tax (IMI) is 80 percent to 90 percent of the market value of a 

property. IMI rates are 0.3 percent to 0.45 percent for urban buildings registered or owned from December 2003. An 

average market value of 85 percent and an average IMI rate of 0.38 percent are assumed.

Slovak Republic: The immovable property tax is based on the area of the real estate, its location, and its type. In the 

city of Bratislava, real estate taxes are divided into three bands. The real estate tax for industrial buildings and 

warehouses is EUR 3/m2 for band 1, EUR 4/m2 for band 2, and EUR 5 /m2 for band 3. The real estate tax for 

buildings used for other business activities is EUR 5 /m2 for band 1, EUR 6 /m2 for band 2, and EUR 8.3 EUR/m2 for 

band 3. An average of real estate taxes for industrial buildings and other buildings is used.

Slovenia: Slovenia has no real estate tax.
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Spain: For 2019, the real estate tax is levied by municipalities at a general rate of 0.4 percent for urban property. The 

taxable base is the cadastral value, which in Spengel, et al. (2018) is assumed to equal 50 percent of the acquisition 

cost.

Sweden: A national real estate tax is levied on all immovable commercial and industrial property. The tax rate is 1 

percent for commercial premises and 0.5 percent for industrial property. Spengel (2018), et al. assume that the taxable 

base equals 75 percent of the acquisition cost.

Switzerland: Zurich has no real estate tax on immovable property.

Turkey: The real estate tax for buildings is 0.2 percent.

United Kingdom: Local municipal taxes are levied on the occupiers of business property by reference to a deemed 

annual rental value (the rateable value) determined by the Valuation Office Agency of HM Revenue & Customs. 

Spengel, et al. (2018) assume that the rateable value amounts to 5 percent of the acquisition cost. It is multiplied by 

the “rate in pound.” The rate in the pound (also called the multiplier) is set by the Communities and Local 

Government. Between revaluations (every 5 years), the rate in the pound adjusts annually by the rate of inflation. In 

2019, it is 50.4 percent. 

United States: The Minnesota Center for Fiscal Excellence and the Lincoln Institute of Land Policy annually publish a 

50-State Property Tax Comparison Study that includes average effective commercial property tax rates and industrial 

property tax rates for all 50 states and the District of Columbia. (The June 2019 report is available at 

https://www.lincolninst.edu/publications/other/50-state-property-tax-comparison-study-3, accessed May 16, 2022.) 

Real and personal property tax rates and net tax amounts from Table 3a and Table 4a of the June 2019 report are 

combined with municipal data on statutory property tax rates and the taxable base to obtain average effective property 

tax rates for commercial buildings, industrial buildings, machinery, and inventories in the largest urban areas in each 

state plus the District of Columbia. 

Spengel, Christoph, Frank Schmidt, Jost Heckemeyer, and Katharina Nicolay, 2018, “Project for the EU Commission,

Effective Tax Levels Using the Devereux/Griffith Methodology,” TAXUD/2018/DD/307, Intermediary Report 2018, 

available at https://ec.europa.eu/taxation_customs/system/files/2019-

03/final_report_2018_effective_tax_levels_revised_en.pdf (accessed May 16, 2022). 
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Table 7. 2019 Tax Treatment of Inventories

Proportion of Inventories Valued by FIFO

Australia 1.0000

Austria 0.0000

Belgium 0.0000

Canada 1.0000

Chile 1.0000

Czech Republic 1.0000

Denmark 1.0000

Estoniaa ---

Finland 1.0000

France 1.0000

Germany 0.0000

Greece 1.0000

Hungary 1.0000

Iceland 1.0000

Ireland 1.0000

Israel 1.0000

Italy 0.0000

Japan 1.0000

Korea 0.0000

Latviaa ---

Lithuania 0.0000

Luxembourg 0.0000

Mexico 1.0000

Netherlands 0.0000

New Zealand 1.0000

Norway 1.0000

Poland 0.0000

Portugal 1.0000

Slovak Republic 1.0000

Slovenia 1.0000

Spain 1.0000

Sweden 1.0000

Switzerland 0.0000

Turkey 1.0000

United Kingdom 1.0000

United States 0.0000

Sources: International Bureau of Fiscal Documentation Global Corporate Tax Handbook 2019, PwC Worldwide Tax 

Summaries, and Ernst & Young Worldwide Corporate Tax Guide.

Notes: FIFO = first-in-first-out; LIFO = last-in-first-out. A value of 0 indicates that 100 percent of inventories are valued by 

LIFO accounting methods. A value of 1 indicates that 100 percent of inventories are valued by FIFO accounting methods.

a. Estonia and Latvia tax distributed profits instead of corporate income.
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Table 8A. 2019 Tax Depreciation for Machinery

Kind of 

Allowance

Acceleration

Factorc

Allowance 

Rate (in 

Percent)

Length of 

Period (in 

Years)

Optimal 

Switching 

Time (in 

Years)

Australia DBSL 2.00 28.57 (DB) 7 4.00 

8.68 (SL)

Austria SL 14.29 7.00

Belgium DBSL 2.00 28.57 (DB) 7.00 4.00

8.68 (SL)

Canadaa,b DB 50.00 ufd

Chile SL 6.67 15

Czech Republicd DB 10.00 10.00

Denmark DB 25.00 ufd

Estoniae --- --- --- --- ---

Finland DB 25.00 ufd

France DBSL 2.25 32.14 (DB) 7.00 4.00

7.07 (SL)

Germany SL 12.50 8.00

Greece SL 10.00 10

Hungary SL 50.00 2.00

Iceland DB 30.00 ufd

Ireland SL 12.50 8.00

Israel SL 10.00 10.00

Italy SL 6.25 1.00

12.50 7.00

6.25 1.00

Japan DBSL 2.00 20.00 (DB) 10.00 5.00

6.55 (SL)

Korea DB 45.10 ufd

Latviae --- --- --- --- ---

Lithuania DB 40.00 ufd

Luxembourg DBSL 2.10 30.00 (DB) 7.00 4.00

8.00 (SL)

Mexico SL 10.00 10.00

Netherlands SL 14.29 7.00

New Zealand DB 16.00 ufd

Norway DB 20.00 ufd

Poland SL 10.00 10.00

Portugal DB 35.71 ufd

Slovak Republicd DB 16.67 6.00

Slovenia SL 20.00 5.00
U.S. Department of the Treasury 

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February, 2020

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Table 8A. 2019 Tax Depreciation for Machinery, Cont’d.

Kind of 

Allowance

Acceleration

Factorc

Allowance 

Rate (in 

Percent)

Length of 

Period (in 

Years)

Optimal 

Switching 

Time (in 

Years)

Spain SL 12.00 8.00

4.00 1.00

Sweden DB 30.00 ufd

Switzerland DB 30.00 ufd

Turkey DBSL 2.00 28.57 (DB) 7.00 4.00

8.68 (SL)

United Kingdom DB 18.00 ufd

United Statesa,b DBSL 2.00 28.57 (DB) 7.00 4.00

8.92 (SL)

4.46 (SL)f

Sources: Spengel, et al. (2018), the Oxford University Centre for Business Taxation (2017), International Bureau of 

Fiscal Documentation Global Corporate Tax Handbook 2019, PwC Worldwide Tax Summaries, and Ernst & Young 

Worldwide Corporate Tax Guide. 

Notes: SL = straight line; DB = declining balance; DBSL = declining balance with a switch to straight line; ufd = 

until fully depreciated; EMTRs = effective marginal tax rates; EATRs = effective average tax rates. 

a. Depreciation is reduced by half in the first year (half-year convention).

b. For 2019, temporary stimulus measures are included for Canada and the United States. In Canada, businesses can 

immediately expense 100 percent of qualifying assets (machinery and equipment used to manufacture goods) in the 

year they become available for use. One-hundred percent expensing is phased out beginning in 2024. In the United 

States, a first-year, bonus depreciation deduction is allowed for qualifying property (primarily machinery and 

equipment). For 2019, the bonus depreciation rate is 100 percent. For both Canada and the United States, the 

calculation of the EMTRs and EATRs treats immediate expensing/bonus depreciation as elective. We assume that

only roughly 70 percent (and not 100 percent) of qualified property placed in service in 2019 is expensed. This 70 

percent is based on an average bonus take-up rate calculated using U.S. tax data. 

c. For those countries where machinery can be depreciated using the DBSL method, the DB depreciation rate shown 

is obtained by dividing the acceleration factor by the length of period (in years) shown. 

d. The Czech Republic and the Slovak Republic use either the SL method or an accelerated depreciation method. 

This accelerated method is a DB method that uses the same periods as the SL method. In the Czech Republic, assets 

are divided into 6 categories based on useful life. Machinery and equipment used in specified industrial processes are

in category 3 and have a useful life of 10 years. Buildings other than office buildings, hotels, and shopping malls are 

in category 5 and have a useful life of 30 years. In the Slovak Republic, assets are also divided into 6 categories 

based on useful life. Machinery and equipment are in category 2 and have a useful life of 6 years. Certain buildings 

are in category 5 and have a useful life of 20 years. From 2015, accelerated depreciation is applicable only to assets 

in categories 2 and 3.

e. Estonia and Latvia tax distributed profits instead of corporate income.

f. Machinery is depreciated at an allowance rate of 8.92 percent in years 5 through 7. The remaining balance is

depreciated at an allowance rate of 4.46 percent in a final half year.

Oxford University Centre for Business Taxation, 2017, CBT Tax Database, available at 

https://ora.ox.ac.uk/objects/uuid:81f28d9a-fe6e-445b-8d34-a641b573d986 (accessed December 14, 2021).
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Table 8B. 2019 Tax Depreciation for Industrial Buildings

Kind of Allowance Allowance Rate (in 

Percent)

Length of Period (in 

Years)

Australia SL 4.00 25 

Austria SL 2.50 40.00

Belgium SL 5.00 20.00

Canadaa DB 10.00 ufd

Chile SL 2.50 40.00

Czech Republicb DB 3.33 30.00

Denmark SL 4.00 25.00

Estoniac --- --- ---

Finland DB 7.00 ufd

France SL 5.00 20.00

Germany SL 3.00 33.33

Greece SL 4.00 25.00

Hungary SL 2.00 50.00

Iceland SL 6.00 16.67

Ireland SL 4.00 25.00

Israel SL 5.00 20.00

Italy SL 2.00 1.00

4.00 24.00

2.00 1.00

Japan SL 2.63 38.00

Korea SL 5.00 20.00

Latviac --- --- ---

Lithuania DB 25.00 ufd

Luxembourg SL 4.00 25.00

Mexico SL 5.00 20.00

Netherlands SL 2.50 40.00

New Zealandd --- --- ---

Norway DB 4.00 ufd

Poland SL 2.50 40.00

Portugal SL 5.00 20.00

Slovak Republicb SL 5.00 20.00

Slovenia SL 3.00 33.33

Spain SL 3.00 33.33

Sweden SL 4.00 25.00

Switzerland DB 8.00 ufd

Turkey SL 4.00 25.00

United Kingdome SL 2.00 50.00

United Statesf SL 2.46 1.00

2.56 38.00

0.11 1.00
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Sources: Spengel, et al. (2018), the Oxford University Centre for Business Taxation (2017), International 

Bureau of Fiscal Documentation Global Corporate Tax Handbook 2019, PwC Worldwide Tax Summaries, and

Ernst & Young Worldwide Corporate Tax Guide.

Notes: SL = straight-line; DB = declining-balance; ufd = until fully depreciated.

a. Depreciation is reduced by half in the first year (half-year convention). For assets other than machinery, 

Canada’s Accelerated Investment Incentive (AII) suspends the half-year convention and allows businesses to 

deduct three times what can be deducted in the first year under the half-year convention. (For an asset with a DB

rate of 10 percent, the first-year depreciation rate is 15 percent under AII.) The AII is phased out beginning in 

2024 and does not apply after 2027.

b. The Czech Republic and the Slovak Republic use either the SL method or an accelerated depreciation method. 

This accelerated method is a DB method that uses the same periods as the SL method. In the Czech Republic, 

assets are divided into 6 categories based on useful life. Machinery and equipment used in specified industrial 

processes are in category 3 and have a useful life of 10 years. Buildings other than office buildings, hotels, and 

shopping malls are in category 5 and have a useful life of 30 years. In the Slovak Republic, assets are also 

divided into 6 categories based on useful life. Machinery and equipment are in category 2 and have a useful life 

of 6 years. Certain buildings are in category 5 and have a useful life of 20 years. From 2015, accelerated 

depreciation is applicable only to assets in categories 2 and 3.

c. Estonia and Latvia tax distributed profits instead of corporate income.

d. From 2012, the allowance rate is 0 percent (3 percent prior to 2012) for buildings with an estimated useful life 

of 50 years or more. See also Inland Revenue (2019), General Depreciation Rates, IR265, April, available at 

https://www.ird.govt.nz/income-tax/income-tax-for-businesses-and-organisations/types-of-businessexpenses/depreciation (accessed May 16, 2022). 

e. Beginning in October 2018, a new Structures and Buildings Allowance applies to new nonresidential buildings 

and structures (excluding land). Under the Structures and Buildings Allowance, industrial buildings are 

depreciated on a SL basis at an annual rate of 2 percent. The new allowance applies to contracts for construction 

works entered into on or after October 29, 2018. From April 2011 through October 2018, no capital allowances

were allowed for buildings. 

f. The mid-month convention is used for nonresidential real property and residential real property. Under the 

mid-month convention, all property placed in service during a month is treated as placed in service at the midpoint of the month. This means that one-half of depreciation is allowed for the month that the property is placed 

in service. Assuming that the property is placed in service in the first month of the year, the SL depreciation rate 

is 2.461 percent in the first year, 2.564 percent in years 2 through 39, and 0.107 percent in year 40. 
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Table 8C. 2019 Tax Depreciation for Acquired Patents

Kind of 

Allowance

Acceleration 

Factor 

Allowance Rate 

(in Percent)

Length of 

Period (in 

Years)

Optimal 

Switching 

Time (in 

Years)

Australia SL 5.00 20.00 

Austria SL 10.00 10.00

Belgiuma SL 20.00 5.00

Canadab DB 25.00 ufd

Chile SL 16.67 6.00

Czech Republic SL 10.00 10.00

Denmarkc SL 14.29 7.00

Estoniad --- --- ---

Finland SL 10.00 10.00

France SL 20.00 5.00

Germany SL 20.00 5.00

Greece SL 10.00 10.00

Hungary SL 50.00 2.00

Iceland SL 20.00 5.00

Ireland SL 14.29 7.00

Israel SL 12.50 8.00

Italy SL 50.00 2.00

Japan SL 12.50 8.00

Korea SL 14.29 7.00

Latviac --- --- ---

Lithuania DB 66.67 ufd

Luxembourg SL 20.00 5.00

Mexico SL 15.00 6.00

10.00 1.00

Netherlands SL 10.00 10.00

New Zealandd SL 5.00 20.00

Norway SL 10.00 10.00

Poland SL 20.00 5.00

Portugal SL 10.00 10.00

Slovak Republicb SL 5.00 20.00

Slovenia SL 10.00 10.00

Spain SL 5.00 20.00

Sweden DB 30.00 ufd

Switzerland DB 40.00 ufd

Turkey DBSL 2.00 13.33 (DB) 15.00 8.00

4.55 (SL)

United Kingdome SL 10.00 10.00

United States SL 6.67 15.00
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Sources: Spengel, et al. (2018), the Oxford University Centre for Business Taxation (2017), International Bureau 

of Fiscal Documentation Global Corporate Tax Handbook 2019, PwC Worldwide Tax Summaries, and Ernst & 

Young Worldwide Corporate Tax Guide.

Notes: SL = straight-line; DB = declining-balance; ufd = until fully depreciated.

a. An additional special investment deduction of 20 percent applies in 2019.

b. Depreciation is reduced by half in the first year (half-year convention). For assets other than machinery

(including patents), Canada’s Accelerated Investment Incentive (AII) suspends the half-year convention and allows 

businesses to deduct three times what can be deducted in the first year under the half-year convention. (For an asset 

with a DB rate of 25 percent, the first-year depreciation rate is 37.5 percent under AII.) The AII is phased out 

beginning in 2024 and does not apply after 2027.

c. The acquisition cost of patents and acquired "know-how" may be deducted in the year of purchase or depreciated

over 7 years using the SL method.

d. Estonia and Latvia tax distributed profits instead of corporate income.
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Table 9. Economic and Other Parameters Assumed for 

OECD Countries

Real Rate of Return 5.00

Inflation Rate 2.00

Economic Depreciation Rate

 Machinery 17.50

 Industrial Buildings 3.10

 Acquired Patents 15.35

 Inventories 0.00

Proportion of New Investment Financed with:b

 Equity (and Retained Earnings) 65.00

 Debt 35.00

Sources: Devereux, et al. (2008) and Spengel, et al. (2018). 

a. The same economic parameters are assumed for all OECD countries so 

that any differences in effective tax rates reflect differences in tax regimes.

b. The overall effective marginal tax rates in Table 1 and Table 4 are 

calculated using the difference between an average cost of capital across 

type of asset (machinery, industrial buildings, inventories) and type of 

finance (retained earnings, debt, equity) and an after-tax real rate of return. 

Devereux, et al. (2008) use a combined weight of 65 percent for equity

and retained earnings and a weight of 35 percent for debt. 

Devereux, Michael P., Christina Elschner, Dieter Endres, Jost H. 

Heckemeyer, Michael Overesch, Ulrich Schreiber, and Christoph Spengel, 

2008, “Project for the EU Commission,” TAXUD/2005/DE/3 10, Final 

Report, available at

http://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.353.2752&rep=

rep1&type=pdf (accessed May 16, 2022). 
U.S. Department of the Treasury 

Office of Tax Analysis

February, 2020

21 

19.0

25.9

26.8

27.8

29.7

29.9

32.0

28.0

0 5 10 15 20 25 30 35

United Kingdom

United States

Canada

Italy

Japan

Germany

France

G-7 Average Excl. U.S.

Figure 1. 2019 Effective Statutory Profit Tax Rate (in Percent)
U.S. Department of the Treasury 

Office of Tax Analysis

February, 2020

22 

19.0

17.6

23.9

26.9

21.9

20.4

37.0

25.0

9.7

15.3

15.5

16.7

16.9

18.9

26.1

18.6

0 5 10 15 20 25 30 35 40

Canada

Italy

United Kingdom

United States

France

Germany

Japan

G-7 Average Excl.

U.S.

Figure 2. 2019 Overall G-7 Effective Marginal Tax Rates (in Percent)

Without Property Taxes and Net Wealth Taxes

With Property Taxes and Net Wealth Taxes
U.S. Department of the Treasury 

Office of Tax Analysis

February, 2020

23 

20.6

24.4

26.2

24.7

26.9

28.8

32.6

27.2

18.0

22.1

23.1

24.1

26.5

27.5

28.5

25.2

0 5 10 15 20 25 30 35 40

United Kingdom

Canada

United States

Italy

Germany

France

Japan

G-7 Average Excl.

U.S.

Figure 3. 2019 Overall G-7 Effective Average Tax Rates (in Percent)

Without Property Taxes and Net Wealth Taxes

With Property Taxes and Net Wealth Taxes
U.S. Department of the Treasury 

Office of Tax Analysis

February, 2020

24