Tax Foundation releases the International Tax Competitiveness Index 2026 ranking OECD tax codes

Tax Foundation released the 2026 International Tax Competitiveness Index, ranking how well member nations structure their tax codes to encourage investment and economic growth. The report evaluates tax systems across the Organisation for Economic Co-operation and Development, looking at more than 40 tax policy variables to measure competitiveness and neutrality. According to Tax Foundation, tax policy has increasingly drifted away from raising government revenue and into trade disputes, with import tariffs and digital service levies deployed to exert economic pressure. Austria has reduced its corporate income tax rates by several percentage points while countries like France, the Slovak Republic, and Slovenia have increased them. Corporate tax base improvements have occurred in Canada, Germany, Lithuania, the United Kingdom, and the United States, while the corporate tax base has been made less competitive in the Czech Republic and Slovenia. Germany and Finland are phasing out temporary improvements to their corporate tax bases that Lithuania, the United Kingdom, and the United States have made permanent and expanded. A competitive tax code keeps marginal effective tax rates low because capital is highly mobile and businesses choose to invest in countries offering the highest after-tax rate of return. High marginal tax rates drive investment elsewhere and lead to slower economic growth. Corporate taxes are the most harmful for economic growth, while personal income taxes and consumption taxes are less harmful, and immovable property taxes have the smallest impact. As tax laws become more complex, they become less neutral by allowing large businesses to gain tax advantages. For your business, shifting tax rates and tax bases across borders dictate where capital flows and how supply chains operate. Keep an eye on global tax changes before planning your next overseas investment.