Do the biggest firms pay the lowest corporate taxes?

Corporate taxes are a major source of government revenue. Yet nominal tax rates only tell part of the story. New evidence from firm-level tax return data across 16 countries in Africa, Latin America, and Europe shows that the largest firms consistently pay lower effective tax rates than other firms, and the reasons lie closer to home than is commonly assumed. Much of this gap comes not from offshore tax havens, but from preferential treatment built into national tax systems. This matters as the global minimum tax takes effect. The evidence suggests that national reforms may do more to close these gaps. Across 16 countries, the largest 1% of firms by revenue pay effective rates 2.2 percentage points below other large firms, driven by tax credits and special economic zone provisions On average, 28% of the top 1% of firms face effective tax rates below 15% despite statutory rates at or above that level. Among those firms, the average effective rate is just 3.1% A 15% domestic minimum tax on the top 1% of firms could raise corporate tax revenue by 14.2% on average, and by around 9% in South Africa The OECD global minimum tax would raise less than 0.3% of corporate tax revenue in South Africa, a figure that should be read as a lower bound