Taxation trends and comparative analysis of tax systems in developed economies

The evolution of tax models: the pressures of time and global trends

Over the past ten years, the tax system in advanced economies has undergone significant transformations caused by the simultaneous impact of several factors: the digitalization of business, globalization, the accelerating climate crisis, the tightening of the competitive environment, as well as the growth of inequality and social tension.

The COVID-19 pandemic and the subsequent energy shock have increased fiscal pressure on the budgets of developed countries, which has led to an accelerated revision of tax policy. States have sought not only to stabilize revenue, but also to adapt tax systems to new forms of activity, including the digital economy, remote employment, and global supply chains.

The international initiative BEPS 2.0, promoted by the OECD, has become the first large-scale step towards modernizing international tax rules. It involves the redistribution of taxation rights for the largest multinational corporations and the introduction of a global minimum tax of 15%, measures designed to reduce the erosion of the tax base and reduce harmful competition between jurisdictions.

At the same time, EU countries, Canada, Japan, the United Kingdom and the United States are actively experimenting with environmental and digital taxation, increasing their focus on sustainable development and monitoring the activities of BigTech companies. Against this background, the trend towards increasing tax transparency is intensifying: mechanisms for the automatic exchange of financial information are being developed, rules for disclosure of information about beneficiaries are being tightened, and anti-Russian and anti-Chinese tax compliance standards are being applied.

At the same time, countries' tax regimes are becoming more instrumental: they are used to support certain industries, stimulate investment in R&D and the "green" economy, as well as to attract capital. In these circumstances, it is the comparative analysis of tax systems that is of critical importance for businesses, investors and states.

The purpose of this review is to present current trends in tax policy in the G7 and OECD countries, compare key parameters of tax systems and identify strategic risks and opportunities for the business environment in the next 5-10 years.

Global trends in tax policy in developed countries

1. Eliminating tax base erosion: BEPS 2.0 and the global minimum

One of the key initiatives defining current trends in tax policy is the development of the BEPS (Base Erosion and Profit Shifting) program, coordinated by the OECD and the G20. In 2021, more than 135 countries signed an agreement to introduce a global minimum tax of 15% for multinational corporations with revenues over €750 million. This measure is aimed at combating aggressive tax planning, in which profits are moved to low-tax jurisdictions, regardless of the place of value creation.

As a result, the G7 countries began synchronized preparation of tax legislation for the new conditions. Germany, France, and Italy have already made the relevant amendments to national law, while the UK and Canada are discussing adaptation mechanisms for 2025–2026.

For businesses, this means fewer opportunities for tax optimization through offshore companies, higher compliance costs, and a review of international holding structures.

2. Digital taxation: pressure on BigTech

The digital services sector remains one of the most challenging categories for traditional taxation. In response to the cross-border activities of companies such as Google, Meta, Amazon, and Apple, a number of European countries have introduced digital services taxes:

France introduced a 3% tax on revenue from digital transactions back in 2019.
Great Britain, Italy and Austria followed a similar path.
In the United States, the idea of a digital tax has faced active business resistance, but within the framework of BEPS 2.0, a separate mechanism for redistributing taxation of digital giants in favor of user countries is being discussed.

For businesses, such innovations entail a review of monetization models in global platforms, increased tax risks for the IT sector, and a transition to complex tax reporting in jurisdictions of presence.

3. Increased transparency and crisis management

Modern tax policy is aimed at increasing transparency and preventing tax evasion. The introduction of standards for the automatic exchange of tax information (CRS, FATCA), the expansion of beneficial owner registers, and Country-by-Country Reporting (CbCR) mechanisms have become the norm for developed jurisdictions.

New EU regulations (Directive DAC7 and DAC8), which come into force in 2025-2026, require digital platforms to disclose information about sellers and transactions in real time. Similar regulations are being considered in Japan and Canada.

For businesses, such innovations entail an increase in the cost of tax support, the risks of income reclassification and sanctions for incorrect disclosure.

4. "Greening" of tax systems

The global climate agenda is driving tax changes towards environmentally-oriented mechanisms. The EU has implemented CBAM (Carbon Border Adjustment Mechanism), a cross—border carbon tax on imports that meets the EU's internal standards on CO₂ emissions:

Germany and France are increasing domestic carbon taxes.
Canada is developing a Carbon Pricing program.
Japan plans to introduce a full-fledged carbon tax system by 2030.

As a result, companies now need to take into account ESG factors in supply chains, rising export costs, especially to EU countries, and sustainability reporting requirements.

5. Reconfiguration of tax benefits and fiscal incentives

Against the background of high inflation and unstable macroeconomics, governments are reviewing their approaches to tax incentives. The focus is shifting to:

Maintaining investments in scientific research (R&D Tax Credits);
benefits for small and medium-sized businesses;
tax cuts for the "transition to a green economy."

In particular, Ireland, Sweden and South Korea demonstrate the greatest efficiency in applying incentive taxation for the development of high-tech clusters.

Summary of global trends

Modern tax systems are in a period of rapid adaptation. They no longer capture profits and consumption as much as they manage business behavior, guiding it towards digitalization, environmental friendliness and transparency.

Comparative analysis of tax systems in developed countrie

Approach to analysis

To assess the attractiveness and sustainability of tax systems in developed economies, the key fiscal parameters of seven G7 member countries, as well as Ireland and South Korea, as jurisdictions with pronounced tax policy features, were compared.

The focus of the comparison:

basic corporate tax rates;
VAT and its equivalents;
social contributions (at the employer level);
tax burden on individuals and dividends;
existence of digital or environmental taxation;
existence of fiscal incentives for small businesses and innovation.

Key parameters of tax systems in developed countries

Table 1. Key parameters of tax systems in developed countries (as of 2024)

Country	Corporate income tax rate	Value added tax (or equivalent)	Employer social security contributions	Taxation of digital services	Environmental taxes and carbon adjustment	Fiscal incentives for small businesses and R&D
Germany	29,9%	19%	20-22%	Not present	In action	Actively used
France	25%	20%	45%	Introduced (3%)	In action	Well developed
Italy	24%	22%	30-35%	Introduced	Gradually being implemented	Limited measures
USA	21%	Not present	7–10% by state	Not present	Under discussion	At the state level
Canada	26,5%	5% + provincial	10-12%	Not present	In action	Strong tax credits
United Kingdom	25%	20%	13,8%	Introduced (2%)	Under development	In action
Japan	30,6%	10%	Around 15%	Not present	Partially implemented	Developed incentives
Ireland	12,5%	23%	10-11%	Not present	Under discussion	Actively used
South Korea	22%	10%	8-10%	Not present	Partially implemented	Active support

Source: OECD Tax Statistics, PwC Tax Summaries, EY Global Tax Guides, KPMG Insights 2024

Germany

One of the most fiscally “heavy” systems for business, especially due to the high aggregate rate (almost 30%) and social contributions. However, the country offers powerful R&D incentives, especially in mechanical engineering and pharmaceuticals. Supports the CBAM initiative and is strengthening environmental taxes.

France

Leader in terms of total tax burden, including on wages and dividends. Actively reforming tax policy: reducing the corporate income tax rate (from 33% to 25% over 5 years), introducing a digital tax, and strengthening climate taxation.

Italy

Provides targeted incentives for specific industries, but is known for its complex administration and high level of informal sector activity. A tax on digital services was introduced in 2023. Slow progress on climate issues.

United States

Remains one of the most favorable jurisdictions for business among the G7 in terms of tax rates, but tax regulation varies greatly from state to state. There is no federal VAT, digital tax, or CBAM, but discussions are ongoing. Many tools are available at the state level (R&D credits, Innovation Zones).

Canada

An example of a balanced system: moderate rates, a powerful system of refunds and tax credits, especially in the knowledge-intensive sector. There is a federal environmental tax, partially compensated to households.

United Kingdom

Following Brexit, the United Kingdom is reforming its tax system: returning to a 25% income tax rate, introducing a digital tax, but offering generous incentives for R&D and investment. It is discussing the integration of a CBAM-like mechanism in the context of trade with the EU.

Japan

One of the most “traditional” and complex systems for doing business. The high tax burden is compensated by powerful programs financing technology sectors. Actively introducing elements of “green” taxation.

Ireland

The most well-known low-tax jurisdiction, attracting technology corporations. After signing BEPS 2.0, it moved to a new format: a minimum rate of 15% only for international companies, 12.5% for all others. A developed system of incentives for R&D and small businesses.

South Korea

Combines moderate rates with tax credits for IT companies and industry. One of the leaders in stimulating digital transformation and “smart” manufacturing through fiscal measures.

Summary of taxation systems

There is no universal “ideal” tax regime: each country develops its policy based on the structure of its economy, international obligations, and fiscal priorities.

Differentiation is growing: jurisdictions with high fiscal burdens (France, Germany, Japan) versus countries with flexible or incentive-based models (Ireland, Canada, South Korea).

A new pressure factor is emerging — ESG and digital activity: countries are beginning to compete not only on tax rates, but also on sustainability and digital reporting standards.

New forms of taxation: from carbon to data

Alongside traditional taxes (on profits, consumption, labor), developed economies are increasingly applying new types of fiscal mechanisms that reflect the transformation of the global agenda: digitalization, sustainable development, data protection, and technological sovereignty.

1. Digital taxation: taxes on virtual value

Traditional tax systems are focused on the actual presence of businesses. However, the growth of global platforms, data monetization, and remote services have called into question the applicability of old models. In response, countries have begun to introduce special digital taxes (Digital Services Tax, DST):

France — 3% on revenue from digital operations (search advertising, marketplaces, social networks);
United Kingdom — 2% on profits from UK users;
Italy, Spain, Austria, India — similar taxes with a differentiated base.

Figure 1. Digital services tax rates in Europe

It is expected that from 2025, as part of the second "pillar" of BEPS 2.0, uniform rules for the taxation of digital giants will come into force, based not on actual locatio but on the place of consumption.

Actual significance: businesses will have to take into account the “audience tax” and implement targeted financial reporting in jurisdictions without a actual office.

2. Carbon taxation and CBAM

In the wake of the climate agenda, fiscal mechanisms are acquiring the function of environmental regulation. The transition period of the CBAM (Carbon Border Adjustment Mechanism), a cross—border adjustment of carbon emissions, has begun in the European Union since 2023. The mechanism obliges importers to pay an "equivalent" carbon tax, similar to the EU's internal regulations.

CBAM covers:

steel, aluminum, cement, fertilizers, electricity;
from 2026 — reporting with mandatory payments.

Outside the EU:

Canada — already implementing carbon pricing by economic sector;
Japan and South Korea — introducing carbon taxes for domestic consumption;
the US — discussing a “green tariff” as part of the Green New Deal initiative.

As a result of such taxation, exporters to the EU will have to take into account the carbon footprint of their products and factor additional costs into their prices. This affects the choice of suppliers, logistics, and energy sources.

3. Taxation of data and attention

A new horizon—taxes on intangible assets: user data, time, algorithmic models. Specifically:

The EU is discussing a data tax mechanism: taxation of companies that profit from users' personal data without a physical presence.
In Japan and South Korea, measures are being considered to equate large volumes of user data with an asset that requires declaration.
In the US, experts are proposing a tax on algorithmic influence as a form of indirect regulation of digital monopolies.

Although these initiatives have not yet been fully implemented, they are shaping a new paradigm for the taxation of intangible assets.

4. Exotic and experimental fiscal models

A number of countries are experimenting with taxation of atypical resources and the consequences of technological progress:

Robot tax (South Korea, EU): discussed as a way to compensate for the social costs of automation.
Artificial intelligence tax: considered as an additional burden on large AI platforms (proposed in the EU).
Urban taxes: introduced in the UK and the Netherlands (e.g., on “underutilization of office space” in the post-COVID period).

Summary of new forms of taxation

The fiscal system is becoming a tool for managing behavior, not just a means of collecting funds.
Businesses are faced with the need to predict fiscal risks in the intangible sphere — from data to emissions.
New taxes are not being introduced on the basis of “high rates,” but rather on the principle of targeted action — on audiences, emissions, algorithms.

Risks, barriers, and opportunities for business in the new tax reality

New risks: tax complexity as a factor of instability

Modern tax policy in developed countries is no longer exclusively a fiscal mechanism—it is becoming an instrument of structural change, and thus a source of both opportunities and threats.

Businesses are facing a number of new risks:

Increased overall burden: despite moderate nominal rates, the combined effect of corporate tax, social security contributions, VAT, CBAM, and digital levies is placing a heavy burden on multinational companies in particular.
Regulatory fragmentation: unlike in previous decades, when jurisdictions followed the OECD and the EU, there is now increasing diversity in rules (e.g., digital tax is being introduced unilaterally and at different rates).
Double taxation: in the absence or ineffectiveness of agreements, conflicts arise between jurisdictions over the distribution of the tax base.
Increased responsibility: In the EU and the UK, there are an increasing number of cases where top management is responsible for the tax transparency of groups (including CbCR and ESG reporting).
Publicity effect: companies are forced not only to pay taxes, but also to demonstrate “tax fairness” under pressure from the media, shareholders, and consumers.

Structural barriers: intransparency, costs, adaptation

Even with a high level of digitalization, the tax systems of developed countries retain elements of intransparency and fiscal complexity.
Reporting mechanisms for digital tax, CBAM, and R&D incentives vary in form, timing, and procedures, which increases the demands on legal and accounting departments.
High cost of tax support: large companies spend up to 3–5% of their revenue on compliance.
Frequent rule changes: as part of the “green transition” and digital regulation, legislative norms are updated annually, requiring continuous monitoring.

Opportunities: fiscal policy as a strategic tool

Despite the pressure, the changing tax landscape opens up a number of tactical and strategic opportunities:

Jurisdictional flexibility: companies can optimize their holding structures by transferring functions to countries with developed tax agreements, incentive regimes, and stable legal systems (e.g., Ireland, Canada, Singapore).
Use of R&D incentives: France, Canada, South Korea, and the UK offer tax deduction and subsidy programs for the innovation sector, reducing the tax base by 20–40%.
Integration of tax strategy into ESG profile: Demonstrating “responsible taxation” can increase investor and consumer loyalty (especially for public companies).
Influence through associations: participation in industry alliances and dialogue with the government allows you to influence the form of new taxes — especially in matters of data, digital assets, and carbon.

Summary of risks, barriers, and opportunities

The risk of “fiscal avalanche” is a key challenge for the next decade.
Businesses that view taxation as part of their corporate strategy rather than an accounting function gain a competitive advantage.
Those who can not only reduce rates but also manage tax risk as an asset will prevail.

Forecasts and scenarios for the development of tax systems for 2025–2030

The global fiscal landscape is restructuring. Over the next decade, the tax systems of developed countries are likely to be transformed under pressure from four key drivers:

digitalization of the economy;
climate transformation;
redistribution of global influence;
demographic and social shift.

Scenario 1: Convergence — unification of global taxes

Probability: high

Factors	Possible consequences
Entry into force of the second “pillar” of BEPS 2.0 (global minimum tax).	Increased global predictability
Expansion of international agreements on digital taxation (at the OECD and G20 levels).	Simplification of international business structuring
Introduction of cross-border fiscal mechanisms (CBAM, environmental levies, digital VAT).	Decreased offshore attractiveness of small jurisdictions

Scenario 2: Fragmentation — increased tax protectionism

Probability: medium

Factors	Possible consequences
Discrepancies between the legal systems of the US, EU, and Asia.	Increased fiscal risks and double taxation conflicts.
Increase in the number of bilateral tax conflicts (especially regarding digital and carbon taxes).	Increased cost of cross-border business.
Protectionist measures: preferences for local production, tax restrictions on transfers.	Renewed interest in localizing value chains.

Scenario 3: Targeted fiscalization — taxes as a regulator of behavior

Probability: very high

Factors	Possible consequences
Active introduction of targeted taxes: on emissions, energy consumption, AI, data processing.	Increased dependence of business on fiscal policy.
Linking tax rates to the ESG profile of a company or industry.	Growing need to forecast changes in the regulatory environment.
Using tax mechanisms to achieve climate and technological goals (e.g., tax breaks for green investments).	Transition to a “tax as a strategic indicator” model.

Strategic business adaptation

To ensure sustainable operations in a changing environment, companies will need to:

Develop tax analytics at the strategic level.
Implement scenario planning for tax burdens with a 5–10-year horizon.
Use tax agreements and explanatory dialogue mechanisms (e.g., Advance Pricing Agreements in the EU and Canada).
Integrate tax strategy into corporate ESG reporting and investor relations.

Conclusions and recommendations

Tax policy as a strategic business environment

In today's environment, taxation is becoming not just a tool for replenishing the budget, but a key factor in the structural transformation of the economy. It reflects global challenges, from digitalization and climate change to increased competition between jurisdictions.

Developed countries are demonstrating a shift toward an instrumental type of tax policy, in which taxes are used to manage business behavior, stimulate desired industries, and redistribute global profits. At the same time, fiscal mechanisms are increasingly affecting intangible assets, transnational flows, and new forms of digital activity.

For companies, this means the need to revise the traditional approach to tax planning. Competitiveness in 2025–2030 will increasingly be determined not by the nominal rate, but by the flexibility of the tax architecture, the transparency of reporting, the quality of internal analytics, and the ability to adapt to changing conditions.

Key findings:

The tax burden in developed countries is shifting toward the digital and environmental spheres.
Global fiscal agreements (in particular BEPS 2.0) are increasing pressure on transnational structures.
Tax transparency is becoming part of corporate image and influencing access to investment.
Successful businesses are shifting from reactive to proactive tax management.