This Discussion Paper is the English version of: Beznoska, M., von Haldenwang, C., & Schüler, R. M. (2022). Steuervergünstigungen in den OECD-Ländern. Erkenntnisse aus der Global Tax Expenditures Database (originally published in German).
The Global Tax Expenditures Database (https://GTED.net/) collects national reports on tax expenditures for 101 countries for the period from 1990 to the present. Based on these data, the development of tax expenditures in the 38 OECD countries between 1999 and today is examined. A look at the data shows that even in countries with high GDP and comprehensive tax coverage, reporting is often incomplete. For a subset of 16 OECD countries for which (relatively) continuous reporting over the period is available, we look at the development of tax benefits for households and firms. We can show that data availability improves over time. For the development of business tax expenditures, a weakly significant positive trend can be identified in terms of tax revenues foregone, driven mainly by the Netherlands and Ireland. Both countries are known for wanting to strengthen their business location through generous tax expenditures for businesses. Tax expenditures for private households, which are on average higher than the level of tax expenditures for businesses in the countries under review, do not show any significant time trend, even though they were increasingly used to relieve the burden on private households and businesses during the financial crisis of 2008/09. In order to compare tax expenditures between countries and to better assess their effectiveness, regular reporting at the national level, transparent definitions and ideally uniform standards would be helpful. Regular monitoring by a commission of experts could contribute to the consistency and comparability.
Against this backdrop, the GTED marks the first time national reports on tax expenditures have been brought together in one database. Compiling the data and transferring them into a single system shows that even under the current conditions there are ways to analyse tax expenditures from a comparative perspective, though the GTED also shows how inconsistently tax expenditures are recorded. As a matter of fact, a relatively large number of reports are available for OECD member states and they tend to cover longer periods of time than for other groups of countries.
Read the full Discussion Paper.