About the indicator

When a country chooses not to tax capital gains multinational corporations make from selling domestic or foreign financial securities, such as shares or bonds, multinational corporations can underpay tax by setting up a holding company in that country to own shares in its own affiliates. Tax havens actively seek to attract such holding companies with low or zero tax rates, which may lead other countries to reduce their own rates in a race to the bottom. This indicator assesses if the country taxes corporate capital gains for large, resident, for-profit corporations on the disposal of domestic and foreign securities. It examines the lowest available tax levied on corporate capital gains in the country compared to the highest available rate in a democracy.