Why corporate income tax is the most critical of all taxes

Why corporate income tax is most critical

Last updated: August 2026

Why corporate income tax is the most critical of all taxes

At the Fair Tax Foundation, we’re often asked why corporate income tax is such a major focus of our work. After all, corporate tax is just one of a number of taxes that business pays.¹

In our opinion, no other tax borne or collected by business comes close to having so many positive impacts. Corporate tax is much more than a revenue raiser for public services. It is crucial to fair business competition, improved national productivity and reduced inequality.

This isn’t to say that other taxes are unimportant. They are really important. But corporate income tax is in a class of its own for the five reasons set out below. ²

Corporate tax is an increasingly crucial source of revenue to governments across the world
Corporate tax avoidance is a clear and present significant problem
Corporate tax dodging reduces national productivity
Corporate tax conduct is a key performance indicator for many investors
Corporate tax is a progressive tax and is crucial to reducing inequality

Responsible businesses are proud to pay their fair share of tax and appreciate what they receive in return.

As the World Bank points out:

quality infrastructure is critical for the sound functioning of an economy and plays a central role in determining the location of economic activity and the kinds of sectors that can develop;
a healthy workforce is vital to an economy’s competitiveness and productivity; and
a basic education increases the efficiency of each worker, while good-quality higher education and training allow economies to move up the value chain beyond simple production processes and products.³

1. Corporate income tax is an increasingly crucial source of revenue to governments across the world

– The contribution of corporate tax revenues to overall tax revenue is large

The OECD’s Corporate Tax Statistics 2026 (July 2026) reports that the global contribution of corporate tax revenues is 17.3% of all tax revenues raised.⁴ This is the second highest percentage contribution recorded since OECD analysis commenced in 2000, when it stood at 12.3%. Albeit, a slight fall on the 17.8% high of the previous year.

The contribution made by corporate tax is even higher in Africa, Asia & Pacific and Latin America & the Caribbean, where they account for 21.4%, 19.5% and 18.7% of tax raised respectively.⁵ In 25 countries, corporate tax revenues make up more than a quarter of total tax revenues; in ten, it accounts for more than 40%. In related disclosures, the OECD is also reporting that the average tax-to-GDP ratio for Africa has risen for the third consecutive year, and that this increase was driven by higher revenues from corporate income tax for a second consecutive year.⁶

The US is a significant outlier among OECD nations, with corporate tax revenues the equivalent of just 2.2% of gross domestic product. This is substantially lower than the OECD average of 3.8%. Other OECD outliers include Estonia and Latvia, which have no meaningful corporate income tax.⁷

– The race to the bottom on corporate tax rates has ended

The average global corporate tax rate in 2026 remained steady at 21.2%, where it’s pretty much been since 2020. For the third year running, more jurisdictions increased their rate (four – Korea, Lithuania, Morocco and San Marino) than decreased it (three – Cabo Verde, Honduras and Portugal).⁸

The global race to the bottom on headline corporate income tax rates that took place over recent decades looks to have ended, with hints that it may even be reversing. The advent of the 15% global minimum tax seems to be helping, not hindering, this reverse. However, the global average is still some way behind the 28% that it was at the turn of the century; and, in 2026, 11 jurisdictions still had no corporate tax regime or had a headline rate of zero.

“Corporate income tax contribution across the world remains at near-record levels this century”

2. Corporate tax avoidance is a clear and present significant problem

– Corporate tax avoidance remains substantive across much of the world

Researchers from the University of California and the University of Copenhagen estimate that across the globe, 36% of multinational profits (US$1trn) are artificially shifted to tax havens each year, leading to a US$226bn reduction in corporate income tax revenue.⁹,¹⁰

But tax avoidance and evasion are by no means confined to large multinational enterprises. HMRC have estimated that in the UK, the corporate tax gap for small businesses now amounts to £17.3bn, and that small businesses are responsible for 62% of all shortfalls (i.e., £36.7bn across all taxes). We detail this in our Tackling Small Business Tax Avoidance Information Hub.

In 2025, the EU released its first estimate of Europe’s corporate tax gap. This was calculated to be 11% of collected corporate income tax revenues across 23 EU states, ranging from Denmark at 3% to Romania at 35%. High-gap sectors included construction, accommodation and food services, and wholesale/retail trade, where informality and cash transactions are more prevalent, and third-party reporting is limited.¹¹

Like many, we believe profits should be taxed in the jurisdiction where underlying value is created (i.e., where the economic activities to generate those profits are carried out). However, as the OECD points out: “the current international tax rules still allow large multinationals to earn significant income in a jurisdiction without paying corporate income tax there. New business models that rely heavily on intellectual property have made it easier for multinationals to shift profits to low-tax jurisdictions. Globalisation has exacerbated unhealthy tax competition.”¹²

– Base erosion and profit-shifting by multinationals has reduced, but remains significant

In recent years, OECD analysis has been more upbeat around the curtailment of aggressive tax avoidance by multinationals. Back in 2023, they emphasised that “the data continues to point to the existence of base erosion and profit shifting… and continues to show a misalignment between the location where profits are reported and the location where economic activities occur.” But in 2025, they draw attention to how the data suggested “modest reductions in base erosion and profit shifting in recent years”.¹³ However, in 2026, the tone has become more downbeat: “The data suggest modest increases in high-level indicators of base erosion and profit shifting in recent years, though indicators are still below earlier levels. While these indicators could reflect continuing BEPS behaviour, these data may be affected by turbulence in the global economy during high inflation periods during 2023. All these indicators remain far higher in investment hubs relative to other jurisdictions, pointing to the continued existence of BEPS activity.”¹⁴

– Cause for cautious optimism

Two trends seem to be playing out. First, governments have broadened the base to which corporate tax applies and have clamped down on tax avoidance, which has driven up payments as a percentage of all taxes raised. Second, the race to the bottom on the headline rate of tax seems to have ended. This is to be celebrated.

Only a few years ago, it was not unusual to hear business commentators happily predict the demise of corporate income tax. However, such talk is now rare in mainstream conversations given the enormous sums of money it raises across the world.

For example:

Fair Tax Mark certified businesses alone contribute some £4.1bn / €4.8bn annually
profit taxes made up 53% of all taxes borne by large multinationals headquartered in Europe¹⁵
in the UK, corporate income tax contributes more than £100bn per annum¹⁶

However, there is no room for complacency. Further improvements are by no means guaranteed. The Trump administration in the US is doing its utmost to unwind recent progress, with attacks on: the very idea of a corporate global minimum tax¹⁷; and, the improvement of long-discussed FASB corporate tax transparency standards¹⁸. Albeit, to date, both are still rolling out and are having a substantive, positive impact.

3. Corporate tax dodging reduces national productivity

Aggressive tax avoidance and evasion negatively distorts national economies and undermines the ability of businesses to compete fairly, both domestically and internationally.

An IMF Blog argues that tax evading corporate ‘cheats’ enjoy a potentially large implicit subsidy that allows them to stay in business despite low productivity. As a result, these ‘cheats’ gain market share even if they are less productive, reducing the market share of more productive, tax compliant businesses.

They go on to estimate that in emerging market and low-income developing countries, closing the productivity gap between tax-compliant firms and cheats would add ½ to 1 percentage points to aggregate productivity.

Other researchers have similarly concluded that the productivity gaps between firms that comply with existing taxes and regulations and those that do not are significant, and that these large gaps can translate into low economy-wide productivity and growth.¹⁹

Furthermore, it has been convincingly argued that, via its very nature, corporate income tax bolsters good corporate governance:

The regular furnishing of information to tax authorities in corporate tax returns curtails the opportunity for malicious insiders to engage in fraud and divert wealth illegitimately away from external shareholders – the probability of detection is increased as is severity of punishment.
As a profit tax, corporate income tax helps mitigate the pressure on management to inflate reported income.
Corporate tax disclosures improve the quality of financial reports available to shareholders.
Strong corporate income tax enforcement reduces fraudulent diversion and can raise the stock market value of a company, despite a potential increase in tax costs²⁰

However, keeping tax rates at a fair and reasonable level is crucial to the development of a thriving, diverse private sector and the formalisation of business. Corporate tax reliefs can also be used to incentivise investment in public goods – for example, enhanced capital allowances and tax depreciation for renewable energy.

4. Corporate tax conduct is key performance indicator for many investors

Many institutional investors, asset managers and ratings agencies view corporate tax avoidance as a material key performance indicator. To some, it is ‘red flag’ for an overly aggressive attitude to general compliance and poor corporate governance. They recall the collapse of the likes of Credit Suisse after they confessed to material weaknesses in financial reporting, and recall the long history of tax controversies that preceded this. To others, corporate tax avoidance is a major stumbling block to the delivery of the UN Sustainable Development Goals.

Progressive investors understand that tax controversies lead to increased stock price volatility.²¹ They not only oppose tax cloaking²², but are highly supportive of new rules that require large multinationals to provide a country-by-country breakdown of the corporate income tax paid around the world, as we explain in our Key Performance Indicators of responsible corporate tax conduct – and their green and red flags.

Examples include:

The world’s largest sovereign wealth fund, Norges Bank Investment Management, have set out the ways in which they expect investees to exhibit ‘appropriate, prudent and transparent tax behaviour.’²³
The voting and engagement guidelines of the UK’s default auto enrolment pension scheme, Nest, encourage Fair Tax Mark accreditation²⁴, as do the Fair Reward Framework²⁵, ShareAction²⁶, Epworth Investment Management and Ethical Screening
Numerous Danish pension funds and foundations, led by ATP, Industriens Pension, PensionDanmark and PFA, are signatories to a Joint Tax Code of Conduct, which seeks to influence corporate tax behaviour in Denmark and at an international level²⁷
The Dutch Association of Investors for Sustainable Development, VBDO, have produced ‘Tax: An Investor Guide’, which advocates a series of corporate income tax KPIs for integration into investment decision-making that closely match those previously suggested by the Fair Tax Foundation.²⁸ Triodos Bank are Fair Tax Mark accredited, and have been commended for the manner in which they apply responsible tax conduct to both their operations and investments
Shareholders for Change, an association of European institutional investors, has identified corporate income tax conduct as a priority issue for active engagement²⁹
Outside Europe, La Caisse (Canada)³⁰, Columbia Threadneedle (US)³¹ and Federated Hermes (United States)³² are all active on corporate income tax
Two of the world’s largest ESG rating agencies, MSCI³³ and S&P Global³⁴, identify corporate income tax as key issues
The Principles for Responsible Investment argue: “It is in investors’ interest to ensure that corporate taxes contribute to stable, well-functioning socioeconomic systems that are conducive to achieving investment returns and the Sustainable Development Goals. Aggressive tax planning creates reputational, governance and earning related risks. Heightened scrutiny from tax authorities and policy makers around corporate tax following the COVID-19 pandemic and global efforts to combat tax avoidance are only exacerbating those risks.”³⁵

Corporate income tax is at the centre of the call for more tax transparency. Already, international financial reporting standards rightly urge that the overall corporate tax charge is detailed in financial statements, together with an explanation of its major components.³⁶ However, the Fair Tax Foundation, the Principles for Responsible Investment and many others believe multinational enterprises should provide tax transparency on a country-by-country basis in order that stakeholders can better determine that a business is paying the right amount of tax, in the right place and at the right time. Governments are also increasingly in agreement.

Legislative developments in Europe and Australia, and accounting developments in the US, will ensure that the year 2026 will be a breakthrough year for corporate public Country-by-Country reporting – when there will be a cascade of corporate tax transparency from thousands of large multinationals, based on data from 2025 and accounting preparations undertaken in 2024. For more details see our Public Country-by-Country Reporting Information Hub.

A fifth of investors cite tax transparency and responsibility as one of the most important non-financial factors when evaluating companies, placing tax transparency almost at par with other sustainability topics such as health, safety, and well-being.³⁷

5. Corporate tax is a progressive tax and is crucial to reducing inequality

Corporate tax helps prevent the undue concentration of wealth and ensures a more equitable distribution of the tax burden among individuals and businesses.

The World Bank has observed that corporate tax acts as an important backstop to personal income tax, given it limits the scope for tax avoidance by individuals who might otherwise have a strong incentive to incorporate so as to escape personal income tax and shelter wealth.

It is also administratively simple to collect and is ‘progressive’ – as richer households will ultimately bear more payments than poorer households.³⁸

Who exactly bears the cost of corporate tax is the subject of heated debate. Over-zealous adherents to Laffer Curve theory will claim that customers and employees bear a large part of the cost of corporate income tax, and that cuts will automatically lead to lower prices, higher wages and a substantial boost in investment.

But real-world studies don’t bear this out: in fact, many indicate that substantial investment boosts rarely materialise and that shareholders are largely the beneficiaries (and that these are concentrated in higher personal income groups).³⁹ Although it is indisputable that very high rates of corporate income tax will have a material impact on investment decision making by business, as we explore in Beware the pseudo-science of low-tax zealots.

Corporate tax acts as a backstop, ensuring that substantial tax is paid by business owners who otherwise might not pay personal income tax. The Wall Street Journal recently reported that corporate income tax was The Tax That Billionaires Actually Pay.

This followed research that found that corporate tax accounted for 46% of the tax paid by the US’s richest 100 individuals. Moreover, after the US cut corporate tax in 2017, there was a substantial widening of the gap between the amount of tax the ultra-wealthy paid in the US and the tax paid by average Americans.⁴⁰

This is important as people are more willing to pay taxes when their tax system is viewed as being generally progressive.⁴¹ Where there is perceived tax inequity, individuals and businesses are less likely to act morally, and more likely to respond to taxation through noncompliance.

This is why the development of a robust and substantial global minimum corporate tax is so important. The steady global decrease in headline corporate tax rates over recent decades, combined with an almost daily reportage of corporate tax scandals, has eroded public trust in the fairness of the tax system in many parts of the world, with significant consequences for morale and compliance.

A global minimum tax will drive a more level playing field for business

There is compelling evidence to support a global minimum corporate income tax, as championed by the OECD’s Pillar Two Global Anti-Base Erosion (GloBE) rules.⁴²

The OECD argues that MNEs tend to face lower effective tax rates than firms operating in a single jurisdiction. Driven by the opportunity for MNEs to engage in profit shifting, which can exacerbate the uneven playing field between large multinationals and other firms. This favours the accumulation of market power, which may “result in MNEs earning economic rents”. Moreover, international tax spillovers – i.e., the extent to which one country’s tax policy influences MNE activity in other jurisdictions – can impact domestic tax policies.

Placing multilaterally agreed limits on the extent to which low-taxed profit arises provides governments with more autonomy to pursue their own fiscal policies in the presence of international spillovers. It also levels the playing field for MNEs who opt to not participate in aggressive tax avoidance.

The OECD has estimated that a global minimum tax set at 15% would reduce global low-taxed profit by 80%, raise an estimated US$155-192bn of additional tax revenue, reduce tax rate differentials across countries and potentially improve the allocation of global capital.⁴³

In January 2026, 147 countries working together within the OECD Inclusive Framework agreed a ‘side-by-side arrangement’ that partly accommodates regressive objections from the US.⁴⁴ This is an ugly compromise, but keeps the global minimum tax alive and moving forward. The US already operates its own global minimum tax (at a rate of 12.6-14%), albeit this is inferior to the OECD’s (as it is blended – ie., not on a jurisdiction by jurisdiction basis).⁴⁵

“Corporation tax matters, and progressive businesses recognise this and are proud to embrace responsible tax conduct and contribute their fair share. Long may it thrive.”

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‘Corporate income tax’ and ‘corporate tax’ are synonymous – it is a tax on the profits of a business (which is, put simply, revenue minus costs).
Note, although the Fair Tax Foundation’s Fair Tax Mark accreditation standards for business focus on corporate tax, if a business is known to have materially evaded or avoided other taxes (such as sales taxes) then Fair Tax Mark certification will not be an option. Furthermore, our Tax Responsibility and Transparency Index takes account of a range of taxes, albeit corporate income tax is a crucial central component.
See https://subnational.doingbusiness.org/en/data/exploretopics/paying-taxes/why-matters
Note: the ‘latest’ data relates to 2023. In 2023, the share of corporate tax revenues in total tax revenues fell from 17.8% to 17.3% on average across the 135 jurisdictions covered. However, the previous year, Corporate Tax Statistics 2025 noted a substantial increase, from 15.9% to 17.8% – which was the highest percentage contribution recorded since OECD analysis commenced in 2000.
Analysis covers 38 jurisdictions in Africa, 37 jurisdictions in Asia & Pacific and 26 in Latin America & the Caribbean.
Chad, Gabon and Equatorial Guinea recorded the largest increases in their tax-to-GDP ratio in 2023, driven by increases in corporate tax revenues resulting from high profits from the extractive sector.
In Estonia and Latvia, corporate income tax is payable on profits distributed, not on profits generated and retained (the global norm). This approach, coupled with a capital gains tax regime peppered with loopholes, effectively turns these countries into tax havens.
Analysis covers 146 Inclusive Framework members, as of the 1 January 2026. The standard rate, which is not targeted at any particular industries or income type, is used. The top marginal rate is reported if a jurisdiction has a progressive corporate tax system. Other special corporate taxes that are levied on a base other than corporate profits are not included.
Within this, the UK was found to suffer £71bn of profit shifting, leading to an estimated £14bn reduction in corporate tax revenues. This equates to £17bn of missing tax, or 32% of what is collected. See https://missingprofits.world/
The Fair Tax Foundation’s list of tax havens (and their characteristics) is available here https://fairtaxmark.net/why-get-the-mark/faqs/#faq-4
European Commission: Directorate-General for Taxation and Customs Union, Brun, L., Speitmann, R., Leszek Stasio, A. and Stoehlker, D., A European approach to measuring losses in corporate tax revenues – Final report, Publications Office of the European Union, 2025, https://data.europa.eu/doi/10.2778/0541549
OECD (October 2021). Two-Pillar Solution to Address the Tax Challenges Arising from the Digitalisation of the Economy. See https://www.oecd.org/content/dam/oecd/en/topics/policy-issues/beps/statement-on-a-two-pillar-solution-to-address-the-tax-challenges-arising-from-the-digitalisation-of-the-economy-october-2021.pdf
See Corporate Tax Statistics 2025 (November 2025).
Albeit, the share of revenues raised from large MNEs has increased in recent years. Large MNEs contributed an average of 44.5% of total corporate tax revenues in 2023 compared to 42.8% in 2017. See Corporate Tax Statistics 2026 (July 2026).
Based on analysis of 80 large multinationals headquartered in Europe. Profit taxes accounted for €133.6bn of €254.3bn of all taxes borne. See Total Tax Contribution – A study of the largest companies headquartered in Europe (December 2025). European Business Tax Forum.
See Economic and fiscal outlook (November 2025). Office for Budget Responsibility.
See https://fairtaxmark.net/oecd-global-minimum-tax-still-alive-despite-trump/
See https://fairtaxmark.net/trump-administration-wages-war-on-corporate-tax-transparency-whilst-many-us-mncs-quietly-embrace-public-country-by-country-reporting/
Found that the labour productivity of informal firms is about one-fourth that of formal firms. Moreover, the labour productivity of formal firms that face competition from informal firms is about 75 percent of the average labour productivity of formal firms that do not experience informal competition. Amin, Mohammad, Franziska L. Ohnsorge, and Cedric Okou, “Casting a Shadow. Productivity of Formal Firms and Informality.” (2019) World Bank Policy Research Working Paper 8945. See https://openknowledge.worldbank.org/server/api/core/bitstreams/f84f89aa-0e0f-5f09-a660-d7391c058d61/content.
In essence, corporate tax helps address the ‘agency problem’, wherein the owners of a business, the shareholders, are not the managers who are in control. This creates the conditions for opportunistic managers to promote their personal interests over those of the shareholders. See https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4703308
See https://www.sciencedirect.com/science/article/abs/pii/S154461232400864X
See https://fairtaxmark.net/what-is-tax-cloaking/
Their expectations rest on three main principles: 1) taxes should be paid where economic value is generated; 2) company tax arrangements are a board responsibility; 3) public country-by-country reporting is a core element of transparent corporate tax disclosure. See https://www.nbim.no/contentassets/48b3ea4218e44caab5f2a1f56992f67e/expectations-document—tax-and-transparency—norges-bank-investment-management.pdf
Nest is the largest workplace pension in the UK. See https://www.nestpensions.org.uk/schemeweb/dam/nestlibrary/uk-voting-policy.pdf and https://www.nestpensions.org.uk/schemeweb/dam/nestlibrary/voting-policy-global.pdf
Convened by the Church of England Pensions Board and Brunel Pension Partnership. Developed with the input and support of a group of Friends Provident Foundation, Local Pensions Partnership Investments, Nest, People’s Partnership, Railpen, and Scottish Widows. See https://fairreward.org/files/frf-methodology.pdf
Their ‘Priority voting principles for 2026’ include:
See https://shareaction.org/shareholder-resolutions/voting-season-2026
See https://www.pensiondanmark.com/en/press/news/2020/six-leading-danish-foundations-and-associations-adopt-the-pension-sectors-tax-code-of-conduct/
See https://www.vbdo.nl/wp-content/uploads/2025/02/VBDO038-Tax-Investor-Guide-def.pdf
See https://www.shareholdersforchange.eu/what-we-do/
The brand name used for Caisse de dépôt et placement du Québec (CDPQ). See https://www.lacaisse.com/en/sir/2024/social#section-3.
See https://docs.columbiathreadneedle.com/documents/Responsible%20Investment%20-%20Corporate%20Governance%20Guidelines%20CGG.pdf.
See https://www.hermes-investment.com/uploads/2024/08/541a80ae3961d0273ab471e82b9ab975/eos-corporate-responsible-tax-principles-2024.pdf.
‘Tax Transparency’ is identified as a key issue in the Governance Pillar of the MSCI ESG Ratings model, and is deemed to encompass a company’s estimated corporate tax gap, involvement in tax related controversies and revenue-reporting transparency. See https://www.msci.com/documents/1296102/34424357/MSCI+ESG+Ratings+Methodology+-+Tax+Transparency+Key+Issue.pdf/f5b93df6-475c-25c7-db7f-26a6da3d703a
‘Tax Strategy’ is identified as a core subject within the Governance and Economic Dimension of their Corporate Sustainability Assessment, and is deemed to encompass a company’s good tax governance and tax transparency. Minimum tax rates, tax incentives, fair share taxation and the allocation of revenues and profits across jurisdictions are all considered relevant to assessment. See https://www.spglobal.com/content/dam/spglobal/s1/en/documents/esg/SP_22-Materiality-Core-Subjects_2025.pdf
PRI is a global organisation, set up with the United Nations and the world’s largest institutional investors in 2005. It is now supported by more than 5,000 signatories from around the world, representing US$139.6tr AUM. See PRI (December 2022) How to consider tax in voting practices.
Reporting of income taxes under IFRS is subject to the accounting standard IAS 12. Income taxes include all domestic and foreign taxes which are based on taxable profits (plus withholding taxes). Only income taxes can be reported within the tax line in the income statement. Other taxes are reported elsewhere in the income statement, for example, in cost of sales or administrative expenses.
PwC Investor Survey 2024. 45% of investors say they really lack enough quantitative tax information, with 43% also saying they lack sufficient qualitative information to the same degree.
See Poverty and Shared Prosperity 2022 (World Bank) at https://www.worldbank.org/en/publication/poverty-and-shared-prosperity.
The Laffer Curve is self-evidently a ‘curve’. So, even if one accepts the hypothesis at face value, namely that all points to the right of the apex revenue-maximising rate lead to a lower tax take (i.e. higher tax rates lead to lower tax take), it is equally asserted that all points to the left of the apex also lead to lower tax take (i.e. lower tax rates lead to lower tax take). Laffer enthusiasts often fail to grasp this and talk as though the ‘curve’ is actually a fantastical linear line which ‘proves’ that lowering tax rates will magically always lead to higher tax takes.
How Much Tax Do US Billionaires Pay? Evidence from Administrative Data. August 2025. NBER Working Paper No. 34170.
Hoy, Christopher (2022). How Does the Progressivity of Taxes and Government Transfers Impact People’s Willingness to Pay Tax?: Experimental Evidence across Developing Countries. Policy Research Working Papers; 10167. See http://hdl.handle.net/10986/37987
These impose a global minimum tax of 15% on large multinational businesses in respect of the profit arising in each jurisdiction where they operate.
See OECD Taxation Working Papers No. 68 (2024). The Global Minimum Tax and the taxation of MNE profit.
Ironically, it was the previous US administration, under Joe Biden, that fuelled the advance of a global minimum tax in 2021. See https://www.oecd.org/en/about/news/press-releases/2025/12/international-community-agrees-way-forward-on-global-minimum-tax-package.html.
The tax on Net Controlled Foreign Corporation Tested Income (NCTI, formerly referred to as the GILTI) is 12.6% (but “14%” is the effective foreign tax rate a US MNE must pay to have its US tax liability fully offset by foreign tax credits). There is also a Corporate Alternative Minimum Tax of 15%. The NCTI was originated by the first Trump Administration in 2017, and amended by the second Trump Administration in 2025 as part of the ‘One Big Beautiful Bill Act’. The CAMT applies to large business and was introduced by the Biden Administration in 2022, and is based on book profits.