OECD: Practical guide to investment tax incentives
Summary of key recommendations
may 12, 2026
The OECD on April 27, 2026, released A Practical Guide to Investment Tax Incentives. The guide provides several key recommendations for the design and administration of these incentives.
A summary of the key recommendations includes:
- Policymakers should focus on incentives that offer preferential tax treatment based on a firm's expenditure, such as accelerated depreciation or tax credits for capital investment, rather than those based on income.
- Tax incentives should be closely targeted to achieve specific goals, such as job creation or energy efficiency, and be available only for projects that would not have occurred without the incentive. Eligibility criteria should be clear, specific, and measurable.
- Processes for receiving incentives should be transparent and predictable. The guide encourages prioritizing self-assessment of eligibility by taxpayers and reducing the discretionary power of tax authorities in selecting beneficiaries, while also implementing targeted, risk-based enforcement measures.
Read a May 2026 report prepared by KPMG’s EU Tax Centre