Flag of Canada

Canada

#15 overall · Score 72.2 / 100 · unchanged from 2025

Overall

#15

72.2 / 100

unchanged from 2025

Corporate

#17

66.7 / 100

unchanged from 2025

Individual

#28

57.1 / 100

down two places from 2025

Consumption

#8

85.2 / 100

down one place from 2025

Property

#25

54.0 / 100

unchanged from 2025

Cross-border

#28

61.2 / 100

unchanged from 2025

Notable Changes from 2025

In 2025, Canada abolished its digital services tax, canceled the planned increase in the capital gains inclusion rate, and reinstated full expensing for machinery and the accelerated investment incentive for buildings. In September 2026, after the cut-off date for the current Index edition, the Canadian government announced it would make full expensing for machinery and patent rights permanent and extend it to a larger share of assets, while introducing temporary full expensing for buildings used for manufacturing and processing until 2029. Canada’s rank stays constant at 15th.

Strengths

  • Consumption taxes are low, though the consumption tax base is relatively narrow.
  • Canada provides full expensing for business investments in machinery and intangibles and maintains above-average cost recovery for investments in industrial buildings.
  • Canada does not levy wealth, estate, or inheritance taxes.

Weaknesses

  • Canada taxes capital gains at a rate of 26.8 percent and dividends at 39.3 percent, well above the respective OECD averages of 19.7 percent and 24.7 percent.
  • The corporate rate of 26 percent is above average among OECD countries (24.2 percent).
  • Canada levies high withholding taxes on interest, dividends, and royalties at a rate of 25 percent.

Component Scores

Canada category scores out of 100Corporate Taxes: score 66.7, rank 17. Individual Taxes: score 57.1, rank 28. Consumption Taxes: score 85.2, rank 8. Property Taxes: score 54.0, rank 25. Cross-Border Tax Rules: score 61.2, rank 28255075100Corporate Taxes: 66.7 (rank 17)Individual Taxes: 57.1 (rank 28)Consumption Taxes: 85.2 (rank 8)Property Taxes: 54.0 (rank 25)Cross-Border Tax Rules: 61.2 (rank 28)CorporateIndividualConsumptionPropertyCross-border
Category Rank Score vs 2025
Corporate Taxes #17 66.7 unchanged from 2025
Individual Taxes #28 57.1 down two places from 2025
Consumption Taxes #8 85.2 down one place from 2025
Property Taxes #25 54.0 unchanged from 2025
Cross-Border Tax Rules #28 61.2 unchanged from 2025

Ranking Changes, 2014–2026

Canada's best overall rank was 15th and its worst was 23rd. It ranks 15th in 2026.

Overall rank by year for CanadaCanada: 2014 rank 23, 2015 rank 16, 2016 rank 17, 2017 rank 17, 2018 rank 17, 2019 rank 17, 2020 rank 16, 2021 rank 17, 2022 rank 17, 2023 rank 15, 2024 rank 18, 2025 rank 15, 2026 rank 152014201520162017201820192020202120222023202420252026Canada 2014: rank 23Canada 2015: rank 16Canada 2016: rank 17Canada 2017: rank 17Canada 2018: rank 17Canada 2019: rank 17Canada 2020: rank 16Canada 2021: rank 17Canada 2022: rank 17Canada 2023: rank 15Canada 2024: rank 18Canada 2025: rank 15Canada 2026: rank 15#23#15

OECD Context

Each row places all 38 countries on a 0–100 score scale for one measure. Canada is highlighted; the dashed line is the OECD median.

All 38 Countries' Ranks

Overall and category ranks for all 38 countries
CountryOverallCorporateIndividualConsumptionPropertyCross-border
Estonia#1#2#1#24#1#7
Latvia#2#1#8#22#4#6
New Zealand#3#31#7#1#8#14
Switzerland#4#7#9#4#36#2
Lithuania#5#3#10#23#6#16
Luxembourg#6#20#21#7#15#5
Czech Republic#7#9#4#32#5#11
Australia#8#29#14#9#3#23
Turkey#9#21#6#15#22#8
Hungary#10#5#3#38#23#4
Israel#11#11#31#11#10#18
Slovak Republic#12#24#2#33#7#17
Sweden#13#6#18#26#9#12
Costa Rica#14#35#13#6#11#29
Canada#15#17#28#8#25#28
Netherlands#16#23#30#14#20#3
United States#17#8#17#3#27#37
Austria#18#18#27#17#17#10
Germany#19#30#34#13#12#9
Norway#20#15#29#27#16#15
Mexico#21#28#26#12#2#38
Finland#22#10#24#28#21#24
Greece#23#22#5#29#30#19
Chile#24#32#23#10#13#36
Slovenia#25#14#12#30#24#30
Korea#26#26#38#2#31#34
Belgium#27#16#15#25#28#21
Japan#28#36#35#5#26#31
Ireland#29#4#36#35#18#27
United Kingdom#30#25#22#34#33#1
Denmark#31#19#37#20#14#32
Poland#32#12#11#36#29#25
Portugal#33#34#19#21#19#33
Iceland#34#13#32#19#34#26
Spain#35#33#20#18#35#20
Italy#36#27#16#37#38#22
Colombia#37#37#25#16#37#35
France#38#38#33#31#32#13

Across the OECD

Canada ranks 15th of 38 OECD countries on the overall index.

Source: 2026 International Tax Competitiveness Index.

Notes on the Data

The 2026 Index uses the most up-to-date data available as of July 2026. Data may not reflect changes in countries making rapid reforms.

The changes to full expensing that Canada announced in September 2026 came after the cut-off date for the current Index edition, so they are not reflected in this year’s scores.

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About the Authors

Alex Mengden Tax Foundation
Expert

Alex Mengden

Economist

Alex Mengden is an Economist at the Tax Foundation, where he focuses on international tax issues and tax policy in Europe. He holds a BA in philosophy and economics from the University of Bayreuth and an MSc in economics from the Ludwig Maximilian University of Munich.

Tax Foundation Staff

Luis Zarka

Transatlantic Tax Fellow

Luis Zarka was a 2026 Transatlantic Tax Fellow with the Tax Foundation’s Center for Global Tax Policy.

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