The OECD published a working paper titled Taxing Capital Gains: Country Experiences and Challenges, which examines the taxation of capital gains across its member jurisdictions on 26 February 2025.
The paper assesses the rationale for offering preferential tax treatment to capital gains and analyzes the broader economic and fiscal implications.
Key findings highlight that justifications such as addressing double taxation and mitigating the effects of inflationary gains are more substantively supported than arguments related to fostering investment and entrepreneurship, which remain less conclusive.
Additionally, the paper underscores that existing capital gains tax systems often create economic distortions, inequities, and constrain potential revenue generation.
The OECD proposes alternative approaches, including targeted relief measures and adjustments to the realization-based taxation model, while emphasizing the need for a careful evaluation of their trade-offs. Future work will build upon these findings, exploring the interactions between various taxes—on capital gains, wealth, dividends, and corporate income—and assessing reform options in the context of different national frameworks.
