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Firm-specific forward-looking effective tax rates

Author

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  • Peter Egger
  • Simon Loretz
  • Michael Pfaffermayr
  • Hannes Winner

Abstract

This paper computes (marginal and average) forward-looking effective tax rates for a sample of more than 550,000 firms in and outside of Europe using Bureau van Dijk's ORBIS data-base. Comparing the firm-level effective tax rates with their country-level counterparts we arrive at two important findings for empirical research on the behavioral response to taxation. First, the firm-level component of the effective tax burden is generally much more important than the one at the country level. Second, tentative empirical results on the nexus between firm sales and corporate taxation illustrate that the conclusions obtained with forward looking firm- level effective tax rates differ starkly from those based on country-level forward-looking rates or backward-looking effective tax rates at the firm level.
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Suggested Citation

  • Peter Egger & Simon Loretz & Michael Pfaffermayr & Hannes Winner, 2009. "Firm-specific forward-looking effective tax rates," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 16(6), pages 850-870, December.
    • Handle: RePEc:kap:itaxpf:v:16:y:2009:i:6:p:850-870
    DOI: 10.1007/s10797-009-9124-1
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    More about this item

    Keywords

    Corporate taxation; Effective tax rates; Investment; H25; C33;
    All these keywords.

    JEL classification:

    • H25 - Public Economics - - Taxation, Subsidies, and Revenue - - - Business Taxes and Subsidies
    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models

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