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Do SMEs Face a Higher Tax Burden? Evidence from Belgian Tax Return Data

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  • Pieter Buyl
  • Annelies Roggeman

Abstract

The public debate on taxation of domestic small and medium enterprises (SMEs) versus large and multinational enterprises (MNEs) is highly relevant nowadays. Using confidential tax return data instead of financial statement data, the results indicate that domestic SMEs face on average a 1.6 and 4.8 percentage-point higher effective tax burden compared to large domestic and large MNEs respectively. This suggests that tax incentives for SMEs are inadequate to compensate for the tax advantages of large and internationally operating companies. Furthermore, we show that the use of information built exclusively upon accounting data could bias the results.

Suggested Citation

  • Pieter Buyl & Annelies Roggeman, 2019. "Do SMEs Face a Higher Tax Burden? Evidence from Belgian Tax Return Data," Prague Economic Papers, Prague University of Economics and Business, vol. 2019(6), pages 729-747.
    • Handle: RePEc:prg:jnlpep:v:2019:y:2019:i:6:id:719:p:729-747
    DOI: 10.18267/j.pep.719
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    References listed on IDEAS

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    1. Lars P. Feld & Jost H. Heckemeyer, 2011. "Fdi And Taxation: A Meta‐Study," Journal of Economic Surveys, Wiley Blackwell, vol. 25(2), pages 233-272, April.
    2. Dyreng, Scott D. & Hanlon, Michelle & Maydew, Edward L. & Thornock, Jacob R., 2017. "Changes in corporate effective tax rates over the past 25 years," Journal of Financial Economics, Elsevier, vol. 124(3), pages 441-463.
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    Citations

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    Cited by:

    1. Dave Goyvaerts & Annelies Roggeman, 2020. "The Impact of Thin Capitalization Rules on Subsidiary Financing: Evidence from Belgium," De Economist, Springer, vol. 168(1), pages 23-51, March.
    2. Teodora Roman & Nicu Marcu & Valentina Diana Rusu & Erika Maria Doacă & Adelina Andreea Siriteanu, 2023. "Tax Payment and the Performance of SMEs: A Longitudinal Analysis on EU Countries," Sustainability, MDPI, vol. 15(2), pages 1-15, January.

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    More about this item

    Keywords

    corporate tax return data; SMEs; effective tax burden; reduced tax rates;
    All these keywords.

    JEL classification:

    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • H25 - Public Economics - - Taxation, Subsidies, and Revenue - - - Business Taxes and Subsidies
    • H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion and Avoidance

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