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Computing effective corporate tax rates: comparisons and results

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  • Gaëtan Nicodème

Abstract

This paper investigates different methodologies for computing effective corporate tax rates. All methodologies present strengths and shortcomings, as well as different rankings of countries. One reason lies in the fact that different methodologies measure different things. This paper also computes effective corporate taxation for eleven European countries, the US, and Japan using financial statements of companies. It indicates that there are large differences between statutory and effective taxation, as well as between countries for different sectors and companies' sizes. Finally, it suggests that effective corporate taxation is sensitive to the business cycle.

Suggested Citation

  • Gaëtan Nicodème, 2001. "Computing effective corporate tax rates: comparisons and results," European Economy - Economic Papers 2008 - 2015 153, Directorate General Economic and Financial Affairs (DG ECFIN), European Commission.
    • Handle: RePEc:euf:ecopap:0153
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    References listed on IDEAS

    as
    1. European Commission, 2000. "Structures of the taxation systems in the European Union : 2000 edition," Taxation trends 2000, Directorate General Taxation and Customs Union, European Commission.
    2. Mendoza, Enrique G & Razin, Assaf & Tesar, Linda, 1994. "Computing Effective Tax Rates on Factor Incomes and Consumption: An International Macroeconomic Perspective," CEPR Discussion Papers 866, C.E.P.R. Discussion Papers.
    3. Spengel, Christoph, 1999. "Effective marginal tax rates for US investors in Germany and Europe : an analysis of recent tax reforms in Germany," ZEW Discussion Papers 99-55, ZEW - Leibniz Centre for European Economic Research.
    4. European Commission, 2009. "Taxation trends in the European Union: 2009 edition," Taxation trends 2009, Directorate General Taxation and Customs Union, European Commission.
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    More about this item

    Keywords

    corporate tax rates; methodologies; statutory and effective taxation;
    All these keywords.

    JEL classification:

    • H25 - Public Economics - - Taxation, Subsidies, and Revenue - - - Business Taxes and Subsidies

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