1887

OECD Taxation Working Papers

Working papers from the Centre for Tax Policy and Administration of the OECD that cover the full range of the Centre’s work on taxation with the main focus on tax policy related issues.

English, French

Corporate Effective Tax Rates

Model Description and Results from 36 OECD and Non-OECD Countries

Variations in the definition of the corporate tax base across countries can have significant impacts on tax liabilities associated with a given investment. An accurate assessment of the effects of corporate tax systems on investment thus needs to build on a consistent methodological framework covering not only statutory tax rates (STRs) but also many provisions affecting the base such as, e.g., fiscal depreciation. The new OECD model described in this paper provides such a framework; building on the theoretical model developed by Devereux and Griffith (1999, 2003) it presents forward-looking effective tax rates (ETRs) for 36 OECD and Selected Partner Economies taking into account a wide range of corporate tax provisions. Empirical results confirm that corporate tax bases vary considerably across countries and asset categories; since tax bases are typically narrower in countries with higher STRs, ETRs tend to be less dispersed across countries than STRs.

English

Keywords: corporate taxation, tax competition, corporate tax base, investment decisions
JEL: H25: Public Economics / Taxation, Subsidies, and Revenue / Business Taxes and Subsidies including sales and value-added (VAT); H32: Public Economics / Fiscal Policies and Behavior of Economic Agents / Fiscal Policies and Behavior of Economic Agents: Firm
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