IDEAS home Printed from https://ideas.repec.org/b/zbw/zewexp/148154.html
   My bibliography  Save this book

The effect of inflation and interest rates on forward-looking effective tax rates

Author

Listed:
  • Spengel, Christoph
  • Heckemeyer, Jost Henrich
  • Streif, Frank

Abstract

[Objective] Every year ZEW Mannheim computes measures of corporate effective taxation in Europe based on the Devereux/Griffith methodology. The measures aim at comprehensively reflecting and consistently comparing the effective corporate tax levels in the different member states. For the computation of the effective tax rates, assumptions on economic parameters have to be made - in particular on the values of the inflation and interest rate. Common assumptions on these variables are strictly necessary in order to compare effective levels of taxation across countries in a meaningful way. In some cases these assumptions could interact with the effects of specific tax parameters on the effective tax burdens. For example, capital allowances become less effective in reducing tax burdens in inflationary environments. As a consequence, countries with high capital allowances appear more attractive when inflation is low. This study aims at analysing and quantifying the effect of the real interest and inflation rate on effective tax measures.

Suggested Citation

  • Spengel, Christoph & Heckemeyer, Jost Henrich & Streif, Frank, 2016. "The effect of inflation and interest rates on forward-looking effective tax rates," ZEW Expertises, ZEW - Leibniz Centre for European Economic Research, volume 63, number 148154, September.
    • Handle: RePEc:zbw:zewexp:148154
    DOI: 10.2778/020392
    as

    Download full text from publisher

    File URL: https://www.econstor.eu/bitstream/10419/148154/1/872159604.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.2778/020392?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Devereux, Michael P & Griffith, Rachel, 2003. "Evaluating Tax Policy for Location Decisions," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 10(2), pages 107-126, March.
    2. Lukasz Rachel & Thomas Smith, 2015. "Secular Drivers of the Global Real Interest Rate," Discussion Papers 1605, Centre for Macroeconomics (CFM).
    3. Bräutigam, Rainer & Spengel, Christoph & Streif, Frank, 2015. "Decline of CFC rules and rise of IP boxes: How the ECJ affects tax competition and economic distortions in Europe," ZEW Discussion Papers 15-055, ZEW - Leibniz Centre for European Economic Research.
    4. Lisa Evers & Helen Miller & Christoph Spengel, 2015. "Intellectual property box regimes: effective tax rates and tax policy considerations," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 22(3), pages 502-530, June.
    5. Ulrich Schreiber & Christoph Spengel & Lothar Lammersen, 2002. "Measuring The Impact Of Taxation On Investment And Financing Decisions," Schmalenbach Business Review (sbr), LMU Munich School of Management, vol. 54(1), pages 2-23, January.
    6. Lammersen, Lothar, 2002. "Investment Decisions and Tax Revenues Under an Allowance for Corporate Equity," ZEW Discussion Papers 02-47, ZEW - Leibniz Centre for European Economic Research.
    7. European Commission, 2001. "Company Taxation in the Internal Market," Taxation Studies 0005, Directorate General Taxation and Customs Union, European Commission.
    8. Zew, 2015. "EFFECTIVE TAX LEVELS USING THE DEVEREUX/GRIFFITH METHODOLOGY, Update 2015," Taxation Studies 0063, Directorate General Taxation and Customs Union, European Commission.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Spengel, Christoph & Fischer, Leonie & Stutzenberger, Kathrin, 2020. "Breaking borders? The European Court of Justice and internal market," ZEW Discussion Papers 20-059, ZEW - Leibniz Centre for European Economic Research.
    2. Elias Steinmüller & Georg U. Thunecke & Georg Wamser, 2019. "Corporate income taxes around the world: a survey on forward-looking tax measures and two applications," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 26(2), pages 418-456, April.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Lisa Evers & Helen Miller & Christoph Spengel, 2015. "Intellectual property box regimes: effective tax rates and tax policy considerations," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 22(3), pages 502-530, June.
    2. Lammersen, Lothar, 2002. "The Measurement of Effective Tax Rates: Common Themes in Business Management and Economics," ZEW Discussion Papers 02-46, ZEW - Leibniz Centre for European Economic Research.
    3. Spengel, Christoph & Heckemeyer, Jost Henrich & Nusser, Hannah & Klar, Oliver & Streif, Frank, 2016. "The impact of tax planning on forward-looking effective tax rates," ZEW Expertises, ZEW - Leibniz Centre for European Economic Research, volume 64, number 148155, September.
    4. Lammersen, Lothar, 2002. "Investment Decisions and Tax Revenues Under an Allowance for Corporate Equity," ZEW Discussion Papers 02-47, ZEW - Leibniz Centre for European Economic Research.
    5. Pfeiffer, Olena & Spengel, Christoph, 2017. "Tax incentives for research and development and their use in tax planning," ZEW Discussion Papers 17-046, ZEW - Leibniz Centre for European Economic Research.
    6. Christina Elschner & Werner Vanborren, 2009. "Corporate Effective Tax Rates in an Enlarged European Union," Taxation Papers 14, Directorate General Taxation and Customs Union, European Commission, revised Apr 2009.
    7. Evers, Lisa & Spengel, Christoph, 2014. "Effective tax rates under IP tax planning," ZEW Discussion Papers 14-111, ZEW - Leibniz Centre for European Economic Research.
    8. Da Rin, Marco & Di Giacomo, Marina & Sembenelli, Alessandro, 2011. "Entrepreneurship, firm entry, and the taxation of corporate income: Evidence from Europe," Journal of Public Economics, Elsevier, vol. 95(9), pages 1048-1066.
    9. Michael Overesch & Georg Wamser, 2009. "Who Cares About Corporate Taxation? Asymmetric Tax Effects on Outbound FDI," The World Economy, Wiley Blackwell, vol. 32(12), pages 1657-1684, December.
    10. Christof Ernst & Katharina Richter & Nadine Riedel, 2014. "Corporate taxation and the quality of research and development," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 21(4), pages 694-719, August.
    11. Christina Elschner & Jost H. Heckemeyer & Christoph Spengel, 2011. "Besteuerungsprinzipien und effektive Unternehmenssteuerbelastungen in der Europäischen Union: Regelt sich die EU‐weite Steuerharmonisierung von selbst?," Perspektiven der Wirtschaftspolitik, Verein für Socialpolitik, vol. 12(1), pages 47-71, February.
    12. Vito Polito, 2012. "Up or Down? Capital Income Taxation in the United States and the United Kingdom," FinanzArchiv: Public Finance Analysis, Mohr Siebeck, Tübingen, vol. 68(1), pages 48-82, March.
    13. Annette Alstadsæter & Salvador Barrios & Gaetan Nicodeme & Agnieszka Maria Skonieczna & Antonio Vezzani, 2018. "Patent boxes design, patents location, and local R&D," Economic Policy, CEPR, CESifo, Sciences Po;CES;MSH, vol. 33(93), pages 131-177.
    14. Dirk Kiesewetter & Tobias Steigenberger & Matthias Stier, 2018. "Can formula apportionment really prevent multinational enterprises from profit shifting? The role of asset valuation, intragroup debt, and leases," Journal of Business Economics, Springer, vol. 88(9), pages 1029-1060, December.
    15. Michael Overesch & Johannes Rincke, 2011. "What Drives Corporate Tax Rates Down? A Reassessment of Globalization, Tax Competition, and Dynamic Adjustment to Shocks," Scandinavian Journal of Economics, Wiley Blackwell, vol. 113(3), pages 579-602, September.
    16. Fritz Breuss & Margit Schratzenstaller, 2004. "Unternehmenssteuerwettbewerb und internationale Direktinvestitionen. Ein einführender Literaturüberblick anlässlich der österreichischen Körperschaftsteuerreform," WIFO Monatsberichte (monthly reports), WIFO, vol. 77(8), pages 645-653, August.
    17. Barrios, Salvador & d'Andria, Diego & Gesualdo, Maria, 2020. "Reducing tax compliance costs through corporate tax base harmonization in the European Union," Journal of International Accounting, Auditing and Taxation, Elsevier, vol. 41(C).
    18. Fernando M. M. Ruiz, 2006. "Convergence de l'impôt sur les sociétés dans l'Union E uropéenne," Economie & Prévision, La Documentation Française, vol. 0(2), pages 79-96.
    19. Ulrich Schreiber, 2013. "International Company Taxation," Springer Texts in Business and Economics, Springer, edition 127, number 978-3-642-36306-1, August.
    20. Keuschnigg, Christian & Loretz, Simon & Winner, Hannes, 2014. "Tax Competition and Tax Coordination in the European Union: A Survey," Economics Working Paper Series 1427, University of St. Gallen, School of Economics and Political Science.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:zbw:zewexp:148154. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ZBW - Leibniz Information Centre for Economics (email available below). General contact details of provider: https://edirc.repec.org/data/zemande.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.