Do Large Companies Have Lower Effective Corporate Tax Rates? A European Survey
AbstractThe current debate in corporate taxation is focusing on leveling the tax playing field within the European Union for companies operating across-countries. However, tax burdens could also vary with the size of companies within the same country, raising the question whether large companies pay their share of the burden. This paper uses firm-level data for 21 European countries between 1992 and 2004. The paper finds a robust negative correlation between the number of employees and the effective tax burden of companies. This result tends to validate theories arguing that large companies may enjoy a lower tax burden. As a caveat, using total assets as size variable produces a positive relationship. This relationship is however less robust and less economically significant.
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Bibliographic InfoPaper provided by ULB -- Universite Libre de Bruxelles in its series Working Papers CEB with number 07-001.RS.
Length: 33 p.
Date of creation: 2007
Date of revision:
Publication status: Published by:
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Corporate taxation; Effective tax rates; political power; political cost.;
Find related papers by JEL classification:
- E61 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Policy Objectives; Policy Designs and Consistency; Policy Coordination
- H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
- H22 - Public Economics - - Taxation, Subsidies, and Revenue - - - Incidence
This paper has been announced in the following NEP Reports:
- NEP-ALL-2007-01-23 (All new papers)
- NEP-BEC-2007-01-23 (Business Economics)
- NEP-EEC-2007-01-23 (European Economics)
- NEP-PBE-2007-01-23 (Public Economics)
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- European Commission, 2012. "Tax reforms in EU Member States - Tax policy challenges for economic growth and fiscal sustainability – 2012 Report," Taxation Papers 34, Directorate General Taxation and Customs Union, European Commission.
- Marcin Piatkowski & Mariusz Jarmuzek, 2008. "Zero Corporate Income Tax in Moldova: Tax Competition and Its Implications for Eastern Europe," IMF Working Papers 08/203, International Monetary Fund.
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