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Effective Corporate Tax Rate
[Efektivní sazba korporátní daně]

Author

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  • Jana Morávková

Abstract

Statutory tax rates are not considered a suitable measure of a level of taxation. For this reason, a new indicator - the effective tax rate - was introduced. The article provides an overview and critical assessment of methods for determination of the effective tax rate. In particular, the article covers the micro forward looking, micro backward looking and macro backward looking approaches. Different approaches to the effective tax rate determinations appearing in a number of studies are reviewed. To illustrate differences in the approaches, the article includes an analysis based on macro backward looking approach with several modifications. It includes the effective corporate tax computed as a ratio of total corporate tax revenue to GDP and a ratio of total corporate tax revenue to total tax revenue. Further as a ratio of taxation to profit before taxes. It is shown that there is no general method to determine the effective tax rate. A method must be chosen appropriately with respect to the intended purpose of an analysis

Suggested Citation

  • Jana Morávková, 2015. "Effective Corporate Tax Rate [Efektivní sazba korporátní daně]," Český finanční a účetní časopis, Prague University of Economics and Business, vol. 2015(4), pages 39-58.
    • Handle: RePEc:prg:jnlcfu:v:2015:y:2015:i:4:id:458:p:39-58
    DOI: 10.18267/j.cfuc.458
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    References listed on IDEAS

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    1. Alowin Moes, 1999. "Effective Tax Rates on Capital in New Zealand - Changes 1972-1998," Treasury Working Paper Series 99/12, New Zealand Treasury.
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    More about this item

    Keywords

    Effective tax rate; EATR; Micro and macro approach; Efektivní sazba daně; Mikro a makro pohled;
    All these keywords.

    JEL classification:

    • H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General

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