Determinants of Bilateral Effective Tax Rates: Empirical Evidence from OECD Countries

Loretz, Simon (2007) Determinants of Bilateral Effective Tax Rates: Empirical Evidence from OECD Countries. Fiscal Studies, 28 (2), pp. 227-249.

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Abstract or Table of Contents

This paper identifies the relevant determinants of a company's effective tax burden. Thereby, we account for bilateral aspects of corporate taxation by calculating bilateral effective tax rates as proposed by Devereux and Griffith (1999 and 2003). The empirical evidence of a large panel of nearly 8,000 bilateral effective tax rates within the OECD suggests that country size is an important determinant of the effective tax rate. In line with the literature, bilateral tax rates with small host countries exhibit a smaller overall effective tax rate, despite the fact that larger countries are more likely to reduce the tax burden by means of tax treaties at the bilateral level. Further, we find that geographically remote countries impose higher taxes, whereas economic integration tends to reduce the extent of the bilateral effective tax burden.

Item Type: Article in Academic Journal
Classification Codes (e.g. JEL): H25; H77; C33
Status: Published
Date Deposited: 05 Jun 2015 10:16
Last Modified: 01 Apr 2016 14:19
URI: http://irihs.ihs.ac.at/id/eprint/3509

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