Hanappi, T. (2018), “Corporate Effective Tax Rates: Model Description and Results from 36 OECD and Non-OECD Countries”, OECD Taxation Working Papers, No. 38, OECD Publishing, Paris.


The paper presents the new OECD model for the calculation of forward-looking effective tax rates and provides first empirical results based on an OECD survey, conducted in 2016, collecting comparable cross-country information on corporate tax provisions from 36 OECD and Selected Partner Economies. Responses to the survey were received from Australia, Austria, Belgium, Canada, Chile, Costa Rica, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Israel, Italy, Japan, Luxembourg, Mexico, Netherlands, New Zealand, Norway, Poland, Portugal, Singapore, Slovak Republic, Slovenia, South Africa, Spain, Sweden, Switzerland, Turkey, the United Kingdom and the United States.

The empirical results discussed in the paper highlight that an accurate assessment of investment incentives across countries needs to build on a consistent methodological framework capable of covering not only corporate statutory tax rates but also many different rules that affect the tax base such as fiscal depreciation and other deductions or allowances.

The OECD corporate effective tax rate model described in the paper provides such a framework; it builds on the theoretical model developed by Devereux and Griffith (1999, 2003) and currently covers 10 asset categories  and  36  different  corporate  tax  systems.  Empirical  results  are  based  on  two  different macroeconomic scenarios, showing that effective average and marginal tax rates vary widely across asset categories, countries and sources of finance.

In addition to the cross-country comparative analysis presented below, the OECD model also enables researchers to conduct further cross-country and within-country analyses of the incentive effects of corporate and personal income taxation. The appendix describes in detail how the OECD model can be used for policy analysis. It includes several examples and illustrates how country-specific policy evaluations can be conducted.

(Source: OECD iLibrary | Working Paper No. 38)

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