Determinants of the Effective Tax Rate

Radu Ciobanu, Adriana Florina Popa and Daniela-Nicoleta Sahlian
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Radu Ciobanu: Bucharest University of Economic Studies
Adriana Florina Popa: Bucharest University of Economic Studies
Daniela-Nicoleta Sahlian: Bucharest University of Economic Studies

CECCAR Business Review, 2024, vol. 5, issue 8, 40-45

Abstract: The effective tax rate has become a relevant indicator following the implementation of Council Directive (EU) 2022/2523 issued on 14 December 2022, which aims to ensure a global minimum level of taxation for multinational enterprise groups and large domestic groups in the European Union. The effective rate can be influenced by several key economic factors when companies compile their tax strategy. Our results show that inventory intensity, R&D expenditure, economic return, financial return, and reinvestment rate have a negative impact on the effective tax rate. In contrast, financial leverage and company size exhibited a positive impact.

Keywords: Directive 2022/2523; effective tax rate; company profit; IT sector (search for similar items in EconPapers)
JEL-codes: E62 H21 H25 H32 H87 K34 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:ahd:journl:v:5:y:2024:i:8:p:40-45

DOI: 10.37945/cbr.2024.08.05

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