Tax Havens and Effective Tax Rates: An Analysis of Private versus Public European Firms

Aziz Jaafar () and John Thornton

No 15005, Working Papers from Bangor Business School, Prifysgol Bangor University (Cymru / Wales)

Abstract: We examine the impact of tax-haven operations on the effective corporate tax burdens of publicly listed and privately held firms domiciled in Europe. In particular, we consider how European firmsÕ tax haven operations interacts with factors such listing status and home-country tax reporting systems to determine the relative tax burdens of publicly listed and private firms. Our main empirical results show that tax haven operations is associated with lower effective tax rates for both private and public firms, and that the impact of tax havens in lowering effective tax rates is more pronounced for private firms than for public firms.Home country characteristics are also important determinants of effective tax rates for both private and public firms with tax havens. Given that firms, regardless of their listing status, use tax havens as tax avoidance mechanism in lowering tax burdens, regulatory and tax enforcement bodies should focus not only on public firms but also on private firms.

Keywords: Effective tax rates; Publicly listed firms; Private firms; Tax havens (search for similar items in EconPapers)
JEL-codes: H20 M41 (search for similar items in EconPapers)
Pages: 29 pages
Date: 2015-05
New Economics Papers: this item is included in nep-acc, nep-pbe and nep-pub
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

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Journal Article: Tax Havens and Effective Tax Rates: An Analysis of Private versus Public European Firms (2015)
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