Effective Tax Rates and Firm Size

Pierre Bachas (), Anne Brockmeyer (), Roel Dom () and Camille Semelet ()
Additional contact information
Pierre Bachas: ESSEC Business School and World Bank Research
Anne Brockmeyer: IFS, UCL, World Bank and CEPR
Camille Semelet: University of Munich, ifo Institute and World Bank

No 14, Working Papers from EU Tax Observatory

Abstract: This paper provides novel evidence on the relationship between firm size and effective corporate tax rates using full-population administrative tax data from 13 countries. In all countries, small firms face lower effective tax rates than mid-sized firms due to reduced statutory tax rates and a higher propensity to register losses. In most countries, effective tax rates fall for the largest firms due to the take-up of tax incentives. As a result, a third of the top 1 percent of firms face effective tax rates below the global minimum tax of 15 percent. The minimum tax could raise corporate tax revenue by 27 percent in the median sample country.

Keywords: Corporate Effective Tax Rate; Global Minimum Tax; Firm Size; Tax Incentives (search for similar items in EconPapers)
JEL-codes: H25 H87 O23 (search for similar items in EconPapers)
Pages: 46 pages
Date: 2023-02
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