Modelling effective corporate tax rate in the Czech Republic
| Authors | |
|---|---|
| Year of publication | 2017 |
| Type | Article in Proceedings |
| Conference | 35th International Conference Mathematical Methods in Economics MME 2017 Conference Proceedings |
| MU Faculty or unit | |
| Citation | |
| Field | Economy |
| Keywords | bankruptcy prediction; logistic regression; bankruptcy model; Czech Republic |
| Description | Comparing the statutory corporate tax rates with the effective corporate tax rates at corporate level, one can observe a statistically significant average difference of 2 percent in the Czech Republic. The goal of our paper is to identify and quantify the most important factors influencing the effective corporate tax rate in the Czech Republic which contribute to the variability in the effective taxation. Using the public data from the accounting statements from the last 15 years we have formulated and estimated a panel data model using various real and financial indicators of the Czech companies. The most significant factors are the size of companies, the ratio of noncurrent assets to total assets, the rentability of assets, the ratio of inventory to the total assets, the economic activity classification CZ-NACE, and the legal form. We show that the influence of the indebtedness ratio is non-linear. Surprisingly, the company's age and the retained losses prior years have no effects on final effective tax rates. Our model is able to predict statutory tax rate pretty well. |
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