Determinants of the Effective Tax Rate in the BRIC Countries

In this paper, we study the determinants of the effective tax rate (ETR) for corporate taxation for listed companies in the BRIC countries: Brazil, Russia, India, and China. We use a panel of 3,565 companies over the period 2000-2009, and we apply the generalized method of moments estimator for dyna...

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Bibliographic Details
Published inEmerging markets finance & trade Vol. 50; no. sup3; pp. 214 - 228
Main Authors Fernández-Rodríguez, Elena, Martínez-Arias, Antonio
Format Journal Article
LanguageEnglish
Published Abingdon Routledge 01.05.2014
M.E. Sharpe, Inc
Taylor & Francis Ltd
Subjects
BRIC countries
corporate tax burden
Corporate taxes
dynamic panel data
Effective income tax rates
effective tax rate (ETR)
Generalized method of moments
International comparisons
Leverage
Profitability
Studies
Tax rates
Brazil
China
Russia
India
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Summary:In this paper, we study the determinants of the effective tax rate (ETR) for corporate taxation for listed companies in the BRIC countries: Brazil, Russia, India, and China. We use a panel of 3,565 companies over the period 2000-2009, and we apply the generalized method of moments estimator for dynamic panel data. The results show that the ETR for one year depends on the tax burden borne the previous year. The only variable that is significant in all the BRIC countries is inventory intensity. Firm size, leverage, and profitability affect the tax burden in three of the four countries considered but with certain differences.
ISSN:1540-496X
1558-0938
DOI:10.2753/REE1540-496X5003S313