ETR Development and Analysis: Case from the Czech Republic

Svitlík, Jan

doi:10.18267/j.efaj.146

Cited by 1 publication

(1 citation statement)

References 7 publications

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“…Both the average and median are significantly below the statutory legal tax rate, which is 19 % (except for 2009, when the rate was 20 %). Furthermore, the average ETR for Czech subsidiaries under control of companies listed in the EU is well below the effective tax rate of 26.5 % computed to the total Czech economy (Svitlik, 2015). The ETR figures indicate a contrary conclusion from a mutual relation of ROA and ROE, i.e., the parent companies manage earnings within the group to avoid taxation in the Czech Republic.…”

Section: Basic Statisticsmentioning

confidence: 72%

Tax-in or Tax-out? Evidence from the relation of financial performance and effective taxation of Czech subsidiaries under foreign control

Procházka

2019

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The paper evaluates the financial performance of Czech entities under control of companies listed in the EU and its relation to effective tax rates. Using individual corporate data, empirical evidence of 4,917 year-firm observations indicates a wide dispersion both in performance and taxation. The domicile of the parent has an impact on the subsidiary’s effective tax rate and the effective taxation of Czech subsidiaries under control of foreign listed parents is significantly lower than for other Czech companies. Despite exhibiting tax avoidance to some extent, the data reveal significant variability in relative tax rates suggesting that the majority of foreign parents from western and northern EU countries prefer to tax profits in the Czech Republic rather than elsewhere. Shifting profits to the Czech Republic results in superior reporting performance of the affected subsidiaries. In contrast, empirical evidence shows that parent companies from southern EU countries seek ways to avoid taxation. The unclear tax motives of both parent company groups hinder an appropriate assessment of the financial performance of subsidiaries from being conducted.

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Section: Basic Statisticsmentioning

confidence: 72%

Tax-in or Tax-out? Evidence from the relation of financial performance and effective taxation of Czech subsidiaries under foreign control

Procházka

2019

View full text Add to dashboard Cite

show abstract

ETR Development and Analysis: Case from the Czech Republic

Cited by 1 publication

References 7 publications

Tax-in or Tax-out? Evidence from the relation of financial performance and effective taxation of Czech subsidiaries under foreign control

Tax-in or Tax-out? Evidence from the relation of financial performance and effective taxation of Czech subsidiaries under foreign control

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