Abstract
The paper investigates the effective corporate tax rate (ETR) in the Czech Republic from 2003 to 2013 from the point of both time-series and cross-sectional analysis. We exploit the access to Bureau van Dijk, Amadeus database to get broad data sample from financial statements. Thus, micro backward-looking approach was applied in the paper. We find clear downward trend in the ETR during the given period and statistically significant correlation between the ETR and statutory corporate tax rate (STR). We also undertake analysis of geographical regions using ZIP codes of the companies and analysis of economic sectors according to NACE of the sample firms. Main finding of the cross-sectional analysis is the highest ETR in the region of Prague (capital).
Highlights
Economic world has been globalized and interconnected in the past decades to the extent that there are still fewer and fewer constraints in founding business or enlarging business across national borders
We exploit the access to Bureau van Dijk, Amadeus database1 to follow micro backward-looking methodology and undertake both time-series and cross-sectional empirical research of the effective corporate tax rate (ETR) in the Czech Republic
Dozens of ETR-topic papers were released in the U.S thorough national ETR micro backwardlooking analysis focused on the Czech Republic has been missing so far
Summary
Economic world has been globalized and interconnected in the past decades to the extent that there are still fewer and fewer constraints in founding business or enlarging business across national borders. There are and probably will always be differences in national law systems These distinctions make crossborder business transactions difficult to accomplish. Due to various constructions of tax base and overall calculation of corporate income tax worldwide, statutory corporate tax rates are very poor indicator of taxation measurement. This fact has led researchers, academics and tax professionals to seeking better indicators which would proxy all characteristics of national tax systems in better way. As mentioned for instance by Holečková (2011), statutory corporate tax rates do not take into account depreciation and Svitlík, J.: ETR Development and Analysis: Case from the Czech Republic
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