The Determinants of Corporate Effective Tax Rates: Evidence from Australia
Melbourne Institute Working Paper No. 21/99
Date: September 1999
Author(s):
Abstract
The Effective Tax Rate (ETR) paid by firms can differ from the statutory rate due to the usage of tax shields and applicable credits and rebates. This paper attempts to investigate the characteristics of large Australian firms which drive ETR's away from the standard rate of corporation tax. There is evidence to suggest that interest payments, R&D expenditure, foreign ownership, stock-market listing, and the number of subsidiaries, all have a significant effect on ETR's. The result also suggest that unobserved firm heterogeneity plays a significant role.