Determinants of the Variability of Corporate Effective Tax Rates: Evidence from Romanian Listed Companies |
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Authors: | Sebastian Laz?r |
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Institution: | Alexandru Ioan Cuza University, Ia?i, Romania |
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Abstract: | In this paper, I investigate the determinants of firm-specific corporate tax rates for nonfinancial companies listed on the Bucharest Stock Exchange over a twelve-year period (2000-2011). Using a fixed effects panel data estimation model to account for individual firm heterogeneity, I find that capital intensity, leverage, and loss carry-forward provisions negatively affect corporate effective tax rates; company size and labor intensity have no effect; and profitability has a positive effect. Going beyond the deterministic investigation, the paper cannot provide evidence of tax-planning activities for the companies considered. Moreover, legal differences between financial and tax accounting related to provisions are found to have a positive effect on firm-specific effective tax rates. |
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Keywords: | effective tax rates firm-specific determinants tax planning |
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