Determinants of Corporate Effective Tax Rate: Evidence for Eurozone companies between 2004-2014

This paper studies the effect of usual determinants of corporate Effective Tax Rates (ETR) based on a panel of 1.942 listed Eurozone companies. First, we carry out a comparative analysis of the Effective Tax Rate with special attention to the differences among the old and new members of the Eurozone. Then, from the Orbis database and the period 2004-2014, we estimate four regressions by random and fixed effects following the methodology of panel data. The results confirm that effective types supported by the new members (Slovenia, Cyprus, Malta, Slovakia, Estonia and Latvia) are significantly lower than those of older members. Moreover, corporate tax burden is negatively conditioned by capital intensity, economic profitability and the cost of debt; but positively conditioned by the level of debt and financial profitability, being a non-linear relationship with the size.