Downloads
Download here
PDF | 1.03 MB
This paper provides novel evidence on the relationship between firm size and effective corporate tax rates, using full-population administrative tax data from 13 countries. In all countries, small firms face lower effective corporate tax rates than mid-sized firms due to reduced statutory tax rates and a higher propensity to register losses. In most countries, effective corporate tax rates fall for the largest firms due to the take-up of tax incentives. As a result, a third of the top 1 percent of firms face effective corporate tax rates below the global minimum tax of 15 percent. The minimum tax could raise corporate tax revenue by 27 percent in the median sample country.
Related content
Authors
Research Fellow World Bank
Pierre is an IFS Research Fellow and an economist in the Macro and Growth Unit of the World Bank's Development Research Group.
Associate Director
Anne is head of the tax and development group at IFS and an honorary faculty member at UCL. Her work focuses on tax policy in lower-income countries.
Roel Dom
research fellow UCL Research Department of Epidemiology and Public Health
Working Paper details
- Publisher
- World Bank Group
Suggested citation
Bachas, P et al. (2023). Effective Tax Rates and Firm Size. London: World Bank Group. Available at: https://ifs.org.uk/publications/effective-tax-rates-and-firm-size (accessed: 8 May 2024).
More from IFS
Understand this issue
Spring Budget 2024: What you need to know
7 March 2024
Spring Budget 2024: the Chancellor’s options
The £600 billion problem awaiting the next government
25 April 2024
Policy analysis
Spring Budget 2024
6 March 2024
Reforming the taxation of non-doms: policy options and uncertainties
4 March 2024
Oil and gas make Scotland’s underlying public finances particularly volatile and uncertain
27 March 2024
Academic research
Does the value-added tax add value? Lessons using administrative data from a diverse set of countries
9 February 2024
Intertemporal income shifting and the taxation of business owner-managers
24 January 2024
Insurance, redistribution, and the inequality of lifetime income
2 November 2023