Work

Estimating Firm-Level Effective Marginal Tax Rates and the User Cost of Capital in New Zealand

Year: 2013

Type: report

Abstract: Effective marginal tax rates (EMTRs) can be very different from the statutory rate and vary across firms, reflecting such factors as the extent and nature of taxable deductions (losses, depreciation), asset and ownership structures, and debt/equity financing. We estimate firm-specific EMTRs and related user cost of capital (UCC) measures allowing for shareholder-level taxation using data for 2000-2010 from the Longitudinal Business Database. Examining distributions of various UCC measures we find substantial firm-level heterogeneity, systematic changes as a result of tax reforms between 2004 and 2011, and systematic differences between foreign-owned and domestically-owned firms. Choices among alternative UCC measures make a difference to interpretations.

Source: Motu working paper

DOI: 10.29310/wp.2013.14

Authors: Richard Fabling, Norman Gemmell, Richard Kneller, Lynda Sanderson

Institutions: Motu Economic and Public Policy Research, Victoria University of Wellington, University of Nottingham, Treasury, Government of New Zealand

Language: English

Topic: Corporate Taxation and Avoidance

Subfield: Accounting

Field: Business, Management and Accounting

Domain: Social Sciences

Open Access status: green

Funders: Victoria University of Wellington, Victoria University

OpenAlex ID: W2104201151

Cites: 62

Cited by: 33

Related to: 10