The Effective Tax Rate of the Largest US and EU Multinationals
Reuven S. Avi-Yonah
University of Michigan Law School
Ben-Gurion University of the Negev
October 25, 2011
U of Michigan Law & Econ, Empirical Legal Studies Center Paper No. 11-015
U of Michigan Public Law Working Paper No. 255
This paper compares the effective tax rates of the 100 largest US multinationals to the 100 largest EU multinationals for the period 2001-2010, based on financial disclosures. The paper finds that despite the higher US statutory rate the effective tax rates are comparable and that EU multinationals tend to have a higher effective tax rate. The likely explanation is that EU corporate taxes have a broader base. The paper concludes that current US tax law does not subject US based multinationals to a competitive disadvantage against their EU based competitors.
Number of Pages in PDF File: 17
Keywords: competitiveness, effective tax rates
JEL Classification: H26
Date posted: October 25, 2011 ; Last revised: September 18, 2012
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