Corporate Income Taxes Around the Globe

Abstract

We collect corporate tax rules data in 174 countries from 2004 to 2023. In addition to the top statutory corporate income tax rates, our data includes tax incentives for debt or equity financing, incentives for investment and innovation, and other aspects of the tax base such as tax loss carrybacks and carryforwards. Our empirical analyses reveal limited evidence consistent with the Desai, Dyck, and Zingales’s (2007) observation that corporate tax rate reductions are accompanied by tax base broadening. Among potential determinants of tax revenues for the government, the top statutory tax rate is the most important in the full sample. Firms’ effective tax rates are additionally positively associated with tax reforms broadening the tax base and negatively associated with reforms narrowing the tax base. However, these relationships become weaker when tax evasion is more prevalent in a country. In high tax evasion countries, the signing of Anti-Tax Evasion Directives is followed by increased tax revenue and firms’ effective tax rates. By contrast, investor protection and political leaning do not appear to affect the impact of tax reforms in a meaningful way.