The Effective Tax Rate of the Largest US and EU Multinationals

17 Pages Posted: 25 Oct 2011 Last revised: 18 Sep 2012

Reuven S. Avi-Yonah

University of Michigan Law School

Yaron Lahav

Ben-Gurion University of the Negev

Date Written: October 25, 2011

Abstract

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.

Keywords: competitiveness, effective tax rates

JEL Classification: H26

Suggested Citation

Avi-Yonah, Reuven S. and Lahav, Yaron, The Effective Tax Rate of the Largest US and EU Multinationals (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. Available at SSRN: https://ssrn.com/abstract=1949226 or http://dx.doi.org/10.2139/ssrn.1949226

Reuven S. Avi-Yonah (Contact Author)

University of Michigan Law School ( email )

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Yaron Lahav

Ben-Gurion University of the Negev ( email )

Department of Business Administration
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Beer Sheva 84105, 84105
Israel
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