Incidence of Bank Corporate Income Taxes Revisited

11 Pages Posted: 15 Jan 2014

See all articles by Gunther Capelle-Blancard

Gunther Capelle-Blancard

Université Paris I Panthéon-Sorbonne - Centre d'Economie de la Sorbonne (CES); PSB Paris School of Business

Olena Havrylchyk

CEPII, Centre d'Etudes Prospectives et d'Info. Internationales, Paris; Université Paris Ouest - Nanterre, La Défense - EconomiX

Date Written: May 24, 2013

Abstract

In this paper, we revisit the question of the banks’ ability to shift corporate income taxes to customers by increasing their net interest margins. We estimate tax incidence for 1,411 European commercial banks over the period 1992-2008. Unlike earlier studies which suffer from endogeneity problems or misspecification of the tax burden, we do not find any significant relationship between implicit taxes and interest margins. Our result is in line with the theory because income tax does not affect the profit maximization function and, consequently, should not be passed on.

Keywords: Bank taxation, European banks, Corporate income tax, Tax incidence

JEL Classification: G21, H25

Suggested Citation

Capelle-Blancard, Gunther and Havrylchyk, Olena, Incidence of Bank Corporate Income Taxes Revisited (May 24, 2013). Available at SSRN: https://ssrn.com/abstract=2378367 or http://dx.doi.org/10.2139/ssrn.2378367

Gunther Capelle-Blancard (Contact Author)

Université Paris I Panthéon-Sorbonne - Centre d'Economie de la Sorbonne (CES) ( email )

106-112 Boulevard de l'hopital
106-112 Boulevard de l'Hôpital
Paris Cedex 13, 75647
France

PSB Paris School of Business ( email )

59 rue Nationale
Paris, 75013
France

Olena Havrylchyk

CEPII, Centre d'Etudes Prospectives et d'Info. Internationales, Paris ( email )

113 rue de Grenelle
Paris, F-75007
France

Université Paris Ouest - Nanterre, La Défense - EconomiX ( email )

200 Avenue de la République
Nanterre cedex, Nanterre Cedex 92000
France

Register to save articles to
your library

Register

Paper statistics

Downloads
25
Abstract Views
280
PlumX Metrics