The Tax Attractiveness Index: Methodology
18 Pages Posted: 7 Aug 2017 Last revised: 4 Nov 2017
Date Written: November 2, 2017
With increasing globalization, countries are competing for companies and investment. Because income tax law has not been globally harmonized so far, international companies view a country’s tax conditions as an important location factor. Corporate location decisions and, therefore, a country’s tax attractiveness depend on a variety of tax factors. In this document, we present our tax measurement tool — the Tax Attractiveness Index — which includes 20 different equally weighted tax components and provides a comprehensive picture of a country’s tax environment. Specifically, the Tax Attractiveness Index covers 20 components, which include Anti-Avoidance Rules, CFC Rules, Corporate Income Tax Rate, Depreciations, EU Member State, Group Taxation Regime, Holding Tax Climate, Loss Carryback, Loss Carryforward, Patent Box Regime, Personal Income Tax Rate, R&D Tax Incentives, Taxation of Capital Gains, Taxation of Dividends Received, Thin Capitalization Rules, Transfer Pricing Rules, Treaty Network, Withholding Tax Rate Dividends, Withholding Tax Rate Interest, and Withholding Tax Rate Royalties.
Keywords: tax attractiveness, international taxation, tax measurement tool, income tax, location factor, statutory tax rate
JEL Classification: C43, H25, H73
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