The Tax Attractiveness Index: Methodology

18 Pages Posted: 7 Aug 2017 Last revised: 4 Nov 2017

See all articles by Deborah Schanz

Deborah Schanz

Ludwig Maximilian University of Munich - Faculty of Business Administration (Munich School of Management)

Sara Keller

WHU - Otto Beisheim School of Management

Andreas Dinkel

Ludwig Maximilian University of Munich (LMU)

Jil Fritz

Ludwig Maximilian University of Munich (LMU)

Christian Grosselfinger

Ludwig Maximilian University of Munich (LMU)

Date Written: November 2, 2017

Abstract

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

Suggested Citation

Schanz, Deborah and Keller, Sara and Dinkel, Andreas and Fritz, Jil and Grosselfinger, Christian, The Tax Attractiveness Index: Methodology (November 2, 2017). Available at SSRN: https://ssrn.com/abstract=3013603 or http://dx.doi.org/10.2139/ssrn.3013603

Deborah Schanz

Ludwig Maximilian University of Munich - Faculty of Business Administration (Munich School of Management) ( email )

Ludwigstr. 28 RG IV
Munich, Bavaria 80539
Germany
+49 (0) 89 / 2180 - 3681 (Phone)
+49 (0) 89 / 2180 - 3874 (Fax)

HOME PAGE: http://www.en.steuern.bwl.uni-muenchen.de/index.html

Sara Keller

WHU - Otto Beisheim School of Management ( email )

Burgplatz 2
Vallendar, 56179
Germany

Andreas Dinkel

Ludwig Maximilian University of Munich (LMU) ( email )

Geschwister-Scholl-Platz 1
Munich, DE Bavaria 80539
Germany

Jil Fritz (Contact Author)

Ludwig Maximilian University of Munich (LMU) ( email )

Geschwister-Scholl-Platz 1
Munich, DE Bavaria 80539
Germany

Christian Grosselfinger

Ludwig Maximilian University of Munich (LMU) ( email )

Geschwister-Scholl-Platz 1
Munich, DE Bavaria 80539
Germany

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