Banks and Corporate Income Taxation: A Review

45 Pages Posted: 17 Dec 2019 Last revised: 30 Apr 2021

Date Written: March 11, 2020


In this paper, I review the empirical literature in the intersection of banks and corporate income taxation that emerged over the last two decades. To structure the included studies, I use a stakeholder approach and outline how corporate income taxation plays into the relation of banks and their four main stakeholders: bank regulators, customers, investors and tax authorities. I identify six dimension where taxes are important for banks: debt financing, tax incidence, organizational form choices, profit shifting, financial reporting transparency and customers’ tax avoidance. In addition, the studies in this review show that corporate income taxes lead to distortions between debt and equity financing, between on- and off-balance sheet financing, of prices and of investment allocations. My contribution to the literature is threefold: First, I contribute by providing, to the best of my knowledge, a first comprehensive review on this topic. Second, I deduce policy implications from the studies under review. Third, I point to areas of future research in the intersection of bank regulation and tax legislation.

Keywords: corporate income taxes, banks, stakeholder approach, decision-making process

JEL Classification: G21, H22, H25, M41

Suggested Citation

Gawehn, Vanessa, Banks and Corporate Income Taxation: A Review (March 11, 2020). TRR 266 Accounting for Transparency Working Paper Series No. 10, Available at SSRN: or

Vanessa Gawehn (Contact Author)

Paderborn University ( email )

Warburger Str. 100
Paderborn, 33098

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