Macroeconomics Determinants and Its Impact on the Effective Tax Rate
Macroeconomics Determinants and Its Impact on the Effective Tax Rate

Summary/Abstract: An effective corporate tax rate is an important indicator for fiscal policy in the country. Corporate taxation has a significant impact on the decision-making of companies to locate business activities. The aim of the article is to empirically verify the impact of macroeconomic determinants (nominal tax rate, gross domestic product, inflation, corporation tax revenues, foreign direct investment and unemployment) in the European Union Member States. Input data are from Eurostat and Taxes in Europe for tax revenues. The period under review was the period 2008-2017. Relationships were analyzed by linear regression in the econometric program R. The basic hypothesis, the effective corporate tax rate is mainly influenced by the nominal tax rate from a macroeconomic perspective, was confirmed. But the dependence is less than expected. One consequence of the result achieved may be the way in which companies manage their economic results and thus reduce the amount of tax paid by their activities. Statistical significant determinants have become GDP and unemployment, which point to strong positive dependence. Other determinants did not show a significant relationship to effective corporate taxation.

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