An implicit tax rate for non-financial corporations : definition and comparison with other tax indicators

This paper develops a macroeconomic implicit tax rate for non-financial corporations based on national accounts data. This indicator is compared with a more micro-oriented implicit tax rate based on accounting data collected in the BACH database (Bank for the Accounts of Companies Harmonised) of the European Commission and the all-in top statutory corporate tax rate. Implicit tax rates (ITR) are backward looking tax indicators which measure the average effective tax burden. In the publication "Structures of the Taxation systems in the EU" implicit tax rates for different economic functions (consumption, labour capital) are compiled by relating tax revenue data from national accounts to an approximation of the potentially taxable base in the economy. The ITR on capital and business income is a summary indicator for the whole private sector that is sometimes not easy to interpret. The paper explains its merits and drawbacks.