Original title: Tax reforms and inter-temporal shifting of corporate income: evidence from tax records in Slovakia
Authors: Bukovina, J. ; Lichard, Tomáš ; Palguta, J. ; Žúdel, B.
Document type: Research reports
Year: 2020
Language: eng
Series: CERGE-EI Working Paper Series, volume: 660
Abstract: We use administrative tax return data for all corporations in Slovakia to demonstrate how policies facilitating inter-temporal income shifting result in elevated corporate income tax (CIT) elasticity estimates. Our strategy exploits kinks in the statutory tax schedules and policy reforms of tax carry-forwards. If inter-temporal shifting is neglected, our bunching estimates imply CIT elasticity of up to 0.65, suggesting a highly sensitive tax base with respect to the marginal tax rate. However, we show that CIT elasticity drops at least 21.2-49.1% when we remove the inter-temporal shifting component. This correction significantly reduces the estimated marginal excess burden of corporate taxation.
Keywords: corporate income tax; elasticity; inter-temporal profit shifting

Institution: Economics Institute AS ČR (web)
Document availability information: Fulltext is available at external website.
External URL: https://www.cerge-ei.cz/pdf/wp/Wp660.pdf
Original record: http://hdl.handle.net/11104/0309826

Permalink: http://www.nusl.cz/ntk/nusl-432915


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