The Heterogeneity of Implicit Tax Rates on Profits in France: Descriptive Findings and Explanatory Factors

Motivation: The French statutory corporate income tax (CIT) rate, i.e. the rate set by the law that applies to corporate income, is among the highest in the OECD. However, this statutory rate is only one of many features of the tax system that influence business behaviour. Companies are also likely to consider other provisions of the tax system – including tax benefits, surcharges – that affect the amount of taxes they owe.
What is the effective level of the income tax rate in France? What has been the evolution of this rate by type of company over the last ten years in France?

Project: This project was led by three IPP researchers in collaboration with the legal teams of the Friedland Institute (CCI Île-de-France). The aim is to systematically use company tax data from 2000 to 2015 in order to construct the average implicit corporate tax rate. This rate is calculated by dividing the corporation tax due for a given year by the declared amount of the company’s profits. It allows this rate to be broken down by company size, to characterize the individual dynamics of firms or the dispersion of implicit rates between companies within a company category.

Funding: The Île-de-France Chamber of Commerce contributes to the financing of this project through the Friedland Institute.

Researchers: Laurent Bach, Antoine Bozio, Clément Malgouyres.


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