Effective Tax Rate in Portugal: Determinants and Financial Reporting Impact

28 Pages Posted: 23 Nov 2012 Last revised: 27 Nov 2012

See all articles by Ana Costa

Ana Costa

University of Porto - Faculty of Economics

F. Vitorino Martins

Univ. of Porto, Fac. of Economics

Elisio Brandao

Universidade do Porto - Faculdade de Economia (FEP)

Date Written: November 23, 2012

Abstract

In academic literature, it is usual to analyze the variability of effective tax rates, because some authors try to justify the reasons for the existence of differences between these taxes and statutory ones. However, this kind of research has never been done for the Portuguese case. The objective of this study is to examine the relationship between the effective tax rate and some specific characteristics of Portuguese companies. On the other hand, in the analyzed period we can verify the change of accounting standards which happened in Portugal in 2010, that is why it is also important to evaluate the impact of these modifications on the studied relations.

Therefore, the results show that some characteristics, such as leverage, capital intensity, inventory intensity and profitability are statistically significant in the estimation of effective tax rates supported by companies. On the other hand, it has been checked that, according to the mean and median equality tests done to the dependent variables, we reject the hypothesis of these measures being equals when we compare 2010 with the other years. In the case of the test of permanent structures on the level of regressions, it has been verified that it is not identical either.

In conclusion, we can say that the introduction of international accounting standards might have produced accounting impacts, as fiscal ones.

Keywords: effective tax rate, financial report, accounting harmonization

JEL Classification: H20, M41, M48

Suggested Citation

Costa, Ana and Martins, F. Vitorino and Brandão, Elísio Fernando Moreira, Effective Tax Rate in Portugal: Determinants and Financial Reporting Impact (November 23, 2012). Available at SSRN: https://ssrn.com/abstract=2180032 or http://dx.doi.org/10.2139/ssrn.2180032

Ana Costa (Contact Author)

University of Porto - Faculty of Economics ( email )

Rua Dr. Roberto Frias
Porto, 4200-464
Portugal

F. Vitorino Martins

Univ. of Porto, Fac. of Economics ( email )

Rua Dr. Roberto Frias
4200-464 Porto
Portugal

Elísio Fernando Moreira Brandão

Universidade do Porto - Faculdade de Economia (FEP) ( email )

Rua Roberto Frias
s/n
Porto, 4200-464
Portugal

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