Article metrics

  • citations in SCindeks: 0
  • citations in CrossRef:0
  • citations in Google Scholar:[=>]
  • visits in previous 30 days:15
  • full-text downloads in 30 days:8
article: 1 from 1  
Back back to result list
Bankarstvo
2019, vol. 48, iss. 3, pp. 12-31
article language: Serbian, English
document type: Original Scientific Paper
published on: 23/11/2019
doi: 10.5937/bankarstvo1903012V
Creative Commons License 4.0
Long-run effective corporate income tax rates in banks: A case of the Republic of Serbia
University of Kragujevac, Faculty of Economy

e-mail: stefan.vrzina@kg.ac.rs

Project

Research and development of the platform for science based management of the scientific and technological development of the Republic of Serbia (MESTD - 47005)

Abstract

The effective tax rate (ETR) is one of the most widely used measures of corporate income tax burdens. Although it is usually calculated at the annual level, the concept of long-run ETRs became popular in the last decade. The objectives of the paper are the comparison of annual and long-run ETRs in banks in Serbia and comparison of the impact of ETR determinants in the short and long run. Research results show that annual and long-run ETRs in banks in Serbia are relatively low. Although the statutory corporate income tax rate is 15%, most observations have ETRs lower than 5%. A considerable portion of the observations have annual ETRs of 0%. Research showed that larger banks have statistically significant higher annual ETRs. However, in the case of long-run ETRs, this finding is not statistically significant. Research results can be of interest for bank management when planning corporate income tax and comparing their tax burden with the industry average, and to national tax authorities when reforming the bank taxation system.

Keywords

References

Albertazzi, U., Gambacorta, L. (2010) Bank profitability and taxation. Journal of Banking & Finance, 34(11): 2801-2810
Bholat, D., Lastra, R.M., Markose, S.M., Miglionico, A., Sen, K. (2018) Non-performing loans at the dawn of IFRS 9: Regulatory and accounting treatment of asset quality. Journal of Banking Regulation, 19(1): 33-54
Demirgüç-Kunt, A., Huizinga, H. (2001) The taxation of domestic and foreign banking. Journal of Public Economics, 79(3): 429-453
Dietrich, A., Wanzenried, G. (2014) The determinants of commercial banking profitability in low-, middle-, and high-income countries. Quarterly Review of Economics and Finance, 54(3): 337-354
Domanović, V., Todorović, V., Savović, S. (2018) Internal factors of bank profitability in the Republic of Serbia. Business and Economic Horizons, 14(3): 659-673
Dyreng, S.D., Hanlon, M., Maydew, E.L. (2008) Long-Run Corporate Tax Avoidance. Accounting Review, 83(1): 61-82
Fernández-Rodríguez, E., Martínez-Arias, A. (2014) Determinants of the Effective Tax Rate in the BRIC Countries. Emerging Markets Finance and Trade, 50(sup3): 214-228
Gawehn, V., Muller, J. (2019) Tax Avoidance: Are Banks Any Different?. Accounting for Transparency Working Paper, No. 2
Goodspeed, T. (2017) Some Simple Analytics of the Taxation of Banks as Corporations: Effects on Loans and Systemic Risk, Deposits, and Borrowing. National Tax Journal, 70(3): 643-672
Hanlon, M., Heitzman, S. (2010) A review of tax research. Journal of Accounting and Economics, 50(2-3): 127-178
Henry, E., Sansing, R. (2018) Corporate tax avoidance: Data truncation and loss firms. Review of Accounting Studies, 23(3): 1042-1070
Knežević, A., Dobromirov, D. (2016) The Determinants of Serbian Banking Industry Profitability. Economic Research, 29(1): 459-474
Marjanović, I., Stanković, J.J., Popović, Ž. (2018) Efficiency Estimation of Commercial Banks Based on Financial Performance: Input Oriented DEA CRS/VRS Models. Economic Themes, 56(2): 239-252
Meeks, G., Meeks, G.J. (2014) Why Are Banks Paying So Little UK Corporation Tax?. Fiscal Studies, 35(4): 511-533
Olamide, F.T., Azeez, O.T., Adewale, O.A. (2019) Planiranje korporativnog poreza i finansijsko poslovanje sistemski važnih banaka u Nigeriji. Ekonomski horizonti, vol. 21, br. 1, str. 15-28
Ricotti, G., Burroni, M., Cuciniello, V., Pisano, E., Zotteri, S. (2006) The Tax Burden on Banks over the Period 2006-2014. SSRN Electronic Journal, (314)
Roe, M., Troge, M. (2018) Containing Systemic Risk by Taxing Banks Properly. Yale Journal on Regulation, 35(1): 181-231
Savić, J., Pešterac, A. (2019) Antecedents of mobile banking: UTAUT model. The European Journal of Applied Economics, vol. 16, br. 1, str. 20-29
Shackelford, D.A., Shevlin, T. (2001) Empirical tax research in accounting. Journal of Accounting and Economics, 31(1-3): 321-387
Stojković, D., Luković, S. (2019) The prospects of capital market development ten years after the global financial crisis. Bankarstvo, vol. 48, br. 2, str. 62-81
Vržina, S. (2018) Corporate Income Tax Planning and Financial Performance: Evidence from Serbia. in: Babić, V. [ed.] Contemporary Issues in Economics, Business and Management, Kragujevac: Faculty of Economics, 463-474
Vržina, S. (2018) Alternativni pristupi merenju efektivne stope poreza na dobitak u bankama. Finansije, vol. 73, br. 1-6, str. 45-65
Vučković-Milutinović, S., Lukić, R. (2013) Analysis of deferred taxes in the business environment in Serbia. Economia: Seria Management, 16(1), str. 25-37
Weigand, R. (2015) A Tale of Two Banking Systems: The Performance of U.S. and European Banks in the 21st Century. SSRN Electronic Journal, 12(1): 146-162