ETA
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The ETA(European Tax Analyzer) is a computer-based model for the computation and comparison of the tax burdens for partnerships and corporations including their shareholders located in different countries over a period of ten years (five countries in the current version (D, F, NL, UK, USA) - extension to EU-25 and other OECD-Members). For that reason all relevant tax provisions, taxes, tax rates and tax bases are taken into account. The European Tax Analyzer is developed and expanded since the foundation of the ZEW in 1991 as a joint research project with the University of Mannheim.[1]
Result
Typical Model Applications:
- Comparison of the international tax burden and structure.
- Evaluation of proposals for fiscal reforms in Europe, Germany and the other observed countries.
- Comparison of domestic legal forms of companies.
- Development and analysis of alternative taxation drafts to reform the company taxation in Europe (change of existing systems, cash-flow-taxes, environmental tax).
- Investigation of the combined effects of taxes on the entrepreneurial investment behaviour in the case of national and cross-border business activities.[1]
The European Tax Analyzer permits the following sensitivity analyses:
- Changes in investment (tangible fixed assets to total balance sheet ratio)
- Changes in financing (debt to equity financing)
- Profitability (profits and losses)
- Personnel or capital intensity (personal/depreciation expenditure to turnover ratio)
- Distribution policy
- Change of tax rates, tax system, tax base, double taxation convention etc.
Standard Model Specification:
Methodological requirements for international tax burden comparisons:
- Inclusion of most relevant provisions of the tax codes.
- Consideration of interactions between the taxes.
- Inclusion of all relevant tax payers.
- Consideration of timing differences through a multi-period approach.
- Existence of a pre-tax Model with identical but flexible data for all countries.[1]
Sectoral coverage:
- Not restricted. For the comparison of effective tax burdens we consider as a base case a typical medium-sized company in the manufacturing sector. The identical pre-tax data of this model company is derived from official German statistics.
- Other sectors cover: chemical engineering, electrical engineering, food and beverage, automotive vehicles, engineering, metal production, buildings and constructions, service and trade, commerce and transport.
Consumption categories:
On corporation level: variable - from full retention to full distribution of profits
On shareholder level: variable - from full saving to full consumption of income
Market Structure:
No restrictions / no assumptions[1]
Required technical infrastructure:
Windows PC
Structure of Input Data and Data Sources:
Structure:
- Economic environment: borrowing interest rate, interest received, inflation, exchange rates
- Company Data: assets/liabilities, procurement/production/sales, further key indicators.
- Shareholder Data: interest in the company, personal status
- Tax Data: relevant taxes, corporation tax system, relevant elements of the tax bases, tax rates.
- Data sources: German Bundesbank Statistics
Model Extensions:
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Links to other Models, Projects, Networks:
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Regional Scope:
The latest version of the European Tax Analyser allows flexible designing of tax systems. At the moment it includes the tax systems of Germany, France, the UK, the Netherlands and the USA. [1]
See also
References
Otto H. Jacobs, C. Spengel (2002): Effective Tax Burden of Companies in Europe - Current Situation, Past Developments and Simulation of Reforms, ZEW Economic Studies 15, Physica, Heidelberg.