Volume 47 (2019) / Issue 12

Paul Klaassen, Arco Bobeldijk, 'Country-by-Country Reporting and the Effective Tax Rate: How Effective Is the Effective Tax Rate in Detecting Tax Avoidance in Country-by-Country Reports?' (2019) 47 Intertax, Issue 12, pp. 1057–1069


A low effective tax rate in combination with a high profit can be an important indicator of possible tax avoidance. In this article, we will discuss the limitations of the definitions of two columns in the country-by-country report, namely ‘profit (loss) before income tax’ and ‘income tax accrued – current year’. We will conclude that the effective tax rate calculated based on the country-by-country report can not be accurately used in high level risk analyses.

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ISSN: 0165-2826
ID: TAXI2019108