Prague Economic Papers 2019, 28(6):729-747 | DOI: 10.18267/j.pep.719

Do SMEs Face a Higher Tax Burden? Evidence from Belgian Tax Return Data

Pieter Buyla, Annelies Roggemana
a Ghent University, Corporate Finance and Taxation, Ghent, Belgium

The public debate on taxation of domestic small and medium enterprises (SMEs) versus large and multinational enterprises (MNEs) is highly relevant nowadays. Using confidential tax return data instead of financial statement data, the results indicate that domestic SMEs face on average a 1.6 and 4.8 percentage-point higher effective tax burden compared to large domestic and large MNEs respectively. This suggests that tax incentives for SMEs are inadequate to compensate for the tax advantages of large and internationally operating companies. Furthermore, we show that the use of information built exclusively upon accounting data could bias the results.

Keywords: corporate tax return data, SMEs, effective tax burden, reduced tax rates
JEL classification: F23, H25, H26

Received: July 4, 2018; Accepted: January 24, 2019; Prepublished online: September 24, 2019; Published: December 21, 2019  Show citation

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Buyl, P., & Roggeman, A. (2019). Do SMEs Face a Higher Tax Burden? Evidence from Belgian Tax Return Data. Prague Economic Papers, 28(6), 729-747. doi: 10.18267/j.pep.719
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