Effective Corporate Tax Rate [Efektivní sazba korporátní daně]

Statutory tax rates are not considered a suitable measure of a level of taxation. For this reason, a new indicator - the effective tax rate - was introduced. The article provides an overview and critical assessment of methods for determination of the effective tax rate. In particular, the article covers the micro forward looking, micro backward looking and macro backward looking approaches. Different approaches to the effective tax rate determinations appearing in a number of studies are reviewed. To illustrate differences in the approaches, the article includes an analysis based on macro backward looking approach with several modifications. It includes the effective corporate tax computed as a ratio of total corporate tax revenue to GDP and a ratio of total corporate tax revenue to total tax revenue. Further as a ratio of taxation to profit before taxes. It is shown that there is no general method to determine the effective tax rate. A method must be chosen appropriately with respect to the intended purpose of an analysis