Resumen de 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?
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.
