Business and institutional determinants of effective tax rates in Serbian banks
The objective of the current paper is to study the influence of the selected business and institutional determinants on the annual effective tax rates in banks in Serbia. Panel data regression models are applied on 113 observations, covering the period from 2017 to 2021, where the accounting and cur...
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| Format: | Article |
| Language: | English |
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University of Kragujevac
2023-04-01
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| Series: | Economic Horizons |
| Subjects: | |
| Online Access: | https://horizonti.ekfak.kg.ac.rs/sites/default/files/Casopis/2023_1/EH_2023_1_en_4_MP.pdf |
| _version_ | 1797685901967491072 |
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| author | Maja Putica |
| author_facet | Maja Putica |
| author_sort | Maja Putica |
| collection | DOAJ |
| description | The objective of the current paper is to study the influence of the selected business and institutional determinants on the annual effective tax rates in banks in Serbia. Panel data regression models are applied on 113 observations, covering the period from 2017 to 2021, where the accounting and current effective tax rates are used as a measure of the actual tax burden. The results show that the effective tax rate in banks in Serbia is significantly below the statutory level. Furthermore, for each data set, the coefficients of changes in the effective tax rate are calculated, and the most adequate model is selected using the Hausman and Breusch-Pagan tests. In the first model, the biggest change in the effective tax rates is caused by change in leverage, merger and acquisition processes and the bank size. The presence of loan loss provisions in the model completely highlights the impact of profitability and leverage. Finally, in the last model, banks with a profit before tax can manage effective tax rates and tax burdens by regulating capitalization levels. The results of this study are of interest for economy creators and for business managers in banks, helping them in effective tax planning and managing the results.
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| first_indexed | 2024-03-12T00:58:01Z |
| format | Article |
| id | doaj.art-4931a04964c44c26ad6f5ddbd14ab93d |
| institution | Directory Open Access Journal |
| issn | 1450-863X 2217-9232 |
| language | English |
| last_indexed | 2024-03-12T00:58:01Z |
| publishDate | 2023-04-01 |
| publisher | University of Kragujevac |
| record_format | Article |
| series | Economic Horizons |
| spelling | doaj.art-4931a04964c44c26ad6f5ddbd14ab93d2023-09-14T11:54:39ZengUniversity of KragujevacEconomic Horizons1450-863X2217-92322023-04-01251314810.5937/ekonhor2301035PBusiness and institutional determinants of effective tax rates in Serbian banksMaja Putica0OTP bank Serbia a.d. Novi Sad, The Republic of SerbiaThe objective of the current paper is to study the influence of the selected business and institutional determinants on the annual effective tax rates in banks in Serbia. Panel data regression models are applied on 113 observations, covering the period from 2017 to 2021, where the accounting and current effective tax rates are used as a measure of the actual tax burden. The results show that the effective tax rate in banks in Serbia is significantly below the statutory level. Furthermore, for each data set, the coefficients of changes in the effective tax rate are calculated, and the most adequate model is selected using the Hausman and Breusch-Pagan tests. In the first model, the biggest change in the effective tax rates is caused by change in leverage, merger and acquisition processes and the bank size. The presence of loan loss provisions in the model completely highlights the impact of profitability and leverage. Finally, in the last model, banks with a profit before tax can manage effective tax rates and tax burdens by regulating capitalization levels. The results of this study are of interest for economy creators and for business managers in banks, helping them in effective tax planning and managing the results. https://horizonti.ekfak.kg.ac.rs/sites/default/files/Casopis/2023_1/EH_2023_1_en_4_MP.pdftax burdeneffective tax rateleverageloan loss provisionscapitalizationprofitability |
| spellingShingle | Maja Putica Business and institutional determinants of effective tax rates in Serbian banks Economic Horizons tax burden effective tax rate leverage loan loss provisions capitalization profitability |
| title | Business and institutional determinants of effective tax rates in Serbian banks |
| title_full | Business and institutional determinants of effective tax rates in Serbian banks |
| title_fullStr | Business and institutional determinants of effective tax rates in Serbian banks |
| title_full_unstemmed | Business and institutional determinants of effective tax rates in Serbian banks |
| title_short | Business and institutional determinants of effective tax rates in Serbian banks |
| title_sort | business and institutional determinants of effective tax rates in serbian banks |
| topic | tax burden effective tax rate leverage loan loss provisions capitalization profitability |
| url | https://horizonti.ekfak.kg.ac.rs/sites/default/files/Casopis/2023_1/EH_2023_1_en_4_MP.pdf |
| work_keys_str_mv | AT majaputica businessandinstitutionaldeterminantsofeffectivetaxratesinserbianbanks |