Abstract
This paper introduces the Tax Complexity Index (TCI). The TCI comprehensively measures the complexity of countries’ corporate income tax systems faced by multinational corporations. It builds on surveys of highly experienced tax consultants of the largest international tax services networks. The TCI is composed of a tax code subindex covering tax regulations and a tax framework subindex covering tax processes and features. For a sample of 100 countries, we find that tax complexity varies considerably across countries, and tax code and framework complexity also vary within countries. Among others, tax complexity is strongly driven by the complexity of transfer pricing regulations in the tax code and tax audits in the tax framework. When analyzing the associations with other country characteristics, we identify different patterns. For example, we find a positive association of GDP with tax code complexity and a negative association with tax framework complexity, suggesting that highly economically developed countries tend to have more complex tax codes and less complex frameworks. Overall, the tax complexity measures can serve as valuable proxies in future research and supportive tools for a variety of firm decisions and national and international tax policy discussions.
| Original language | English |
|---|---|
| DOIs | |
| Publication status | Published - 2020 |
Publication series
| Series | WU International Taxation Research Paper Series |
|---|---|
| Number | 2019-06 |
Austrian Classification of Fields of Science and Technology (ÖFOS)
- 101017 Game theory
- 502
- 502047 Economic theory
- 501006 Experimental psychology
WU Working Paper Series
- WU International Taxation Research Paper Series
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Sureth-Sloane, C., Hoppe, T., Schanz, D., & Sturm, S. (2020). The Tax Complexity Index – A Survey-Based Country Measure of Tax Code and Framework Complexity. WU International Taxation Research Paper Series No. 2019-06 https://doi.org/10.2139/ssrn.3469663
Sureth-Sloane, Caren ; Hoppe, Thomas ; Schanz, Deborah et al. / The Tax Complexity Index – A Survey-Based Country Measure of Tax Code and Framework Complexity. 2020. (WU International Taxation Research Paper Series; No. 2019-06).
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abstract = "This paper introduces the Tax Complexity Index (TCI). The TCI comprehensively measures the complexity of countries{\textquoteright} corporate income tax systems faced by multinational corporations. It builds on surveys of highly experienced tax consultants of the largest international tax services networks. The TCI is composed of a tax code subindex covering tax regulations and a tax framework subindex covering tax processes and features. For a sample of 100 countries, we find that tax complexity varies considerably across countries, and tax code and framework complexity also vary within countries. Among others, tax complexity is strongly driven by the complexity of transfer pricing regulations in the tax code and tax audits in the tax framework. When analyzing the associations with other country characteristics, we identify different patterns. For example, we find a positive association of GDP with tax code complexity and a negative association with tax framework complexity, suggesting that highly economically developed countries tend to have more complex tax codes and less complex frameworks. Overall, the tax complexity measures can serve as valuable proxies in future research and supportive tools for a variety of firm decisions and national and international tax policy discussions.",
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Sureth-Sloane, C, Hoppe, T, Schanz, D & Sturm, S 2020 'The Tax Complexity Index – A Survey-Based Country Measure of Tax Code and Framework Complexity' WU International Taxation Research Paper Series, no. 2019-06. https://doi.org/10.2139/ssrn.3469663
The Tax Complexity Index – A Survey-Based Country Measure of Tax Code and Framework Complexity. / Sureth-Sloane, Caren; Hoppe, Thomas; Schanz, Deborah et al.
2020.
Publication: Working/Discussion Paper › WU Working Paper
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AU - Hoppe, Thomas
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AB - This paper introduces the Tax Complexity Index (TCI). The TCI comprehensively measures the complexity of countries’ corporate income tax systems faced by multinational corporations. It builds on surveys of highly experienced tax consultants of the largest international tax services networks. The TCI is composed of a tax code subindex covering tax regulations and a tax framework subindex covering tax processes and features. For a sample of 100 countries, we find that tax complexity varies considerably across countries, and tax code and framework complexity also vary within countries. Among others, tax complexity is strongly driven by the complexity of transfer pricing regulations in the tax code and tax audits in the tax framework. When analyzing the associations with other country characteristics, we identify different patterns. For example, we find a positive association of GDP with tax code complexity and a negative association with tax framework complexity, suggesting that highly economically developed countries tend to have more complex tax codes and less complex frameworks. Overall, the tax complexity measures can serve as valuable proxies in future research and supportive tools for a variety of firm decisions and national and international tax policy discussions.
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Sureth-Sloane C, Hoppe T, Schanz D, Sturm S. The Tax Complexity Index – A Survey-Based Country Measure of Tax Code and Framework Complexity. 2020. doi: 10.2139/ssrn.3469663
I am an expert in international taxation and corporate income tax systems, with a deep understanding of the Tax Complexity Index (TCI) and its implications for multinational corporations. My expertise is grounded in extensive knowledge of tax regulations, frameworks, and the intricate dynamics of transfer pricing.
The TCI, as outlined in the paper "The Tax Complexity Index – A Survey-Based Country Measure of Tax Code and Framework Complexity" by Caren Sureth-Sloane, Thomas Hoppe, Deborah Schanz, and Susann Sturm, is a groundbreaking tool that comprehensively measures the complexity of countries' corporate income tax systems faced by multinational corporations. The index is not just a theoretical construct but is based on surveys conducted with highly experienced tax consultants from the largest international tax services networks.
The TCI is a composite measure consisting of two subindices: the tax code subindex, which covers tax regulations, and the tax framework subindex, which encompasses tax processes and features. The authors conducted their analysis on a sample of 100 countries, revealing significant variations in tax complexity both across and within countries.
Crucially, the paper identifies key drivers of tax complexity, highlighting the significant impact of transfer pricing regulations in the tax code and tax audits in the tax framework. These findings underscore the practical challenges faced by multinational corporations operating in different tax jurisdictions.
The paper also explores the associations between tax complexity and various country characteristics. Notably, it identifies a positive association between a country's GDP and tax code complexity, suggesting that economically developed countries tend to have more intricate tax codes. Conversely, there is a negative association between GDP and tax framework complexity, indicating that highly developed countries may have less complex tax frameworks.
In conclusion, the Tax Complexity Index serves as a valuable proxy for understanding and comparing the complexities of corporate income tax systems globally. Its application extends beyond research and can provide support for a range of firm decisions, as well as inform national and international tax policy discussions. This paper contributes significantly to the field of international taxation and is a crucial resource for professionals, policymakers, and researchers in the realm of tax complexity.
