Determination of an Optimal Corporate Competition Tax Rate: An International Evidence

Determination of an Optimal Corporate Competition Tax Rate: An International Evidence | Research Square window.SnipcartSettings = { analytics: { enabled: false } }; (function() { var accessVector = localStorage.getItem('access_vector') || ''; window.dataLayer = window.dataLayer || []; if (accessVector) { window.dataLayer.push({ user: { profile: { profileInfo: { snid: accessVector } } } }); } })(); (function(w,d,s,l,i){w[l]=w[l]||[];w[l].push({'gtm.start':new Date().getTime(),event:'gtm.js'});var f=d.getElementsByTagName(s)[0],j=d.createElement(s),dl=l!='dataLayer'?'&l='+l:'';j.async=true;j.src='https://www.googletagmanager.com/gtm.js?id='+i+dl;f.parentNode.insertBefore(j,f);})(window,document,'script','dataLayer','GTM-K279D39R'); Browse Preprints In Review Journals COVID-19 Preprints AJE Video Bytes Research Tools Research Promotion AJE Professional Editing AJE Rubriq About Preprint Platform In Review Editorial Policies Our Team Advisory Board Help Center Sign In Submit a Preprint Cite Share Download PDF Research Article Determination of an Optimal Corporate Competition Tax Rate: An International Evidence GNANDE ROMEO BOYE This is a preprint; it has not been peer reviewed by a journal. https://doi.org/ 10.21203/rs.3.rs-6311851/v1 This work is licensed under a CC BY 4.0 License Status: Posted Version 1 posted You are reading this latest preprint version Abstract The international agreement on a corporate minimum tax, has set a rate of 15% as the floor rate of corporate tax rate in order to regulate competition between states in the context of attracting firms. But this rate does not seem to be relevant, since it is much discussed in the literature as to its applicability. The question that arises is, what is the optimal corporate tax rate that could be set in the context of this tax competition between states? It is a question of identifying the optimal corporate tax rate that maximizes the corporate tax rate elasticity of tax buoyancy. The objective of this paper is to determine the corporate tax rate that could meet the approval of firms. This paper based on a theoretical and econometrical model but not on an ad-hoc econometric model as is in previous studies. We use a random coefficients model. The main results establish that the optimal corporate tax rate differs from one country to another due to the structure of the country's economy. Nevertheless, it exists an optimal corporate competition tax rate which is 29.32% for OECD countries and 28.27% for non-OECD countries. JEL Codes : H21, H26, C61, C51. Tax competition Tax buoyancy Theoretical Model Empirical model Full Text Additional Declarations No competing interests reported. Cite Share Download PDF Status: Posted Version 1 posted You are reading this latest preprint version Research Square lets you share your work early, gain feedback from the community, and start making changes to your manuscript prior to peer review in a journal. As a division of Research Square Company, we’re committed to making research communication faster, fairer, and more useful. We do this by developing innovative software and high quality services for the global research community. Our growing team is made up of researchers and industry professionals working together to solve the most critical problems facing scientific publishing. Also discoverable on Platform About Our Team In Review Editorial Policies Advisory Board Help Center Resources Author Services Accessibility API Access RSS feed Manage Cookie Preferences © Research Square 2026 | ISSN 2693-5015 (online) Privacy Policy Terms of Service Do Not Sell My Personal Information {"props":{"pageProps":{"initialData":{"identity":"rs-6311851","acceptedTermsAndConditions":true,"allowDirectSubmit":true,"archivedVersions":[],"articleType":"Research Article","associatedPublications":[],"authors":[{"id":438770645,"identity":"d5e4e249-0ebc-4842-92c9-a352d710bfc6","order_by":0,"name":"GNANDE ROMEO BOYE","email":"data:image/png;base64,iVBORw0KGgoAAAANSUhEUgAAAZAAAAAyAQMAAABI0h/eAAAABlBMVEX///8AAABVwtN+AAAACXBIWXMAAA7EAAAOxAGVKw4bAAAAz0lEQVRIiWNgGAWjYLACxgYgwQ4iDCxI0cJzAKRFghQtEgkgJhFazNu7Ex983GGT2C/5/OqGHwUSDPzt3Ql4tcicObvZcOaZtMSZs3PKbvYAHSZx5uwGvFokJHK3SfO2HU7ccDsn7QYPUIuBRC5BLdt/g7Tsv3km7eYfIrVsYwbbIsF+7DZxtvCc3SwJ9IvxjDM5bLdlDCR4CPuFvXfjB2CIyfa3H392880fGzn+9l78WmDAsYGBxwDE4CFKOQjYA1PMA6JVj4JRMApGwcgCAJF2SuwOkgmWAAAAAElFTkSuQmCC","orcid":"","institution":"Université Félix Houphouët-Boigny","correspondingAuthor":true,"prefix":"","firstName":"GNANDE","middleName":"ROMEO","lastName":"BOYE","suffix":""}],"badges":[],"createdAt":"2025-03-26 11:23:30","currentVersionCode":1,"declarations":"","doi":"10.21203/rs.3.rs-6311851/v1","doiUrl":"https://doi.org/10.21203/rs.3.rs-6311851/v1","draftVersion":[],"editorialEvents":[],"editorialNote":"","failedWorkflow":false,"files":[{"id":83416094,"identity":"9533a7de-8ef7-47cb-9b98-44f460d0006c","added_by":"auto","created_at":"2025-05-25 19:46:26","extension":"pdf","order_by":1,"title":"","display":"","copyAsset":false,"role":"manuscript-pdf","size":1789812,"visible":true,"origin":"","legend":"","description":"","filename":"DeterminationofanOptimalInternationaltaxandpublicfinance.pdf","url":"https://assets-eu.researchsquare.com/files/rs-6311851/v1_covered_b1d08826-14e3-4a12-9cc0-d3bbef1d2a34.pdf"}],"financialInterests":"No competing interests reported.","formattedTitle":"Determination of an Optimal Corporate Competition Tax Rate: An International Evidence","fulltext":[],"fulltextSource":"","fullText":"","funders":[],"hasAdminPriorityOnWorkflow":false,"hasManuscriptDocX":false,"hasOptedInToPreprint":true,"hasPassedJournalQc":"","hasAnyPriority":false,"hideJournal":true,"highlight":"","institution":"","isAcceptedByJournal":false,"isAuthorSuppliedPdf":true,"isDeskRejected":"","isHiddenFromSearch":false,"isInQc":false,"isInWorkflow":false,"isPdf":true,"isPdfUpToDate":true,"isWithdrawnOrRetracted":false,"journal":{"display":true,"email":"[email protected]","identity":"researchsquare","isNatureJournal":false,"hasQc":true,"allowDirectSubmit":true,"externalIdentity":"","sideBox":"","snPcode":"","submissionUrl":"/submission","title":"Research Square","twitterHandle":"researchsquare","acdcEnabled":true,"dfaEnabled":false,"editorialSystem":"","reportingPortfolio":"","inReviewEnabled":false,"inReviewRevisionsEnabled":true},"keywords":"Tax competition, Tax buoyancy, Theoretical Model, Empirical model","lastPublishedDoi":"10.21203/rs.3.rs-6311851/v1","lastPublishedDoiUrl":"https://doi.org/10.21203/rs.3.rs-6311851/v1","license":{"name":"CC BY 4.0","url":"https://creativecommons.org/licenses/by/4.0/"},"manuscriptAbstract":"\u003cp\u003eThe international agreement on a corporate minimum tax, has set a rate of 15% as the floor rate of corporate tax rate in order to regulate competition between states in the context of attracting firms. But this rate does not seem to be relevant, since it is much discussed in the literature as to its applicability. The question that arises is, what is the optimal corporate tax rate that could be set in the context of this tax competition between states? It is a question of identifying the optimal corporate tax rate that maximizes the corporate tax rate elasticity of tax buoyancy. The objective of this paper is to determine the corporate tax rate that could meet the approval of firms. This paper based on a theoretical and econometrical model but not on an ad-hoc econometric model as is in previous studies. We use a random coefficients model. The main results establish that the optimal corporate tax rate differs from one country to another due to the structure of the country's economy. Nevertheless, it exists an optimal corporate competition tax rate which is 29.32% for OECD countries and 28.27% for non-OECD countries.\u003c/p\u003e\n\u003cp\u003e\u003cu\u003eJEL Codes\u003c/u\u003e : H21, H26, C61, C51.\u003c/p\u003e","manuscriptTitle":"Determination of an Optimal Corporate Competition Tax Rate: An International Evidence","msid":"","msnumber":"","nonDraftVersions":[{"code":1,"date":"2025-04-24 10:24:10","doi":"10.21203/rs.3.rs-6311851/v1","editorialEvents":[{"type":"communityComments","content":0}],"status":"published","journal":{"display":true,"email":"[email protected]","identity":"researchsquare","isNatureJournal":false,"hasQc":true,"allowDirectSubmit":true,"externalIdentity":"","sideBox":"","snPcode":"","submissionUrl":"/submission","title":"Research Square","twitterHandle":"researchsquare","acdcEnabled":true,"dfaEnabled":false,"editorialSystem":"","reportingPortfolio":"","inReviewEnabled":false,"inReviewRevisionsEnabled":true}}],"origin":"","ownerIdentity":"1d65207e-5b57-4b2f-9744-dc7c9bbdee7c","owner":[],"postedDate":"April 24th, 2025","published":true,"recentEditorialEvents":[],"rejectedJournal":[],"revision":"","amendment":"","status":"posted","subjectAreas":[],"tags":[],"updatedAt":"2025-05-25T19:38:16+00:00","versionOfRecord":[],"versionCreatedAt":"2025-04-24 10:24:10","video":"","vorDoi":"","vorDoiUrl":"","workflowStages":[]},"version":"v1","identity":"rs-6311851","journalConfig":"researchsquare"},"__N_SSP":true},"page":"/article/[identity]/[[...version]]","query":{"redirect":"/article/rs-6311851","identity":"rs-6311851","version":["v1"]},"buildId":"8U1c8b4HqxoKbykW_rLl7","isFallback":false,"isExperimentalCompile":false,"dynamicIds":[84888],"gssp":true,"scriptLoader":[]}