Heterogeneity in Effective Tax Rate Trends: Evidence from Finnish Corporate Tax Returns

Mikko Vanhala; Marika Viertola

doi:10.2478/ntaxj-2025-0002

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Heterogeneity in Effective Tax Rate Trends: Evidence from Finnish Corporate Tax Returns

Nordic Tax Journal

AHEAD OF PRINT

By: Mikko Vanhala and Marika Viertola

Open Access

|May 2026

Figures & Tables

The evolution of statutory corporate income tax rates during 1980–2020. Notes: EU and OECD means are unweighted averages. Data source: Tax Foundation.

Evolution of CASH ETR quantiles 0.1, 0.25, 0.5, 0.75, and 0.9 separately for MNEs and domestics. Notes: The figure plots ETR quantiles 0.1, 0.25, 0.5, 0.75, and 0.9 against the sample years 2000–2015 using the main data source, YRTTI tax return data. The dashed line represents the Finnish statutory corporate income tax rate. Finnish MNEs include Finnish-headquartered multinationals. Foreign MNEs include subsidiaries of foreign-headquartered multinationals that are located in Finland. Domestic groups include purely domestic corporate groups and domestic firms include domestic standalone firms.

Yearly share of firms with CASH ETR above and below the statutory tax rate for MNEs and domestics. Notes: YRTTI data, full sample. Left panel figure (MNE) includes Finnish-headquartered multinationals and Finnish subsidiaries of foreign-headquartered multinationals. Right panel figure (Domestic) includes domestic corporate groups and domestic standalone firms. ETR=STR includes firms with an ETR within ±0.01% of the STR.

Distributions of the difference between CASH ETR and statutory tax rate (STR) in 2000 and 2015. Notes: YRTTI data, full sample for years 2000 and 2015. The distribution is winsorized from right at 0.2 to increase readability, that is, all values above 0.2 are set to 0.2. The distribution of values above 0.2 is flat with a very low density.

Trend coefficients over the CASH ETR distribution for different sub-samples. Notes: The figures plot the coefficient point estimates of Trend for every quantile of the CASH ETR distribution for the four different firm types. The shaded blue area describes the 95% confidence interval of the point estimates. The used data is the YRTTI tax return data for 2000–2015. Finnish MNEs include Finnish-headquartered multinationals. Foreign MNEs include subsidiaries of foreign-headquartered multinationals that are located in Finland. Domestic groups include purely domestic corporate groups and domestic firms include domestic standalone firms.

Share of firms reporting zero profit by year. Notes: The figure illustrates the evolution of firms reporting zero taxable profit and zero accounting profit. The used data source is the YRTTI tax return data for 2007–2015. Firm is considered as reporting zero profit if the taxable (accounting) profit to total assets share of the firm falls between −0.5 and 0.5 percent. Haven affiliated MNEs include Finnish-headquartered multinationals with at least one affiliate located in a tax haven country defined by Menkhoff & Miethe (2019). Non-haven affiliated MNEs include Finnish-headquartered multinationals with no affiliates in tax haven countries. Foreign MNEs include subsidiaries of foreign-headquartered multinationals that are located in Finland. Domestic groups include purely domestic corporate groups and domestic firms include domestic standalone firms. Accounting profit includes all firms due to the share being very similar across the different groups of firms.

Histograms of ROA and the ratio of taxable profits to total assets. Notes: The histograms illustrate the distribution of observations around zero return on assets (ROA) and the ratio of taxable profits to total assets. The top panel figures use all observations whereas the bottom panel figures discard observations with any deducted losses. Left panel figures show the histograms of ROA and right panel figures of taxable profits to total assets. The data source is the YRTTI tax return data for 2007–2015. Haven affiliated MNEs include Finnish-headquartered multinationals with at least one affiliate located in a tax haven country defined by Menkhoff & Miethe (2019). Non-haven affiliated MNEs include Finnish-headquartered multinationals with no affiliates in tax haven countries. Foreign MNEs include subsidiaries of foreign-headquartered multinationals that are located in Finland. Domestic groups include purely domestic corporate groups and domestic firms include domestic standalone firms.

The yearly share of loss-making firms (i.e.,negative accounting profits). Notes: The data source is the YRTTI tax return data for 2000–2015. MNE includes Finnish-headquartered multinationals as well as subsidiaries of foreign-headquartered multinationals that are located in Finland. Domestic includes domestic corporate groups and domestic standalone firms.

UQR results for the YRTTI sample of foreign multinational enterprises_

	OLS	Unconditional Quantile Regression
	(1) OLS	(2) Q10	(3) Q25	(4) Q50	(5) Q75	(6) Q90
Trend	−0.00162* (−1.66)	0 (.)	−0.00712** (−2.36)	0.00208** (2.40)	−0.00152** (−2.27)	−0.000497 (−0.24)
STR	0.581*** (6.78)	0 (.)	−0.578** (−2.11)	1.745*** (18.94)	0.645*** (10.12)	0.845*** (4.28)
Controls for firm characteristics
Pre-tax income growth	−164.1*** (−2.77)	0 (.)	−1054.5*** (−6.16)	−161.1*** (−3.78)	−4.383 (−0.16)	193.9* (1.74)
Log total assets	−0.00251 (−0.70)	0 (.)	0.0410*** (3.67)	−0.00127 (−0.43)	−0.00649*** (−3.02)	−0.0217*** (−2.96)
Fixed assets	−0.0365** (−2.51)	0 (.)	−0.145*** (−3.04)	−0.0532*** (−4.44)	−0.0124 (−1.44)	0.0214 (0.79)
ROA	−0.0565*** (−4.03)	0 (.)	0.370*** (8.42)	0.0404*** (3.41)	−0.102*** (−10.64)	−0.395*** (−12.09)
Debt-to-Equity	−0.00000910** (−2.06)	0 (.)	−0.0000220 (−1.06)	−0.00000633* (−1.74)	−0.00000165 (−0.64)	−0.0000147* (−1.94)
Paid dividends	0.144*** (6.00)	0 (.)	0.254*** (4.19)	0.0713*** (3.33)	0.177*** (7.31)	0.168** (2.26)
Controls for book-tax differences
Special items	1.337*** (9.75)	0 (.)	3.897*** (7.58)	1.137*** (8.52)	0.497*** (5.72)	1.108*** (4.40)
R&D expenses	−0.130 (−0.50)	0 (.)	−0.562 (−0.66)	0.187 (0.91)	0.164 (1.08)	0.536 (0.90)
Intra-group interest payments	−2.357*** (−7.76)	0 (.)	−5.948*** (−5.47)	−2.671*** (−10.22)	−1.331*** (−7.21)	−1.010* (−1.78)
Statutory provisions	0.974** (2.03)	0 (.)	−0.523 (−0.35)	0.483 (1.30)	0.711** (2.35)	3.022*** (2.69)
Δ Book-tax amortization diff.	−1.574*** (−4.87)	0 (.)	−1.057 (−1.05)	−2.107*** (−7.02)	−1.503*** (−6.32)	−1.967*** (−2.84)
Δ Book-tax depreciation diff.	−3.914*** (−3.23)	0 (.)	−7.420 (−1.55)	−2.217** (−2.09)	−0.926 (−1.16)	−3.740* (−1.67)
Received dividends	−0.0527** (−2.18)	0 (.)	−0.0624 (−1.05)	−0.00125 (−0.06)	−0.184*** (−7.53)	−0.106 (−1.36)
Contributions and subsidies	2.469** (2.25)	0 (.)	1.584 (0.55)	1.692* (1.83)	1.959** (2.20)	5.615** (2.16)
NOL	−0.0824*** (−6.10)	0 (.)	−0.328*** (−7.16)	−0.0235** (−2.42)	−0.0213*** (−3.04)	−0.0746*** (−3.31)
△NOL	0.371*** (7.97)	0 (.)	1.621*** (10.09)	0.336*** (9.27)	0.0192 (0.78)	−0.166* (−1.88)

Constant	0.00344 (0.03)	0.0268 (.)	−0.331 (−0.71)	−0.279*** (−2.95)	0.148** (2.13)	0.280 (1.45)
Firm & industry FE	Yes	Yes	Yes	Yes	Yes	Yes

N	13325	13557	13557	13557	13557	13557
R-squared	0.560	.	0.628	0.568	0.466	0.382
Adj. R-squared	0.484	.	0.556	0.485	0.362	0.262

Robustness of main results to the definition of received dividends_

	(1) All firms	(2) Finnish MNEs	(3) Foreign MNEs	(4) Domestic groups	(5) Domestic firms
Trend	−0.000852*** (−3.67)	−0.00581*** (−4.31)	−0.00112 (−1.18)	−0.000650 (−0.54)	−0.000486** (−1.99)
STR	0.657*** (28.29)	0.342*** (2.59)	0.603*** (7.12)	0.751*** (6.67)	0.682*** (27.27)
Controls for firm characteristics
Pre-tax income growth	−93.72*** (−7.31)	319.3 (1.57)	−157.5*** (−2.65)	333.5** (2.15)	−93.68*** (−7.07)
Log total assets	−0.00385*** (−4.15)	0.00492 (0.87)	−0.00158 (−0.44)	0.00387 (0.69)	−0.00444*** (−4.52)
Fixed assets	−0.0366*** (−11.02)	−0.0256 (−1.31)	−0.0284** (−1.98)	−0.0799*** (−4.84)	−0.0349*** (−9.85)
ROA	−0.0460*** (−13.18)	−0.0246 (−0.97)	−0.0427*** (−3.06)	−0.109*** (−5.78)	−0.0446*** (−12.03)
Debt-to-Equity	−0.0000469*** (−29.27)	−0.0000201*** (−2.85)	−0.0000101** (−2.30)	−0.0000298*** (−4.12)	−0.0000516*** (−28.89)
Paid dividends	0.165*** (27.16)	0.208*** (3.66)	0.107*** (7.42)	0.201*** (5.13)	0.171*** (25.24)
Controls for book-tax differences
Special items	1.767*** (34.86)	0.641*** (5.20)	1.365*** (10.08)	1.033*** (5.85)	2.154*** (35.64)
R&D expenses	−0.0907 (−0.84)	−0.104 (−0.40)	−0.0784 (−0.31)	−0.102 (−0.24)	−0.0693 (−0.50)
Intra-group interest payments	−1.968*** (−11.54)	−1.781*** (−2.96)	−2.376*** (−8.03)	−3.513*** (−4.43)	−1.441*** (−6.40)
Statutory provisions	0.601*** (2.68)	−0.966 (−1.21)	0.966** (2.03)	2.427** (2.20)	0.696*** (2.60)
Δ Book-tax amortization diff.	−2.053*** (−18.08)	−1.900*** (−6.24)	−1.584*** (−4.86)	−1.769*** (−5.43)	−2.175*** (−15.82)
Δ Book-tax depreciation diff.	−2.508*** (−5.93)	−2.467** (−2.47)	−3.165*** (−2.58)	−1.968 (−1.43)	−2.202*** (−4.11)
Tax-free dividends received	−1.510*** (−30.70)	−1.475*** (−13.73)	−1.284*** (−10.63)	−1.419*** (−15.00)	−1.520*** (−17.77)
Contributions and subsidies	3.047*** (19.45)	1.307* (1.65)	2.431** (2.22)	2.024*** (2.75)	3.209*** (19.50)
NOL	−0.126*** (−23.96)	−0.102*** (−3.16)	−0.0826*** (−6.11)	−0.125*** (−2.84)	−0.136*** (−22.93)
△NOL	0.501*** (44.48)	0.467*** (5.47)	0.377*** (8.14)	0.633*** (7.24)	0.509*** (42.89)

Constant	0.202*** (4.50)	0.139 (1.26)	−0.0239 (−0.21)	0.0554 (0.45)	0.194*** (4.50)
Firm & industry FE	Yes	Yes	Yes	Yes	Yes

N	190975	6723	13325	10880	159192
R-squared	0.511	0.557	0.565	0.530	0.509
Adj. R-squared	0.436	0.472	0.490	0.421	0.435

Summary statistics for the corporate groups in the YRTTI sample_

Panel B: Corporate groups only	N	Mean	St. dev.	p1	p25	p50	p75	p99
Firm characteristics
CASH ETR	32,036	0.21	0.16	0	0.10	0.22	0.28	0.79
Pre-tax income	32,036	10,498,615	101,811,096	10,760	243,609	793,707	2,976,211	162,794,000
MNE	32,036	0.64	0.48	0	0	1	1	1
Log total assets	32,036	16.1	1.76	12.6	14.7	15.9	17.3	19.6
Fixed assets	32,036	0.33	0.26	0	0.088	0.31	0.53	0.93
ROA	32,036	0.15	0.14	0.00092	0.054	0.11	0.20	0.74
Debt-to-Equity	32,036	86.5	300.8	−290.6	0	8.82	61.6	1932.4
Paid dividends¹	32,036	0.040	0.074	0	0	0.0051	0.049	0.38
Book-tax differences
Special items²	32,036	−0.0023	0.014	−0.074	0	0	0	0.027
R&D expenses²	32,036	0.0020	0.0061	0	0.00000025	0.00010	0.0011	0.029
Intra-group interest payments¹	32,036	0.0026	0.0055	0	0	0	0.0022	0.024
Statutory provisions²	32,036	0.0015	0.0045	0	0	0	0	0.024
Δ Book-tax amortization difference²	32,036	0.00060	0.0055	−0.013	0	0	0	0.031
Δ Book-tax depreciation difference²	32,036	0.00027	0.0014	0	0	0	0	0.0090
Received dividends¹	32,036	0.030	0.067	0	0	0	0.031	0.38
Contributions and subsidies¹	32,036	0.00077	0.0027	0	0	0	0.000084	0.017
NOL¹	32,036	0.029	0.15	0	0	0	0	0.87
ΔNOL¹	32,036	−0.0091	0.034	−0.20	0	0	0	0

UQR results for the YRTTI sample of domestic standalone firms_

	OLS	Unconditional Quantile Regression
	(1) OLS	(2) Q10	(3) Q25	(4) Q50	(5) Q75	(6) Q90
Trend	−0.000578** (−2.31)	0 (.)	−0.00176*** (−3.18)	−0.000543*** (−4.25)	−0.00128*** (−8.05)	−0.000536 (−0.92)
STR	0.673*** (26.87)	0 (.)	0.724*** (12.26)	0.712*** (52.69)	0.399*** (25.89)	0.602*** (10.14)
Controls for firm characteristics
Pre-tax income growth	−94.70*** (−7.14)	0 (.)	−676.0*** (−30.72)	−49.18*** (−11.74)	10.75** (2.08)	324.9*** (13.20)
Log total assets	−0.00443*** (−4.50)	0 (.)	0.00564*** (2.58)	−0.00293*** (−6.07)	−0.00766*** (−13.18)	−0.0239*** (−11.33)
Fixed assets	−0.0378*** (−10.60)	0 (.)	−0.0999*** (−13.20)	−0.0252*** (−14.64)	−0.0130*** (−6.05)	−0.0115 (−1.44)
ROA	−0.0471*** (−12.67)	0 (.)	0.196*** (23.73)	0.0321*** (16.90)	−0.0666*** (−29.63)	−0.404*** (−44.58)
Debt-to-Equity	−0.0000515*** (−28.84)	0 (.)	−0.000118*** (−29.01)	−0.0000168*** (−24.48)	−0.0000150*** (−20.95)	−0.0000413*** (−14.46)
Paid dividends	0.192*** (23.01)	0 (.)	0.217*** (13.53)	0.0785*** (18.33)	0.263*** (38.99)	0.214*** (9.47)
Controls for book-tax differences
Special items	2.143*** (35.39)	0 (.)	4.479*** (32.90)	0.758*** (30.11)	0.678*** (22.58)	2.240*** (16.88)
R&D expenses	−0.117 (−0.85)	0 (.)	−0.448 (−1.37)	−0.0269 (−0.40)	0.265*** (3.81)	0.216 (0.72)
Intra-group interest payments	−1.467*** (−6.53)	0 (.)	−3.310*** (−5.87)	−1.014*** (−9.80)	−0.821*** (−7.22)	−1.120*** (−2.59)
Statutory provisions	0.713*** (2.66)	0 (.)	0.629 (1.11)	0.0801 (0.68)	0.228 (1.56)	1.464** (2.45)
Δ Book-tax amortization diff.	−2.164*** (−15.68)	0 (.)	−5.180*** (−16.75)	−1.044*** (−16.76)	−0.815*** (−11.79)	−2.946*** (−9.90)
Δ Book-tax depreciation diff.	−2.402*** (−4.43)	0 (.)	−6.650*** (−4.94)	−1.652*** (−5.77)	−1.408*** (−3.99)	−0.937 (−0.78)
Received dividends	−0.0396*** (−4.64)	0 (.)	0.0965*** (5.68)	−0.0145*** (−3.07)	−0.282*** (−39.55)	−0.0204 (−0.86)
Contributions and subsidies	3.222*** (19.49)	0 (.)	2.569*** (8.82)	1.351*** (19.07)	2.201*** (22.17)	8.117*** (18.56)
NOL	−0.136*** (−23.02)	0 (.)	−0.231*** (−19.27)	−0.0163*** (−7.78)	−0.0274*** (−11.32)	−0.132*** (−14.11)
△NOL	0.512*** (43.17)	0 (.)	1.595*** (52.62)	0.200*** (35.73)	0.0620*** (10.34)	−0.0997*** (−4.28)

Constant	0.197*** (4.60)	0.0156 (.)	0.0620 (0.42)	0.111*** (7.13)	0.307*** (16.79)	0.527*** (11.27)
Firm & industry FE	Yes	Yes	Yes	Yes	Yes	Yes

N	159192	162102	162102	162102	162102	162102
R-squared	0.507	−	0.576	0.522	0.437	0.346
Adj. R-squared	0.432	−	0.502	0.440	0.340	0.233

Robustness of main results to the exclusion of control variables_

	(1) All firms	(2) Finnish MNEs	(3) Foreign MNEs	(4) Domestic groups	(5) Domestic firms
Trend	−0.00221*** (−9.46)	−0.00579*** (−4.85)	−0.00185* (−1.76)	−0.00352*** (−3.19)	−0.00167*** (−6.68)
STR	0.619*** (23.88)	0.238* (1.76)	0.642*** (6.53)	0.560*** (4.71)	0.649*** (23.09)
Constant	0.0989** (2.51)	0.186*** (2.83)	−0.0106 (−0.18)	0.324*** (7.34)	0.0667* (1.75)
Industry FE	Yes	Yes	Yes	Yes	Yes
N	194138	7004	13557	11475	162102
R-squared	0.0495	0.0917	0.0602	0.0675	0.0480
Adj. R-squared	0.0491	0.0824	0.0551	0.0614	0.0476

UQR results for the YRTTI sample of Finnish multinational enterprises_

	OLS	Unconditional Quantile Regression
	(1) OLS	(2) Q10	(3) Q25	(4) Q50	(5) Q75	(6) Q90
Trend	−0.00780*** (−5.63)	−0.00309*** (−3.33)	−0.0148*** (−6.10)	−0.00598*** (−3.52)	−0.00428*** (−3.06)	−0.00676* (−1.94)
STR	0.267** (1.99)	−0.147 (−1.43)	−0.468* (−1.92)	0.710*** (3.91)	0.713*** (5.07)	0.571* (1.65)
Pre-tax income growth	358.1* (1.82)	−307.3 (−1.49)	−239.3 (−0.68)	67.46 (0.38)	240.9 (1.25)	1399.4** (2.46)
Controls for firm characteristics
Log total assets	0.00328 (0.56)	0.0182*** (4.34)	0.0212** (2.16)	−0.00695 (−1.06)	−0.0116* (−1.96)	0.000128 (0.01)
Fixed assets	−0.0371* (−1.90)	−0.0306* (−1.79)	−0.0906** (−2.23)	−0.0513** (−2.13)	−0.0156 (−0.79)	0.0501 (1.11)
ROA	−0.0560** (−2.23)	0.0961*** (4.81)	0.265*** (5.64)	0.0771** (2.36)	−0.124*** (−5.21)	−0.466*** (−7.48)
Debt-to-Equity	−0.0000216*** (−3.09)	−0.00000479 (−0.60)	−0.0000366** (−2.54)	−0.0000300*** (−3.62)	−0.00000287 (−0.46)	0.00000114 (0.06)
Paid dividends	0.264*** (3.05)	0.0758 (1.51)	0.00208 (0.02)	0.273** (2.50)	0.414*** (4.18)	0.464** (2.18)
Controls for book-tax differences
Special items	0.560*** (4.60)	−0.0740 (−0.88)	0.366 (1.34)	0.580*** (3.51)	0.389*** (3.32)	1.001*** (3.17)
R&D expenses	−0.130 (−0.48)	−0.159 (−0.52)	−0.448 (−0.58)	−0.152 (−0.35)	0.385 (1.29)	−0.467 (−0.78)
Intra-group interest payments	−1.750*** (−2.92)	−0.0808 (−0.16)	−2.415* (−1.90)	−2.864*** (−3.87)	−1.634*** (−2.92)	−1.588 (−1.22)
Statutory provisions	−1.009 (−1.27)	−0.853 (−1.50)	−3.204** (−2.53)	−0.822 (−1.07)	−0.288 (−0.39)	−1.227 (−0.59)
Δ Book-tax amortization diff.	−1.704*** (−5.47)	0.0872 (0.31)	−1.660** (−2.39)	−2.123*** (−4.67)	−1.459*** (−4.17)	−2.609*** (−3.33)
Δ Book-tax depreciation diff.	−2.823*** (−2.79)	−2.568*** (−3.36)	−5.932*** (−3.18)	−3.153** (−2.54)	−1.237 (−1.21)	−2.103 (−0.85)
Received dividends	−0.157* (−1.67)	−0.0434 (−0.85)	0.157 (1.14)	−0.0746 (−0.65)	−0.357*** (−3.29)	−0.412* (−1.71)
Contributions and subsidies	1.077 (1.32)	−0.181 (−0.39)	0.221 (0.19)	2.264*** (2.71)	1.792** (2.50)	2.784 (1.27)
NOL	−0.0917*** (−2.75)	−0.108*** (−3.41)	−0.160** (−2.50)	−0.0683** (−2.02)	−0.0407* (−1.70)	−0.130** (−2.04)
△NOL	0.511*** (6.16)	0.241** (2.41)	0.929*** (5.30)	0.557*** (6.03)	0.306*** (4.85)	0.382** (2.14)

Constant	0.204* (1.78)	−0.200** (−2.35)	−0.00952 (−0.05)	0.255* (1.92)	0.382*** (3.20)	0.331 (1.03)
Firm & industry FE	Yes	Yes	Yes	Yes	Yes	Yes

N	6723	7004	7004	7004	7004	7004
R-squared	0.540	0.547	0.566	0.541	0.476	0.421
Adj. R-squared	0.452	0.438	0.461	0.430	0.349	0.281

Robustness of main results to the exclusion of book-tax differences possibly directly related to tax avoidance_

	(1) All firms	(2) Finnish MNEs	(3) Foreign MNEs	(4) Domestic groups	(5) Domestic firms
Trend	−0.00146*** (−6.22)	−0.00792*** (−5.87)	−0.00117 (−1.21)	−0.00234* (−1.91)	−0.000986*** (−4.02)
STR	0.634*** (27.21)	0.284** (2.18)	0.578*** (6.77)	0.688*** (6.01)	0.659*** (26.33)
Controls for firm characteristics
Pre-tax income growth	−98.22*** (−7.62)	348.9* (1.78)	−161.6*** (−2.73)	372.6** (2.34)	−95.04*** (−7.14)
Log total assets	−0.00464*** (−4.95)	0.00190 (0.33)	−0.00405 (−1.14)	0.00201 (0.34)	−0.00489*** (−4.94)
Fixed assets	−0.0440*** (−13.11)	−0.0407** (−2.09)	−0.0565*** (−3.83)	−0.0887*** (−5.21)	−0.0392*** (−10.95)
ROA	−0.0572*** (−16.28)	−0.0581** (−2.29)	−0.0598*** (−4.23)	−0.144*** (−7.50)	−0.0520*** (−13.92)
Debt-to-Equity	−0.0000470*** (−29.36)	−0.0000221*** (−3.17)	−0.0000118*** (−2.64)	−0.0000304*** (−4.13)	−0.0000515*** (−28.91)
Paid dividends	0.168*** (27.20)	0.182*** (3.06)	0.114*** (7.56)	0.169*** (4.37)	0.174*** (25.63)
Controls for book-tax differences
Special items	1.727*** (33.60)	0.557*** (4.47)	1.316*** (9.79)	0.886*** (4.97)	2.145*** (35.45)
NOL	−0.125*** (−23.76)	−0.0920*** (−2.76)	−0.0859*** (−6.25)	−0.118*** (−2.66)	−0.136*** (−22.97)
△NOL	0.505*** (44.73)	0.512*** (6.38)	0.389*** (8.27)	0.615*** (6.87)	0.512*** (43.09)

Constant	0.250*** (4.23)	0.230** (2.07)	0.0333 (0.26)	0.108 (0.87)	0.238*** (4.11)
Firm & industry FE	Yes	Yes	Yes	Yes	Yes

N	190975	6723	13325	10880	159192
R-squared	0.501	0.535	0.553	0.509	0.502
Adj. R-squared	0.425	0.446	0.476	0.396	0.427

Robustness of main results to inclusion of foreign affiliate control variables_

	(1)	(2)	(3)	(4)	(5)
Trend	−0.00381* (−1.87)	−0.00381* (−1.88)	−0.00380* (−1.87)	−0.00381* (−1.88)	−0.00380* (−1.87)
STR	0.445*** (2.76)	0.445*** (2.76)	0.444*** (2.75)	0.448*** (2.78)	0.448*** (2.77)
Controls for firm characteristics
Pre-tax income growth	386.1 (1.23)	386.1 (1.23)	386.5 (1.23)	385.3 (1.23)	385.5 (1.23)
Log total assets	−0.00800 (−1.16)	−0.00805 (−1.17)	−0.00794 (−1.15)	−0.00782 (−1.13)	−0.00772 (−1.12)
Fixed assets	−0.0669** (−2.54)	−0.0670** (−2.54)	−0.0669** (−2.54)	−0.0671** (−2.54)	−0.0669** (−2.54)
ROA	−0.00892 (−0.33)	−0.00896 (−0.33)	−0.00863 (−0.32)	−0.00919 (−0.34)	−0.00895 (−0.33)
Debt-to-Equity	−0.0000167* (−1.95)	−0.0000167* (−1.95)	−0.0000166* (−1.93)	−0.0000166* (−1.93)	−0.0000165* (−1.93)
Paid dividends	0.896 (1.07)	0.898 (1.08)	0.891 (1.07)	0.890 (1.07)	0.884 (1.06)
Controls for book-tax differences
Special items	0.495*** (3.27)	0.495*** (3.27)	0.496*** (3.27)	0.487*** (3.22)	0.487*** (3.22)
R&D expenses	−0.119 (−0.42)	−0.120 (−0.42)	−0.116 (−0.41)	−0.123 (−0.43)	−0.119 (−0.42)
Intra-group interest payments	−1.446* (−1.84)	−1.447* (−1.85)	−1.457* (−1.86)	−1.525* (−1.94)	−1.528* (−1.94)
Statutory provisions	0.0978 (0.11)	0.107 (0.12)	0.0903 (0.10)	0.106 (0.12)	0.0887 (0.10)
Δ Book-tax amortization diff.	−2.178*** (−6.72)	−2.177*** (−6.72)	−2.177*** (−6.72)	−2.172*** (−6.69)	−2.172*** (−6.70)
Δ Book-tax depreciation diff.	−2.743** (−2.28)	−2.751** (−2.26)	−2.710** (−2.22)	−2.721** (−2.19)	−2.688** (−2.16)
Received dividends	−0.914 (−1.09)	−0.916 (−1.09)	−0.908 (−1.08)	−0.908 (−1.08)	−0.901 (−1.07)
Contributions and subsidies	0.737 (0.77)	0.734 (0.76)	0.742 (0.77)	0.740 (0.77)	0.749 (0.78)
NOL	−0.0836** (−2.24)	−0.0837** (−2.24)	−0.0835** (−2.24)	−0.0835** (−2.24)	−0.0834** (−2.23)
△NOL	0.495*** (5.96)	0.495*** (5.96)	0.495*** (5.96)	0.492*** (5.92)	0.493*** (5.92)
Controls for foreign affiliate activities
Has Tax Haven		0.00157 (0.13)		0.00250 (0.20)
Number of tax haven subsidiaries			−0.00164 (−0.53)		−0.000931 (−0.31)
Sales of subsidiaries				6.10e-12*** (3.43)	5.99e-12*** (3.31)
Employees of subsidiaries				−0.00000359*** (−2.83)	−0.00000351*** (−2.69)

Constant	0.334** (2.28)	0.335** (2.28)	0.333** (2.27)	0.331** (2.26)	0.329** (2.25)
Firm & industry FE	Yes	Yes	Yes	Yes	Yes

N	4165	4165	4165	4165	4165
R-squared	0.576	0.576	0.576	0.576	0.576
Adj. R-squared	0.462	0.462	0.462	0.462	0.462

UQR results for the YRTTI sample of domestic corporate groups_

	OLS	Unconditional Quantile Regression
	(1) OLS	(2) Q10	(3) Q25	(4) Q50	(5) Q75	(6) Q90
Trend	−0.00187 (−1.51)	−0.00661*** (−4.10)	−0.00317 (−1.61)	−0.00112 (−1.01)	−0.00231* (−1.85)	−0.00141 (−0.32)
STR	0.715*** (6.23)	−0.221 (−1.50)	0.689*** (3.49)	1.138*** (10.06)	0.629*** (5.74)	1.059*** (2.64)
Controls for firm characteristics
Pre-tax income growth	365.2** (2.31)	−521.2** (−2.52)	−182.4	(−1.07) 89.78 (0.90)	273.3** (2.20)	1778.4*** (3.54)
Log total assets	0.00321 (0.56)	0.0270*** (3.19)	0.0184* (1.89)	−0.00858 (−1.58)	−0.00939* (−1.82)	−0.0145 (−0.79)
Fixed assets	−0.0882*** (−5.22)	−0.0787*** (−3.45)	−0.123*** (−4.46)	−0.0675*** (−4.40)	−0.0340** (−2.09)	−0.120** (−2.14)
ROA	−0.136*** (−7.09)	0.0743*** (2.80)	0.0912*** (3.07)	−0.0311* (−1.71)	−0.157*** (−8.05)	−0.641*** (−8.92)
Debt-to-Equity	−0.0000294*** (−4.02)	−0.0000386*** (−2.75)	−0.0000456*** (−4.01)	−0.0000160** (−2.50)	−0.0000129** (−2.05)	−0.0000347 (−1.62)
Paid dividends	0.210*** (4.16)	0.110** (2.28)	0.159** (2.44)	0.137*** (3.07)	0.214*** (3.53)	0.391* (1.87)
Controls for book-tax differences
Special items	0.951*** (5.35)	0.489** (2.11)	0.818*** (2.84)	0.681*** (4.11)	0.685*** (4.76)	2.233*** (3.87)
R&D expenses	−0.191 (−0.44)	−1.575** (−2.04)	−0.231 (−0.28)	0.483 (1.26)	0.285 (0.69)	−0.680 (−0.53)
Intra-group interest payments	−3.490*** (−4.32)	−3.215*** (−2.83)	−6.072*** (−4.49)	−2.877*** (−3.86)	−1.502** (−2.26)	−3.002 (−1.27)
Statutory provisions	2.496** (2.20)	1.443 (1.06)	2.751 (1.63)	1.702** (2.06)	1.068 (1.10)	6.893** (2.02)
Δ Book-tax amortization diff.	−1.759*** (−5.28)	−0.367 (−0.69)	−3.175*** (−5.89)	−1.755*** (−6.25)	−1.202*** (−4.66)	−2.236** (−2.27)
Δ Book-tax depreciation diff.	−2.369* (−1.70)	−4.636** (−2.39)	−3.393 (−1.64)	−0.501 (−0.41)	−2.279* (−1.76)	−3.863 (−0.90)
Received dividends	−0.0702 (−1.39)	0.116** (2.38)	0.131* (1.73)	−0.0614 (−1.21)	−0.185*** (−2.92)	−0.218 (−1.11)
Contributions and subsidies	2.060*** (2.82)	1.377* (1.96)	1.646* (1.67)	1.461** (2.37)	1.833** (2.49)	5.313** (2.04)
NOL	−0.124*** (−2.84)	−0.242*** (−2.88)	−0.190*** (−2.94)	−0.0656** (−2.16)	−0.0396 (−1.30)	−0.129 (−1.12)
△NOL	0.615*** (6.92)	0.954*** (5.76)	1.082*** (7.22)	0.331*** (4.01)	0.129 (1.52)	0.645** (2.21)

Constant	0.0875 (0.70)	−0.187 (−1.23)	−0.140 (−0.77)	0.156 (1.50)	0.316*** (2.66)	0.227 (0.44)
Firm & industry FE	Yes	Yes	Yes	Yes	Yes	Yes

N	10880	11475	11475	11475	11475	11475
R-squared	0.515	0.599	0.563	0.550	0.477	0.411
Adj. R-squared	0.403	0.480	0.432	0.415	0.321	0.235

OLS regressions of CASH ETR on trend for different sub-samples_

	(1) All firms	(2) Finnish MNEs	(3) Foreign MNEs	(4) Domestic groups	(5) Domestic firms
Trend	−0.00111*** (−4.65)	−0.00780*** (−5.63)	−0.00162* (−1.66)	−0.00187 (−1.51)	−0.000578** (−2.31)
STR	0.645*** (27.63)	0.267** (1.99)	0.581*** (6.78)	0.715*** (6.23)	0.673*** (26.87)
Controls for firm characteristics
Pre-tax income growth	−97.42*** (−7.60)	358.1* (1.82)	−164.1*** (−2.77)	365.2** (2.31)	−94.70*** (−7.14)
Log total assets	−0.00390*** (−4.19)	0.00328 (0.56)	−0.00251 (−0.70)	0.00321 (0.56)	−0.00443*** (−4.50)
Fixed assets	−0.0412*** (−12.34)	−0.0371* (−1.90)	−0.0365** (−2.51)	−0.0882*** (−5.22)	−0.0378*** (−10.60)
ROA	−0.0523*** (−14.93)	−0.0560** (−2.23)	−0.0565*** (−4.03)	−0.136*** (−7.09)	−0.0471*** (−12.67)
Debt-to-Equity	−0.0000468*** (−29.14)	−0.0000216*** (−3.09)	−0.00000910** (−2.06)	−0.0000294*** (−4.02)	−0.0000515*** (−28.84)
Paid dividends	0.191*** (24.28)	0.264*** (3.05)	0.144*** (6.00)	0.210*** (4.16)	0.192*** (23.01)
Controls for book-tax differences
Special items	1.734*** (33.84)	0.560*** (4.60)	1.337*** (9.75)	0.951*** (5.35)	2.143*** (35.39)
R&D expenses	−0.173 (−1.57)	−0.130 (−0.48)	−0.130 (−0.50)	−0.191 (−0.44)	−0.117 (−0.85)
Intra-group interest payments	−1.938*** (−11.18)	−1.750*** (−2.92)	−2.357*** (−7.76)	−3.490*** (−4.32)	−1.467*** (−6.53)
Statutory provisions	0.602*** (2.64)	−1.009 (−1.27)	0.974** (2.03)	2.496** (2.20)	0.713*** (2.66)
Δ Book-tax amortization diff.	−2.033*** (−17.80)	−1.704*** (−5.47)	−1.574*** (−4.87)	−1.759*** (−5.28)	−2.164*** (−15.68)
Δ Book-tax depreciation diff.	−2.915*** (−6.79)	−2.823*** (−2.79)	−3.914*** (−3.23)	−2.369* (−1.70)	−2.402*** (−4.43)
Received dividends	−0.0482*** (−6.03)	−0.157* (−1.67)	−0.0527** (−2.18)	−0.0702 (−1.39)	−0.0396*** (−4.64)
Contributions and subsidies	3.048*** (19.33)	1.077 (1.32)	2.469** (2.25)	2.060*** (2.82)	3.222*** (19.49)
NOL	−0.126*** (−23.82)	−0.0917*** (−2.75)	−0.0824*** (−6.10)	−0.124*** (−2.84)	−0.136*** (−23.02)
ΔNOL	0.503*** (44.70)	0.511*** (6.16)	0.371*** (7.97)	0.615*** (6.92)	0.512***(43.17)

Constant	0.208*** (4.64)	0.204* (1.78)	0.00344 (0.03)	0.0875 (0.70)	0.197*** (4.60)
Firm & industry FE	Yes	Yes	Yes	Yes	Yes

N	190975	6723	13325	10880	159192
R-squared	0.506	0.540	0.560	0.515	0.507
Adj. R-squared	0.431	0.452	0.484	0.403	0.432

Summary statistics for the baseline YRTTI analysis sample_

*Panel A: Entire sample*	N	Mean	St. dev.	p1	p25	p50	p75	p99
Firm characteristics
CASH ETR	194,138	0.23	0.14	0	0.16	0.25	0.29	0.74
Pre-tax income	194,138	2,067,682	41,726,102	2,662	64,586	168,194	433,479	23,040,336
MNE	194,138	0.11	0.31	0	0	0	0	1
Log total assets	194,138	14.3	1.50	11.4	13.3	14.0	15.0	19.2
Fixed assets	194,138	0.31	0.26	0	0.082	0.25	0.50	0.93
Return on assets (ROA)	194,138	0.17	0.15	0.0027	0.061	0.13	0.23	0.71
Debt-to-Equity	194,138	96.4	307.6	−256.8	0	10.2	69.8	1987.9
Paid dividends¹	194,138	0.045	0.069	0	0	0.025	0.062	0.38
Book-tax differences
Special items²	194,138	−0.0011	0.011	−0.070	0	0	0	0.020
R&D expenses²	194,138	0.0010	0.0041	0	0	0.000025	0.00043	0.017
Intra-group interest payments¹	194,138	0.00073	0.0033	0	0	0	0	0.020
Statutory provisions²	194,138	0.00050	0.0028	0	0	0	0	0.020
Δ Book-tax amortization difference²	194,138	0.00030	0.0038	−0.0086	0	0	0	0.021
Δ Book-tax depreciation difference²	194,138	0.000090	0.00079	0	0	0	0	0.0041
Received dividends¹	194,138	0.028	0.058	0	0	0	0.038	0.34
Contributions and subsidies¹	194,138	0.00081	0.0030	0	0	0	0	0.017
NOL¹	194,138	0.027	0.14	0	0	0	0	0.78
ΔNOL¹	194,138	−0.012	0.040	−0.23	0	0	0	0

Robustness of the main results to inclusion of interaction terms_

	Finnish MNEs		Foreign MNEs		Domestic groups		Domestic firms
	(1)	(2)	(3)	(4)	(5)	(6)	(7)	(8)
Trend	−0.0100*** (−6.25)	−0.00768*** (−5.38)	−0.00130 (−0.86)	−0.00237** (−2.32)	−0.00287* (−1.83)	−0.00208 (−1.62)	−0.0000492 (−0.17)	−0.000879*** (−3.42)
Post GFC	−0.0744 (−1.63)		−0.0715** (−2.27)		−0.0867** (−2.25)		0.0499*** (5.78)
I(2009-2010)		−0.276** (−2.22)		0.0904 (1.20)		−0.0314 (−0.29)		−0.0164 (−0.71)
I(2013-2015)		−0.0980 (−0.99)		0.0995 (1.56)		−0.0677 (−0.81)		0.0972*** (4.94)
Trendx Post GFC	0.00512** (2.00)		0.00375** (2.02)		0.00517** (2.39)		−0.00308*** (−6.40)
Trendx I(2009-2010)		0.0158** (2.09)		−0.00603 (−1.32)		0.00174 (0.27)		0.000963 (0.69)
Trendx I(2013-2015)		0.00522 (1.07)		−0.00468 (−1.47)		0.00398 (0.97)		−0.00514*** (−5.30)
STR	0.394** (2.40)	0.515*** (2.90)	0.777*** (7.47)	0.552*** (4.73)	0.892*** (6.43)	0.928*** (6.45)	0.550*** (17.25)	0.480*** (13.68)
Constant	0.183 (1.55)	0.141 (1.17)	−0.0502 (−0.43)	0.0384 (0.32)	0.0396 (0.31)	0.0243 (0.19)	0.232*** (5.42)	0.258*** (5.95)
Firm characteristic controls	Yes	Yes	Yes	Yes	Yes	Yes	Yes	Yes
Book-tax difference controls	Yes	Yes	Yes	Yes	Yes	Yes	Yes	Yes
Firm & industry FE	Yes	Yes	Yes	Yes	Yes	Yes	Yes	Yes

N	6723	6723	13325	13325	10880	10880	159192	159192
R-squared	0.542	0.542	0.561	0.561	0.516	0.516	0.507	0.507
Adj. R-squared	0.453	0.454	0.484	0.485	0.404	0.404	0.433	0.433

Robustness of the main results to inclusion of interaction terms (entire regression output)_

	Finnish MNEs		Foreign MNEs		Domestic groups		Domestic firms

	(1)	(2)	(3)	(4)	(5)	(6)	(7)	(8)
Trend	−0.0100*** (−6.25)	−0.00768*** (−5.38)	−0.00130 (−0.86)	−0.00237** (−2.32)	−0.00287* (−1.83)	−0.00208 (−1.62)	−0.0000492 (−0.17)	−0.000879*** (−3.42)
Post GFC	−0.0744 (−1.63)		−0.0715** (−2.27)		−0.0867** (−2.25)		0.0499*** (5.78)
I(2009-2010)		−0.276** (−2.22)		0.0904 (1.20)		−0.0314 (−0.29)		−0.0164 (−0.71)
I(2013-2015)		−0.0980 (−0.99)		0.0995 (1.56)		−0.0677 (−0.81)		0.0972***(4.94)
Trend Post GFC	0.00512** (2.00)		0.00375** (2.02)		0.00517** (2.39)		−0.00308*** (−6.40)
Trend I(2009-2010)		0.0158** (2.09)		−0.00603 (−1.32)		0.00174 (0.27)		0.000963 (0.69)
Trend I(2013-2015)		0.00522 (1.07)		−0.00468 (−1.47)		0.00398 (0.97)		−0.00514*** (−5.30)
STR	0.394** (2.40)	0.515*** (2.90)	0.777*** (7.47)	0.552*** (4.73)	0.892*** (6.43)	0.928*** (6.45)	0.550*** (17.25)	0.480*** (13.68)
Controls for firm characteristics
Pre-tax income growth	357.5* (1.81)	355.5* (1.80)	−162.5*** (−2.75)	−164.5*** (−2.78)	364.7** (2.30)	364.1** (2.30)	−95.36*** (−7.20)	−94.88*** (−7.16)
Log total assets	0.00414 (0.70)	0.00354 (0.60)	−0.00232 (−0.65)	−0.00241 (−0.68)	0.00409 (0.71)	0.00390 (0.68)	−0.00474*** (−4.81)	−0.00467*** (−4.74)
Fixed assets	−0.0408** (−2.09)	−0.0368* (−1.88)	−0.0373** (−2.57)	−0.0367** (−2.53)	−0.0894*** (−5.28)	−0.0894*** (−5.28)	−0.0377*** (−10.58)	−0.0376*** (−10.54)
ROA	−0.0534** (−2.13)	−0.0582** (−2.32)	−0.0564*** (−4.02)	−0.0576*** (−4.11)	−0.136*** (−7.06)	−0.136*** (−7.08)	−0.0485*** (−13.02)	−0.0481*** (−12.91)
Debt-to-Equity	−0.0000218*** (−3.08)	−0.0000218*** (−3.10)	−0.00000899** (−2.04)	−0.00000880** (−2.00)	−0.0000295*** (−4.05)	−0.0000297*** (−4.07)	−0.0000516*** (−28.92)	−0.0000515*** (−28.87)
Paid dividends	0.217** (2.45)	0.235*** (2.69)	0.136*** (5.41)	0.139*** (5.66)	0.192*** (3.79)	0.197*** (3.89)	0.205*** (23.70)	0.202*** (23.57)
Controls for book-tax differences
Special items	0.556*** (4.55)	0.559*** (4.59)	1.340*** (9.79)	1.336*** (9.80)	0.951*** (5.36)	0.950*** (5.35)	2.145*** (35.43)	2.143*** (35.39)
R&D expenses	−0.218 (−0.79)	−0.161 (−0.59)	−0.139 (−0.54)	−0.118 (−0.46)	−0.277 (−0.64)	−0.269 (−0.62)	−0.0630 (−0.45)	−0.0699 (−0.50)
Intra-group interest payments	−1.657*** (−2.74)	−1.777*** (−2.95)	−2.378*** (−7.82)	−2.393*** (−7.91)	−3.512*** (−4.35)	−3.510*** (−4.35)	−1.456*** (−6.47)	−1.460*** (−6.49)
Statutory provisions	−0.976 (−1.23)	−0.909 (−1.15)	0.972** (2.03)	1.008** (2.10)	2.479** (2.20)	2.494** (2.20)	0.727*** (2.72)	0.732*** (2.74)
Δ Book-tax amortization diff.	−1.688*** (−5.42)	−1.698*** (−5.48)	−1.567*** (−4.85)	−1.562*** (−4.84)	−1.720*** (−5.13)	−1.738*** (−5.18)	−2.183*** (−15.85)	−2.177*** (−15.79)
Δ Book-tax depreciation diff.	−3.218*** (−3.18)	−3.171*** (−3.12)	−4.053*** (−3.35)	−4.022*** (−3.31)	−2.641* (−1.89)	−2.592* (−1.85)	−2.229*** (−4.11)	−2.270*** (−4.19)
Received dividends	−0.0980 (−1.02)	−0.119 (−1.25)	−0.0442* (−1.71)	−0.0471* (−1.89)	−0.0387 (−0.75)	−0.0449 (−0.88)	−0.0606*** (−6.66)	−0.0548*** (−6.13)
Contributions and subsidies	1.100 (1.36)	1.118 (1.38)	2.538** (2.32)	2.556** (2.34)	2.074*** (2.83)	2.063*** (2.82)	3.224*** (19.56)	3.222*** (19.53)
NOL	−0.0928*** (−2.80)	−0.0926*** (−2.79)	−0.0822*** (−6.09)	−0.0814*** (−6.04)	−0.123*** (−2.85)	−0.123*** (−2.84)	−0.136*** (−22.94)	−0.136*** (−22.94)
Δ N O L	0.506*** (6.13)	0.501*** (6.05)	0.368*** (7.89)	0.369*** (7.93)	0.610*** (6.88)	0.611*** (6.87)	0.512*** (43.20)	0.512*** (43.22)

Constant	0.183 (1.55)	0.141 (1.17)	−0.0502 (−0.43)	0.0384 (0.32)	0.0396 (0.31)	0.0243 (0.19)	0.232*** (5.42)	0.258*** (5.95)
Firm & industry FE	Yes	Yes	Yes	Yes	Yes	Yes	Yes	Yes

N	6723	6723	13325	13325	10880	10880	159192	159192
R-squared	0.542	0.542	0.561	0.561	0.516	0.516	0.507	0.507
Adj. R-squared	0.453	0.454	0.484	0.485	0.404	0.404	0.433	0.433

OLS regressions of CASH ETR on trend for different sub-samples and with sample restricted to years 2007–2015_

	(1) All firms	(2) Finnish MNEs	(3) Foreign MNEs	(4) Domestic groups	(5) Domestic non-groups
Trend	−0.00163*** (−4.89)	−0.00381* (−1.87)	−0.000377 (−0.32)	−0.000849 (−0.53)	−0.00159*** (−4.43)
STR	0.616*** (22.27)	0.445*** (2.76)	0.644*** (6.70)	0.654*** (4.88)	0.632*** (21.23)
Controls for firm characteristics
Pre-tax income growth	−46.01*** (−2.69)	386.1 (1.23)	−55.12 (−0.78)	517.3*** (2.91)	−49.33*** (−2.77)
Log total assets	−0.00710*** (−5.42)	−0.00800 (−1.16)	−0.00704* (−1.68)	0.00162 (0.19)	−0.00674*** (−4.72)
Fixed assets	−0.0441*** (−9.89)	−0.0669** (−2.54)	−0.0308* (−1.93)	−0.0916*** (−4.23)	−0.0414*** (−8.54)
ROA	−0.0301*** (−6.92)	−0.00892 (−0.33)	−0.0393** (−2.52)	−0.107*** (−4.73)	−0.0259*** (−5.55)
Debt-to-Equity	−0.0000333*** (−17.79)	−0.0000167* (−1.95)	−0.00000831* (−1.78)	−0.0000350*** (−4.03)	−0.0000370*** (−17.35)
Paid dividends	0.0558 (0.51)	0.896 (1.07)	0.0327 (1.28)	−0.144 (−0.14)	0.0701 (0.56)
Controls for book-tax differences
Special items	1.676*** (25.49)	0.495*** (3.27)	1.343*** (9.26)	0.868*** (4.62)	2.138*** (25.39)
R&D expenses	−0.0529 (−0.48)	−0.119 (−0.42)	−0.0317 (−0.13)	−0.178 (−0.41)	−0.0126 (−0.09)
Intra-group interest payments	−1.918*** (−8.96)	−1.446* (−1.84)	−2.178*** (−6.62)	−3.308*** (−3.23)	−1.430*** (−4.33)
Statutory provisions	0.464 (1.51)	0.0978 (0.11)	0.475 (0.87)	1.009 (0.59)	0.569 (1.40)
Δ Book-tax amortization diff.	−2.242*** (−17.73)	−2.178*** (−6.72)	−1.391*** (−3.93)	−2.075*** (−5.51)	−2.455*** (−15.69)
Δ Book-tax depreciation diff.	−1.510*** (−2.59)	−2.743** (−2.28)	−2.784** (−2.11)	−1.008 (−0.54)	−0.416 (−0.49)
Received dividends	0.0325 (0.30)	−0.914 (−1.09)	0.0464 (1.44)	0.242 (0.24)	0.0221 (0.18)
Contributions and subsidies	4.764*** (19.46)	0.737 (0.77)	2.191 (1.59)	2.299*** (2.62)	5.205*** (19.70)
NOL	−0.118*** (−18.52)	−0.0836** (−2.24)	−0.0796*** (−5.11)	−0.0938** (−2.25)	−0.129*** (−17.76)
△NOL	0.465*** (34.45)	0.495*** (5.96)	0.385*** (7.40)	0.669*** (5.78)	0.468*** (32.85)

Constant	0.184*** (6.61)	0.334** (2.28)	0.107 (1.02)	0.250 (1.58)	0.228*** (6.73)
Firm & industry FE	Yes	Yes	Yes	Yes	Yes

N	109311	4165	9910	6383	88347
R-squared	0.567	0.576	0.598	0.558	0.569
Adj. R-squared	0.472	0.462	0.509	0.423	0.474

OLS regressions of CASH ETR on trend with sample restrictions on loss histories_

	All firms				Corporate groups only
	(1) Balanced	(2) Bal., never losses	(3) Never losses	(4) Never NOL	(5) Balanced	(6) Bal., never losses	(7) Never losses	(8) Never NOL
Trend	−0.000901** (−2.47)	0.000601 (1.19)	0.000837*** (2.87)	0.000852*** (2.79)	−0.00370***(−3.96)	−0.00578*** (−3.47)	−0.00290*** (−3.67)	−0.00307*** (−3.75)
STR	0.692*** (18.60)	0.849*** (18.79)	0.841*** (31.11)	0.859*** (30.82)	0.488*** (5.48)	0.371** (2.24)	0.633*** (8.83)	0.629*** (8.69)
Controls for firm characteristics
Pre-tax income growth	−134.6*** (−5.60)	49.11 (0.71)	28.38 (1.06)	30.84 (1.08)	−121.5 (−1.45)	11899.4 (1.62)	274.4** (2.39)	270.6** (2.35)
Log total assets	−0.00189 (−1.06)	−0.00650** (−2.29)	−0.00927*** (−7.27)	−0.00841*** (−6.32)	0.00384 (0.92)	0.00484 (0.38)	−0.00346 (−1.01)	−0.00310 (−0.88)
Fixed assets	−0.0321*** (−5.49)	−0.0234*** (−3.15)	−0.0347*** (−8.21)	−0.0307*** (−7.13)	−0.0736*** (−4.84)	−0.0827*** (−3.51)	−0.0583*** (−4.89)	−0.0590*** (−4.82)
ROA	−0.0685*** (−10.80)	−0.0852*** (−8.94)	−0.0943*** (−20.76)	−0.0909*** (−19.31)	−0.105*** (−5.92)	−0.0578* (−1.75)	−0.105*** (−8.33)	−0.101*** (−7.94)
Debt-to-Equity	−0.0000579*** (−17.06)	−0.0000649*** (−5.50)	−0.0000527*** (−18.43)	−0.0000507*** (−16.74)	−0.0000269*** (−3.20)	−0.0000119 (−1.00)	−0.0000228*** (−4.59)	−0.0000228*** (−4.37)
Paid dividends	0.204*** (16.61)	0.117*** (7.28)	0.140*** (15.37)	0.133*** (14.23)	0.163*** (5.83)	0.354*** (4.03)	0.141*** (5.87)	0.141*** (5.77)
Controls for book-tax differences
Special items	1.836*** (21.23)	1.230*** (7.91)	1.798*** (25.62)	1.750*** (23.66)	0.883*** (6.54)	0.538*** (3.55)	1.015*** (10.03)	0.947*** (9.51)
R&D expenses	−0.0613 (−0.32)	−0.473** (−2.51)	−0.404*** (−3.20)	−0.363*** (−2.79)	0.141 (0.49)	−0.248 (−0.54)	−0.279 (−1.27)	−0.259 (−1.16)
Intra-group interest payments	−1.990*** (−6.75)	−1.902*** (−3.50)	−1.912*** (−8.03)	−2.035***(−8.22)	−2.555*** (−6.20)	−2.408*** (−3.66)	−2.679*** (−8.01)	−2.828*** (−8.76)
Statutory provisions	0.682* (1.86)	0.0912 (0.16)	0.521* (1.71)	0.675** (2.08)	0.706 (1.09)	−0.480 (−0.65)	0.505 (1.06)	0.750 (1.55)
Δ Book-tax amortization diff.	−2.224*** (−13.44)	−2.151*** (−7.47)	−2.157*** (−15.05)	−2.155*** (−14.57)	−1.904*** (−6.76)	−1.393*** (−4.10)	−1.719*** (−7.56)	−1.713*** (−7.82)
Δ Book-tax depreciation diff.	−2.716*** (−3.99)	−2.165*** (−2.61)	−2.520*** (−4.62)	−2.610*** (−4.63)	−4.358*** (−3.90)	−0.710 (−0.60)	−2.441*** (−2.89)	−2.259*** (−2.59)
Received dividends	−0.0425*** (−3.39)	−0.0408*** (−2.98)	−0.0525*** (−6.04)	−0.0524*** (−5.86)	−0.0566* (−1.92)	−0.315*** (−3.41)	−0.0637*** (−2.72)	−0.0683*** (−2.87)
Contributions and subsidies	2.977*** (11.57)	2.122*** (5.32)	2.745*** (13.95)	2.645*** (12.95)	2.600*** (3.59)	2.181 (0.79)	2.253*** (3.51)	2.427*** (3.71)
NOL	−0.117*** (−11.74)	−0.131 (−1.10)	−0.0380 (−1.00)		−0.0923*** (−3.97)	−4.844 (−1.27)	0.0816 (1.07)
ΔNOL	0.601*** (27.90)	0.585*** (3.13)	−0.0816*** (−4.00)		0.564*** (9.65)	−1.549* (−1.73)	−0.295** (−2.41)

Constant	0.129*** (4.72)	0.153*** (3.80)	0.255*** (6.34)	0.172*** (8.09)	0.0290 (0.30)	0.0925 (0.41)	0.206** (2.09)	0.202** (2.03)
Firm & industry FE	Yes	Yes	Yes	Yes	Yes	Yes	Yes	Yes

N	74031	21600	95338	86240	12844	2526	17724	17024
R-squared	0.495	0.439	0.530	0.532	0.535	0.556	0.544	0.547
Adj. R-squared	0.433	0.399	0.455	0.457	0.452	0.511	0.465	0.469

References

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Articles in this issue

DOI: https://doi.org/10.2478/ntaxj-2025-0002 | Journal eISSN: 2246-1809

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Language: English

Submitted on: Jun 9, 2025

Accepted on: Oct 30, 2025

Published on: May 28, 2026

Published by: DJØF Publishing, Nordic Tax Research Council

In partnership with: Paradigm Publishing Services

Publication frequency: 1 issue per year

Keywords:

effective tax rate,

tax avoidance,

corporate taxation

Related subjects:

Business and economics,

Business management,

Business law,

Political economics,

Public finance and fiscal theory,

Law,

History, philosophy and sociology of law,

Public law,

Tax and accounting law

© 2026 Mikko Vanhala, Marika Viertola, published by DJØF Publishing, Nordic Tax Research Council
This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 License.

AHEAD OF PRINT

Heterogeneity in Effective Tax Rate Trends: Evidence from Finnish Corporate Tax Returns

Figures & Tables

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Figure 7:

Figure A1:

UQR results for the YRTTI sample of foreign multinational enterprises_

Robustness of main results to the definition of received dividends_

Summary statistics for the corporate groups in the YRTTI sample_

UQR results for the YRTTI sample of domestic standalone firms_

Robustness of main results to the exclusion of control variables_

UQR results for the YRTTI sample of Finnish multinational enterprises_

Robustness of main results to the exclusion of book-tax differences possibly directly related to tax avoidance_

Robustness of main results to inclusion of foreign affiliate control variables_

UQR results for the YRTTI sample of domestic corporate groups_

OLS regressions of CASH ETR on trend for different sub-samples_

Summary statistics for the baseline YRTTI analysis sample_

Robustness of the main results to inclusion of interaction terms_

Robustness of the main results to inclusion of interaction terms (entire regression output)_

OLS regressions of CASH ETR on trend for different sub-samples and with sample restricted to years 2007–2015_

OLS regressions of CASH ETR on trend with sample restrictions on loss histories_

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