The Tax Complexity Index – A Survey-Based Country Measure of Tax Code and Framework Complexity

Caren Sureth-Sloane, Thomas Hoppe, Deborah Schanz, Susann Sturm

Publication: Working/Discussion PaperWU Working Paper

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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 languageEnglish
Publication statusPublished - 2020

Publication series

SeriesWU International Taxation Research Paper Series

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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