Search

Objective: To examine the behavior of the effective tax burden on the profits of Brazilian banks, comparing Effective Tax Rate [ETR] proxies in the short and long terms. Tax aggressiveness is considered the ability to present/maintain ETR below the nominal rate, regardless of whether it complies with the legislation. Method: Analyses were performed using an illustrative example and descriptive statistics of four variations of the ETR--Gaap, Adjusted Gaap, Current, and Adjusted Current--over one, five, and ten years. Results: Tests with data from 2000 to 2022 show that the ETR ranges between 26% and 48%, on average, depending on the proxy and measurement period. The results suggest that banks adopt tax-planning strategies and can defer tax payments in the long term. Gaap measures proved suitable for analyzing tax aggressiveness, as the effects of temporal differences do not influence them. Contributions: This study contributes to the literature on tax aggressiveness, especially in the banking sector, suggesting proxies adapted to the Brazilian context to capture the banks' ability to avoid taxes. It also supports recurring discussions, including in political terms, about the level of tax burden on the banking industry. [ABSTRACT FROM AUTHOR]