Depending on the extent of these subsidies and other taxes, the statutory corporate tax rate may differ substantially from the effective corporate tax rate because the latter is adjusted to include tax-related incentives such as investment tax credits, tax breaks, and accelerated depreciation.

Question

Quizplus · Accepted Answer

This statement is true as subsidies and other tax incentives can reduce the effective tax rate and this should be taken into consideration while comparing the statutory and effective tax rates.

Depending on the Extent of These Subsidies and Other Taxes