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13 Austl. Tax F. 507 (1997)
The Gap between Accounting Profit and Taxable Income

handle is hein.journals/austraxrum13 and id is 513 raw text is: The Gap between
Accounting Profit and
Taxable Income
Alfred V. Tran*
This paper reports a statistical analysis of the effective tax rates
(ETRs) of more than 500 listed Australian companies to mea-
sure thegap between accounting profit and taxable income caused
by permanent differences. The results show that companies in
three industry groupings benefited substantially from concession-
al tax treatments ofgold-mining income, dividends and capital
gains, and had accounting profit consistently higher than taxable
income. After controlling for industry effect, the analyses also
identify a size effect: large firms had a wider book-tax income
gap than smallfirms.
* Department of Commerce, The Australian National University.
I have benefited fron the suggestions and comments of Allan Barton, Tin
Brailsford, Russell Craig, Ross Cunningham, Peter Jubb, Thomas Porcano, and Ian
Wallschutzky. The financial support of the Faculties Research Fund of The Austra-
lian National University is gratefully acknowledged.

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