bunching evidence from Hungary

APPENDIX
Figure 17
All firms, and firms reporng tax base decreasing item of “investment subsidy for small and medium size enterprises”
(Notes: The figure presents the empirical frequency of firms based on their profit rate for fiscal year 2007. The counterfactual is the last fiscal year
before the introducon of the minimum tax scheme (2006). The bin width is 0.0016. The 2 percent profit threshold is marked by a vercal dashed
line; the 0 profit rate is marked by a vercal solid line. The solid line represents all firms in the profit rate range on the horizontal axis, while the
doed line represents firms with reporng tax base increasing item of “investment subsidy for small and medium size enterprises”.)
Number of companies
0 2000 4000
-.02 0 .02 .04 .06 .08 .1
Profit ratio
Pre-reform (2006) After reform (2007)
Figure 18
All firms, and firms reporng tax base decreasing item of “reserves for the purpose of future developments”
(Notes: The figure presents the empirical frequency of firms based on their profit rate for fiscal year 2007. The counterfactual is the last fiscal year
before the introducon of the minimum tax scheme (2006). The bin width is 0.0016. The 2 percent profit threshold is marked by a vercal dashed
line; the 0 profit rate is marked by a vercal solid line. The solid line represents all firms in the profit rate range on the horizontal axis, while the
doed line represents firms with reporng tax base increasing item of “reserves for the purpose of future developments”.)
Number of companies
0 2000 4000
-.02 0 .02 .04 .06 .08 .1
Profit ratio
Pre-reform (2006) After reform (2007)
MNB WORKING PAPERS 3 • 2016 33