The formula to calculate Effective Corporate Tax Rate is:
\[ \text{Effective Corporate Tax Rate} = \frac{\text{Income Tax Paid}}{\text{Earnings Before Tax (EBT)}} \times 100 \]
The Effective Corporate Tax Rate (ETR) is a measure of the tax rate that a company effectively pays on its earnings. This metric helps in understanding the actual tax burden on a company as opposed to the statutory tax rate.
Let's assume the following:
To calculate the Effective Corporate Tax Rate:
\[ \text{Effective Corporate Tax Rate} = \frac{275,000}{1,500,000} \times 100 = 18.33\% \]
Therefore, the Effective Corporate Tax Rate is 18.33%.