Previous research on the determinants of effective corporate tax rates (ETRs) dominantly studied annual ETRs. On the other hand, in this paper we examined the impact of firm characteristics on long-run ETRs (LRETRs) of agricultural companies in the transition economy of Serbia, where statutory corporate tax rate is set at 15%. Research showed that the LRETR of the average Serbian agricultural company is well below the statutory rate. Regression analysis showed that larger agricultural companies have significantly lower LRETRs, consistent with the political power hypothesis. Capital intensity negatively influences LRETRs, while leverage and profitability do not appear to significantly impact them. Using quantile regression, it is shown that the impact of firm characteristics on LRETR is different on different parts of its distribution. Research results are robust to important changes in the research sample. We have also proposed changes in investment tax incentives rules to ensure fairer corporate tax treatment of larger and smaller agricultural companies. We argue that making investment tax incentives accessible to smaller companies would mitigate the political power hypothesis.