nep-acc New Economics Papers
on Accounting and Auditing
Issue of 2007‒03‒03
five papers chosen by
Alexander Harin
Modern University for the Humanities

  1. Adoption of International Financial Reporting Standards Prudential Approach 2. Tier 1 Capital and Securitisation By Australian Prudential Regulation Authority
  2. Taxing Financial Arrangements: Harmonising Tax and Accounting? By Rodney Fisher
  3. Tax-Induced Trading and the Identity of the Marginal Investor: Evidence from Sweden By Daunfeldt, Sven-Olov
  4. Do High Taxes Lock-in Capital Gains? Evidence from a Flat Rate Tax System By Daunfeldt, Sven-Olov; Praski-Ståhlgren, Ulrika; Rudholm, Niklas
  5. Contracting out: Dutch municipalities reject the solution for the VAT-distortion By Wassenaar, M.C.; Dijkgraaf, E.; Gradus, R.H.J.M.

  1. By: Australian Prudential Regulation Authority (Australian Prudential Regulation Authority)
    Date: 2005–08–31
  2. By: Rodney Fisher
    Abstract: This paper comments critically on the proposed provisions governing the Taxation of Financial Arrangements (TOFA). It describes the tortuous consultation process and the somewhat piecemeal introduction of aspects of the taxation of financial arrangements legislation that have come in. It critiques the approach taken in the Exposure Draft and identifies a number of anomalies. The article regrets that the revenue authorities have been reluctant to link tax outcomes more directly to accounting outcomes in relation to taxing financial arrangements. The article notes the breadth of impact on a range of taxpayers that the Exposure Draft will have. The article accepts that some of the provisions appear to be moving in the right direction, but notes that there is still a need for modification and fine tuning before the legislation can be fairly regarded as final.
    Keywords: TOFA, Tax, financial arrangements, accounting
    Date: 2007–02–26
  3. By: Daunfeldt, Sven-Olov (The Swedish Retail Institute (HUI))
    Abstract: Changes in the Swedish tax code during the 1990s were structured in a way that offers an opportunity to test whether ex-dividend prices were determined by the taxation of domestic individual investors. The results presented in this paper indicate that ex-dividend prices were not influenced by the relatively large tax changes for domestic individual investors. In addition, there was no evidence that the taxation of domestic individual investors influenced ex-dividend prices for any specific dividend yield group.
    Keywords: Taxation; trading; ex-dividend prices
    JEL: G11 G18
    Date: 2005–12–05
  4. By: Daunfeldt, Sven-Olov (The Swedish Retail Institute (HUI)); Praski-Ståhlgren, Ulrika (The Department of Economics); Rudholm, Niklas (The Swedish Retail Institute (HUI))
    Abstract: The purpose of this paper is to study, using a comprehensive Swedish panel data set, whether investors are less willing to realize capital gains when the marginal tax rate on capital gains is relatively high. In Sweden capital gains are taxed independently of ordinary income at a flat rate, making it possible to avoid endogenity problems and to include direct measures of capital gains taxation in the empirical analysis. The results indicate that a 10% increase in capital gains tax rate reduces the number of realizations of capital gains with 8.7% and the realized amount, given the decision to realize, with 1.9%. In addition, wealthy individuals seem to respond more to changes in capital gains tax rates than less-wealthy individuals.
    Keywords: Capital gains realizations; tax avoidance; panel data
    JEL: H24 H31
    Date: 2007–01–31
  5. By: Wassenaar, M.C. (Vrije Universiteit Amsterdam, Faculteit der Economische Wetenschappen en Econometrie (Free University Amsterdam, Faculty of Economics Sciences, Business Administration and Economitrics); Dijkgraaf, E.; Gradus, R.H.J.M.
    Abstract: In 2003, the Dutch government introduced a VAT-compensation fund in order to create a level-playing field for local governments with respect to Value Added Tax (VAT). By introducing this fund the tax difference between governments that supply services themselves and governments that contract out to the private sector was eliminated. This paper shows, however, that according to most of the municipalities differences in VAT treatment did not hinder the contracting out of public services. Therefore, the fund lacks a great deal of its legitimacy. More important, the fund is not effective, as the number of contracted public services has hardly increased since the introduction. In general, municipalities have a negative opinion about this fund. They state that more than the budgetary effects, other arguments are relevant in the decision-making on the outsourcing of activities such as the quality of services and the employment in the own municipality. As the budgetary position for a number of municipalities will decline in the near future, the fund still may stimulate the outsourcing of public services in future.
    Keywords: VAT; Contracting out; Municipalities; Compensation fund
    JEL: H25 H32 L33
    Date: 2007

This nep-acc issue is ©2007 by Alexander Harin. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.