nep-acc New Economics Papers
on Accounting and Auditing
Issue of 2011‒05‒07
seven papers chosen by
Alexander Harin
Modern University for the Humanities

  1. Taxes and the valuation of dividends: a study of dividend announcements in Germany By Haesner, Christian; Schanz, Deborah
  2. The Norwegian Shareholder Tax Reconsidered By Södersten, Jan; Lindhe, Tobias
  3. Zinsschranke, Unternehmensbewertung und APV Ansatz - eine Anmerkung zum Beitrag von Förster/Stöckl/Brenken (ZfB 2009, S. 985 ff.) By Arnold, Sven; Lahmann, Alexander; Schwetzler, Bernd
  4. Multilevel Fiscal Governance in a Balanced Policy Environment By Sharma, Chanchal Kumar
  5. Is a defaulting mortgage really worthless? By Dr. Ken, Rich
  6. Financial Crises and Bilateral Foreign Direct Investment Flows By Abdelaal Mahmoud, Ashraf
  7. Climate Policy, Carbon Leakage and Competitiveness: How Might Border Tax Adjustments Help? By Sheldon, Ian; McCorriston, Steve

  1. By: Haesner, Christian; Schanz, Deborah
    Abstract: This paper investigates the impact of the 2001 tax reform in Germany on dividend announcement returns. With this major tax reform, the full imputation system was replaced by the half-income system, which had a significant impact on the relative taxation of dividends and capital gains for most investor classes. In an event study framework, we separate the tax effect of dividends from their positive signaling and agency cost effects to offer a more comprehensive picture of the valuation implications of dividends in Germany. Controlling for signaling and agency cost effects of dividends we find that the market response to positive dividend surprises is more pronounced under the full imputation system, where dividends are generally more favorable to investors from a tax perspective, than under the half-income system. Our results suggest that the observed decline in the dividend response coefficient is synchronized with the 2001 tax reform and hence attributable to the 2001 tax reform. --
    Keywords: Dividend Announcements,Taxation
    JEL: G35 G14 H3 G34
    Date: 2011
  2. By: Södersten, Jan (Department of Economics); Lindhe, Tobias (Uppsala Center for Fiscal Studies)
    Abstract: In an article in International Tax and Public Finance, Peter Birch Sørensen (2005) gives an in-depth account of the new Norwegian Shareholder Tax, which allows the shareholders a deduction for an imputed risk-free rate of return. Sørensen’s positive evaluation appears as reasonable for a closed economy where the deduction for the imputed return is capitalized into the market prices of corporate shares. We show that in a small open economy where no capitalization occurs, the Norwegian shareholder tax is likely to leave the distortions caused by the corporate income tax unaffected, and to add new distortions to shareholders’ portfolio decisions.
    Keywords: Tax neutrality; open economy; shareholder taxation; corporate-personal tax integration; small firms
    JEL: H24 H25
    Date: 2011–04–28
  3. By: Arnold, Sven; Lahmann, Alexander; Schwetzler, Bernd
    Abstract: In einem kürzlich erschienenen ZfB-Beitrag schlagen Förster et al. eine Vorgehensweise für die Erfassung der Zinsschranke und ihrer Wirkung auf die zinsinduzierte Steuerersparnis vor. Dieser Beitrag nimmt kritisch dazu Stellung: Es wird gezeigt, dass die dort abgeleiteten Formeln für die Steuerersparnisse nicht konsistent sind und bei positiven Zinsaufwendungen negative Steuerersparnisse zulassen. Die von den Autoren vorgeschlagene Aufspaltung der Steuerersparnisse ist u.E. nicht geeignet die Komplexität des Bewertungsproblems zu verringern: Die Schätzung der erwarteten Steuerersparnisse für die zweite Komponente setzt die Kenntnis der möglichen Entwicklungspfade der Steuerersparnis voraus. Die vorgeschlagene Aufteilung erhöht die Anzahl der zusätzlich zu schätzenden Diskontierungssätze. Schließlich setzt die Ableitung der risikoäquivalenten Diskontierungssätze die Kenntnis des Wertbeitrages bereits voraus. -- The German 'Zinsschranke' limits the tax deductability of interest expenses. Recently, in this journal Förster et al. have developed a model to incorporate this tax regulation into the calculation of the tax shield in corporate valuation. Our paper critically comments on this proposal.
    Keywords: Unternehmensbewertung,Kapitalstruktur,Tax Shield,Zinsschranke,Corporate Valuation,Capital Structure,Interest Ceiling Rule
    JEL: G32 H20
    Date: 2011
  4. By: Sharma, Chanchal Kumar
    Abstract: The most desirable system of allocations should avoid effi ciency losses, resulting from either fi nancial dependency, or subnational fi scal operations by striking a balance between fi scal autonomy and reliance on federal transfers of SNGs.
    Keywords: fiscal federalism; intergovernmental relations; tax policy; fiscal governance.
    JEL: H0 H7 H3
    Date: 2011–01
  5. By: Dr. Ken, Rich
    Abstract: A junior lien or mortgage not receiving payments, over and above the value of the property, and sitting behind a first mortgage going to foreclosure can still be worth thousands of dollars if handled right. Donating such a worthless mortgage to a charity (that will accept it) can make a 10-fold difference in how much and how fast you can get from the IRS as a bad debt write off. This treatise ties disjointed parts of the IRS tax code together for your greater benefit.
    Keywords: mortgage; bad debt; foreclosure; default; defaulting; taxes; tax code;; IRS; donation; write off
    JEL: H25 H24 G21
    Date: 2011
  6. By: Abdelaal Mahmoud, Ashraf
    Abstract: Despite impressive studies on financial crises consequences and foreign capital flows, by large the research done has examined these economic phenomenons separately without addressing their nexus. This paper aims at bridging this gap by examining the impact of financial crises on bilateral foreign direct investment (BFDI). Financial turmoil reshapes the perception and magnitude of BFDI flows in both host and home countries; host countries governments see in FDI a mean for overcoming the sluggish economic situation and hence become eager to stimulate FDI inflows, while for the same reasons home countries governments, and investors become more cautious about their decisions to invest abroad. This paper addresses in particular the impact of financial crises on FDI in both host and home countries. To that end the paper uses a panel data covering the period 1985-2008 on home countries, as presented by the six largest FDI outflow, and 42 host countries. Empirical analysis applies the system GMM estimator to a gravity model of BFDI flows. The key findings in this paper are that financial crises exerts a negative impact on BFDI, a generalized fact that applies to all financial disturbances that took place during the last 23 years. Second the magnitude of the negative shock of financial crises on FDI differs by type and origins causing the financial crises.
    Keywords: Foreign direct investment; financial crisis; Bilateral Foreign direct investment; dynamic panel data; spatial dependence.
    JEL: E2 C3 F02
    Date: 2011–01–16
  7. By: Sheldon, Ian; McCorriston, Steve
    Abstract: In this paper, analysis is presented relating to the impact of border tax adjustments for climate policy on the international competitiveness of energy-intensive industries, and the related problem of carbon leakage. While many of the economic and legal issues are not particularly new, climate policy does present some possible twists to the analysis of border tax adjustments when vertically-related markets can be characterized as a successive oligopoly. Specifically, an appropriate border tax adjustment will depend on the incidence of a domestic carbon tax, the nature of competition in upstream and downstream sectors, as well as the basis for assessing the trade neutrality of any border tax adjustment. If trade neutrality is defined in terms of market volume, even though carbon leakage is reduced, domestic firm competitiveness cannot be maintained. This compares to defining trade neutrality in terms of market share, which results in domestic competitiveness being maintained and global carbon emissions being reduced.
    Keywords: climate policy, carbon leakage, border tax adjustments, imperfect competition, Environmental Economics and Policy, International Relations/Trade, H87, Q38,
    Date: 2011

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