nep-acc New Economics Papers
on Accounting and Auditing
Issue of 2013‒10‒11
nine papers chosen by
Alexander Harin
Modern University for the Humanities

  1. Republic of Trinidad and Tobago : Report on the Observance of Standard and Codes - Accounting and Auditing By World Bank
  2. Intellectual property box regimes: Effective tax rates and tax policy considerations By Evers, Lisa; Miller, Helen; Spengel, Christoph
  3. Taxation and Labor Force Participation: The Case of Italy By Fabrizio Colonna; Stefania Marcassa
  4. Using the Discrete Model to Derive Optimal Income Tax Rates By Bastani, Spencer
  5. Tax Me If You Can! Optimal Nonlinear Income Tax Between Competing Governments By Etienne Lehmann; Laurent Simula; alain trannoy
  6. Heavy subsidization reduces free-ridership : Evidence from an econometric study of the French dwelling insulation tax credit By Marie-Laure Nauleau
  7. Tax competition in the eurozone: Capital mobility, agglomeration, and the small country disadvantage By Rademacher, Inga
  8. Net interoffice accounts of global banks: the role of domestic funding. By D’Avino, C.
  9. The effectiveness of transnational non-state governance: The role of domestic regulations and compliance assessment in practice By Malets, Olga

  1. By: World Bank
    Keywords: Private Sector Development - Competitiveness and Competition Policy Private Sector Development - Business Environment Finance and Financial Sector Development - Debt Markets Banks and Banking Reform Private Sector Development - Business in Development
    Date: 2013–03
  2. By: Evers, Lisa; Miller, Helen; Spengel, Christoph
    Abstract: 11 European countries now operate IP Box regimes that provide substantially reduced rates of corporate tax for income derived from important forms of intellectual property. We incorporate these policies into forward-looking measures of the cost of capital, effective marginal tax rates and effective average tax rates. We show that the treatment of expenses relating to IP income is particularly important in determining the effective tax burden. A key finding is that regimes that allow expenses to be deducted at the ordinary corporate income tax rate, as opposed to the IP Box tax rate, may result in negative tax rates and can thereby provide a subsidy to unprofitable projects. We assess the specific design features of different regimes against the possible policy aim of improving the incentives to undertake R&D investment in a country. While some countries have tried to tie the policy to real activities, others have designed a policy targeted at the income streams associated with intellectual property. A key concern is the role that IP Boxes may play in increased, and possibly harmful, tax competition between European countries. --
    Keywords: corporate taxation,effective tax rate,innovation,tax incentive patent box,innovation box,license box,tax competition
    JEL: H25 H32 H87 K34 O38
    Date: 2013
  3. By: Fabrizio Colonna (Banca d'Italia - Banca d'Italia); Stefania Marcassa (THEMA - Théorie économique, modélisation et applications - CNRS : UMR8184 - Université de Cergy Pontoise)
    Abstract: Italy has the lowest labor force participation of women among European countries. Moreover, the participation rate of married women is positively correlated to their husbands' income. We show that a high tax schedule together with tax credits and transfers raise the burden of two-earner households, generating disincentives to work. We estimate a structural labor supply model for women, and use the estimated parameters to simulate the effects of alternative revenue-neutral tax systems. We find that joint taxation implies a drop in the participation rate. Conversely, working tax credit and gender-based taxation boost it, with the effects of the former concentrated on low educated women.
    Keywords: female labor force participation, Italian tax system, second earner tax rate, joint taxation, gender-based taxation, working tax credit
    Date: 2013–10–02
  4. By: Bastani, Spencer (Uppsala Center for Fiscal Studies)
    Abstract: In this paper I perform numerical simulations of the discrete model of optimal income taxation employing a large number of taxpayer types. Moreover, I indicate how the results depend on the number of types used to represent the wage distribution. Finally, I compare simulations of the continuous and discrete optimal tax models under identical circumstances based on US wage data.
    Keywords: optimal income taxation; simulations; computational methods
    JEL: C63 H21 H24
    Date: 2013–10–02
  5. By: Etienne Lehmann (TEPP - Travail, Emploi et Politiques Publiques - CNRS : FR3435 - Université Paris-Est Marne-la-Vallée (UPEMLV), CREST - Centre de Recherche en Économie et Statistique - INSEE - École Nationale de la Statistique et de l'Administration Économique, ERMES - Equipe de recherche sur les marches, l'emploi et la simulation - CNRS : UMR7017 - Université Paris II - Panthéon-Assas); Laurent Simula (University of Upssala - University of Upssala); alain trannoy (EHESS - École des hautes études en sciences sociales - École des Hautes Études en Sciences Sociales [EHESS])
    Abstract: We investigate how potential tax-driven migrations modify the Mirrlees income tax schedule when two countries play Nash. The social objective is the maximin and preferences are quasilinear in income. Individuals differ both in skills and migration costs, which are continuously distributed. We derive the optimal marginal income tax rates at the equilibrium, extending the Diamond-Saez formula. The theory and numerical simulations on the US case show that the level and the slope of the semi-elasticity of migration on which we lack empirical evidence are crucial to derive the shape of optimal marginal income tax. Our simulations show that potential migrations result in a welfare drop between 0.4% and 5.3% for the worst-off and an average gain between 18.9% and 29.3% for the top 1%.
    Keywords: Optimal Income Tax; Income Tax competition; Migration; Labor Mobility; NashEquilibrium Tax Schedules
    Date: 2013–09–24
  6. By: Marie-Laure Nauleau (CIRED - Centre International de Recherche sur l'Environnement et le Développement - Centre de coopération internationale en recherche agronomique pour le développement [CIRAD] : UMR56 - CNRS : UMR8568 - École des Hautes Études en Sciences Sociales [EHESS] - École des Ponts ParisTech (ENPC) - AgroParisTech)
    Abstract: This econometric study assesses the efficiency of the tax credit implemented in France in 2005 on dwelling retrofitting investments. A before-after estimation is performed at the extensive and intensive margins on micro data over 2001-2011, focusing on insulation measures (windows, walls, roofs, floor, ceilings). After 2-years of latency with no significant effect, the tax credit has had an increasing significant positive effect at both margins between 2007 and 2010, with a decrease in 2011, in line with the tax credit rate evolutions. Focusing on opaque surfaces insulation, the positive effect only started in 2009, when a reform included labor cost in the tax credit base for these retrofitting measures. The percentage of subsidized households that would have invested even in the absence of the subsidy decreases from 79% in 2007 to 43% in 2010. The annual additional private investment in retrofitting generated by 1€ of public expenses was estimated at 3.4€ on average (standard deviation : 2.4) between 2007 and 2010.
    Date: 2013–09–30
  7. By: Rademacher, Inga
    Abstract: The increasing economic integration among OECD countries since the late 1970s has attracted much attention in tax policy research. Although several studies have tested whether capital mobility induces a race to the bottom in capital taxation, the two approaches - competition and compensation theory - provide diametrically opposed answers to this question. One theory predicts a reduction in taxation, the other a stagnation or increase in taxation. This paper examines the question once again. However, instead of aggregating all OECD countries into one sample, it compares EMU countries - with nearly perfect capital mobility - to non-EMU countries in a difference-in- differences regression. Controlling for market size, I found that the EMU led to a divergence in taxation for small and large countries. Although the reduction in small countries could be explained by competition theory, the increase in large countries is not in line with the conventional theories. I argue that agglomeration forces give large countries an advantage in terms of attracting foreign direct investment (FDI) because of beneficial supply and demand chains. Small countries are disadvantaged in terms of capital attraction, which they counter by reducing capital taxation. -- Die zunehmende wirtschaftliche Integration der OECD-Länder seit den späten 1970er- Jahren ist für die Steuerforschung von großem Interesse. In verschiedenen Studien wurde bereits untersucht, ob Kapitalmobilität zu einer Abwärtsspirale bei der Kapitalbesteuerung führt. Doch die Analysen der beiden Literaturstränge - Wettbewerbs- sowie Kompensationstheorie - kommen zu gegensätzlichen Ergebnissen. Während eine Theorie eine Senkung der Besteuerung prognostiziert, prophezeit die andere eine Stagnation oder einen Anstieg. Dieses Papier untersucht die Frage ein weiteres Mal, erstmalig allerdings auf der Basis eines Vergleichs von EWU-Ländern - mit fast perfekter Kapitalmobilität - und Nicht-EWU-Ländern. Die Difference-in-Differences-Regression zeigt, dass die EWU divergierende Entwicklungen in der Besteuerung kleiner und großer Länder befördert hat. Während die Reduzierung der Besteuerung in kleinen Staaten mit der Wettbewerbstheorie erklärt werden könnte, ist der Anstieg in großen Mitgliedsstaaten nicht mit den herkömmlichen Theorien vereinbar. Die Autorin argumentiert, dass Agglomerationskräfte den großen Mitgliedsstaaten durch günstige Liefer- und Nachfrageketten einen Vorteil im Hinblick auf ausländische Direktinvestitionen verschaffen. Kleine Staaten sind wegen ihrer geringeren Kapitalattraktivität benachteiligt, der sie mit einer Senkung der Kapitalbesteuerung entgegenwirken wollen.
    Date: 2013
  8. By: D’Avino, C.
    Abstract: Using US banks' balance sheet data, this paper examines the responsiveness of net interoffice accounts, that is, the net liabilities of parent offices due to their foreign-related offices, to variations in different types of domestic funding. Furthermore, it investigates whether the relationship between net interoffice accounts and domestic policy-steered rates depends on cross-sectional differences in the funding structure of global banks. Estimation results suggest that domestic interbank and repo borrowings are important drivers of net interoffice accounts, the latter being significant during the crisis period. A negative relationship between policy rates and net interoffice accounts is observed only for those global banks with a relatively higher share of repo borrowings.
    Keywords: US global banks, net interoffice accounts, funding.
    JEL: G21 F34 E58
    Date: 2013
  9. By: Malets, Olga
    Abstract: The paper examines how a domestic institutional environment and third-party compliance assessment shape the effects and effectiveness of certification and labeling. Certification represents a form of transnational non-state market-driven governance of the environmental and social performance of firms. Based on an extensive qualitative analysis, this paper explores two factors that influence the forest certification program of the Forest Stewardship Council. First, the institutional setup and the implementation and enforcement of domestic law can restrict the effectiveness of certification if certification requirements contradict or significantly exceed national law or the institutional environment presents significant challenges to certification. Second, I show that third-party auditing, auditors, and certifiers play a crucial role in this challenging institutional environment. I adopt a dynamic approach to the analysis of these elements, focusing on how domestic law and institutions and transnational standards interact over time. Contrary to existing literature, which emphasizes certification and auditing methods and procedures, it is not only how the assessment system is set up but the ways it is applied in practice that shape the implementation of voluntary certification standards and induce certified forestry operations to modify their practices. -- Wirkung und Effektivität von Zertifizierung und Kennzeichnung sind mit dem nationalen institutionellen Umfeld und der externen Bewertung von Compliance verknüpft. Zertifizierung ist eine Form transnationaler, nicht marktgesteuerter Governance der Nachhaltigkeit und Sozialverträglichkeit von Wirtschaftsunternehmen. Auf der Basis einer umfangreichen Qualitätsanalyse untersucht diese Studie zwei Faktoren, die das Waldzertifizierungsprogramm des Forest Stewardship Council beeinflussen. Zum einen können die institutionellen Voraussetzungen sowie Implementierung und Anwendung nationaler Gesetzgebung die Effektivität der Zertifizierung einschränken, wenn ihre Anforderungen den nationalen gesetzlichen Bestimmungen zuwiderlaufen, sie überschreiten oder das institutionelle Umfeld die Zertifizierung erschwert. Zum anderen spielen externes Audit, Auditoren und Zertifizierer eine wichtige Rolle in diesem komplexen institutionellen Umfeld. Mit einer dynamischen Herangehensweise wird analysiert, wie nationale Gesetzgebung, Institutionen und transnationale Standards über längere Zeiträume interagieren. Im Gegensatz zur vorliegenden Literatur, die Zertifizierung, Audit-Methoden und Prozeduren bestätigt, kommt die Autorin zu dem Schluss, dass nicht nur der Aufbau des Zertifizierungssystems, sondern die Art und Weise seiner Anwendung in der Praxis eine Wirkung auf die Implementierung freiwilliger Zertifizierungsstandards und die Einführung zertifizierter Vorgänge in Waldbetrieben haben können.
    Date: 2013

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