nep-acc New Economics Papers
on Accounting and Auditing
Issue of 2014‒05‒09
nine papers chosen by
Alexander Harin
Modern University for the Humanities

  1. Do Corporate Tax Cuts Reduce International Profit Shifting? By Brandstetter, Laura
  2. The effect of tax preparation expenses for employees: Evidence from Germany By Blaufus, Kay; Hechtner, Frank; Möhlmann, Axel
  3. Property Tax and Fiscal Discipline in OECD Countries By Andrea Filippo Presbitero; Agnese Sacchi; Alberto Zazzaro
  4. Impacts of Property Taxation on Residential Real Estate Development By Richard England; Min Qiang Zhao; Ju-Chin Huang
  5. VAT Rebates and Export Performance in China: Firm-level Evidence By Piyush Chandra; Cheryl Long
  6. Tax Obstacles for the Development of an Effective Euro-Mediterranean Free-Trade Area. An IFTA model for the European Union? By José Miguel Martín Rodríguez
  7. Can Momentum Factors Be Used to Enhance Accounting Information based Fundamental Analysis in Explaining Stock Price Movements? By KiHoon Jimmy Hong; Eliza Wu
  8. Organizacijski aspekti računovodstvenih informacijskih sustava i njihova važnost By Tomić, Bojan; Strancarić, Sandra
  9. Mean Reversion of the Current Account and Sustainability : Evidence from European Countries By Kurmas Akdogan

  1. By: Brandstetter, Laura
    Abstract: This paper analyzes whether a corporate tax cut reduces profit shifting to low-tax countries. I use firm-level data of 2,812 German corporations around the Business Tax Reform in 2008. Applying a difference-in-differences framework with a one-on-one matching strategy, which compares earnings of multinational and domestic corporations, I do not find empirical evidence that even a 10 percentage points cut in the business tax rate leads to a reduction of profit shifting activities. --
    Keywords: corporate taxation,international profit shifting
    JEL: F23 H25 H26
    Date: 2014
  2. By: Blaufus, Kay; Hechtner, Frank; Möhlmann, Axel
    Abstract: Tax preparation firms advertise their services as a way to save taxes. To investigate this subject, we use a panel of German income tax accounting data, consisting of employees and other taxpayers with non-business income, to explore the relationship between expenses for tax preparation and tax liabilities. We find a negative link with expenses exceeding estimated tax savings. Specifically, one additional Euro yields an estimated tax savings of 72 cents in an OLS regression and 24 cents in a fixed-effects regression. This finding indicates that cross-section estimates are upward biased. The magnitude of the effect implies that tax preparation expenses are not worthwhile from a tax saving perspective alone. In consideration of time savings, combined tax and time savings also do not exceed expenses for any income quintile. The result is robust to various alternative specifications such that in no setting do the pecuniary and time savings exceed the tax preparation expenses. Overall, our findings suggest an important benefit of tax preparation expenses beyond tax and time savings. --
    Keywords: response to taxation,tax advisors,tax return preparation,tax preparation expenses
    JEL: H24 H31
    Date: 2014
  3. By: Andrea Filippo Presbitero (International Monetary Fund, Universit… Politecnica delle Marche - MoFiR); Agnese Sacchi (Faculty of Economics - Universitas Mercatorum (Rome, Italy);, Governance and Economics Research Network, University of Vigo (Spain)); Alberto Zazzaro (Universit… Politecnica delle Marche, MoFiR)
    Abstract: This paper investigates the effects of property taxation on fiscal discipline for a sample of OECD countries over the period 1973-2011. We find that aggregate property taxation in total tax revenues is not statistically correlated with the primary surplus-to-GDP ratio. In contrast, a greater reliance on property taxes pertaining to sub-national governments contributes to fiscal discipline, suggesting that fiscal decentralization should favor responsive tax base instruments.
    Keywords: Fiscal imbalance, Property tax, Sub-national governments, Tax decentralization
    JEL: E62 H62 H71 H77
    Date: 2014–05
  4. By: Richard England; Min Qiang Zhao; Ju-Chin Huang
    Abstract: Decisions about residential lot size and square footage are influenced by a variety of determinants ranging from zoning regulations to neighborhood characteristics. Our theoretical analysis suggests that the property tax rate could also affect residential lot sizes and the sizes of newly constructed houses. Using descriptions for over 36 thousand houses built in New Hampshire between 1985 and 2006, we find empirical evidence that higher property taxes are indeed associated with both smaller lots and smaller houses. On average, higher property tax rates are associated with more additional living space per newly developed acre. These effects are modest in magnitude, however.
    Date: 2013–10–14
  5. By: Piyush Chandra; Cheryl Long
    Abstract: A destination-based VAT system without a complete export tax rebate is detrimental to a country's exports, while an increase in the VAT rebate rate helps reduce the negative effects. In this paper, we study the role of VAT rebates in affecting Chinese exports using firm-level panel data for 2000–2006. To address potential endogeneity, we rely on a quasi-natural policy experiment in 2004, when the fiscal conditions of local governments became important in determining the actual VAT rebate rates for exports. The empirical findings demonstrate significant and large effects of VAT rebates on export volume. On average, for each percentage point increase in the VAT rebate rate, the amount of exports increased by 13%, which translates into an additional $4.70 of exports for each $1 of export tax rebates paid.
    Keywords: VAT rebate, Export growth, Trade policy, China
    Date: 2013–10–14
  6. By: José Miguel Martín Rodríguez
    Abstract: As we know, the European Union has faced the challenge of harmonization in the tax field with varied results. We may think that the advanced harmonization in indirect taxes (custom duties, VAT and excise duties) has reduced the distortions that they may create in the intra-EU commerce. Far from this assumption, in the paper we will underline how the lack of a complete harmonization may create competitive advantages in certain countries and sectors. Specifically, we will examine how the road haulage sector is affected by the differences in diesel excise duties among Member States. The proposal for a Euro-Mediterranean Free-Trade Area would face the same problems as the European Union. If there are distortions inside the European Union, the extension of the free trade area to other mediterranean countries would possibly worsen it. This is why we suggest the establishment of a system equivalent to the IFTA (International Fuel Tax Agreement), existing in the United States and Canada, in order to achieve an efficient haulage system free of tax distortions.
    Keywords: excise duties, diesel, fuel tourism, IFTA, tax harmonization
    Date: 2014–03
  7. By: KiHoon Jimmy Hong (Finance Discipline Group, UTS Business School, University of Technology, Sydney); Eliza Wu (Finance Discipline Group, UTS Business School, University of Technology, Sydney)
    Abstract: This paper provides new empirical evidence that price-based momentum indicator variables can enhance the ability of accounting variables in explaining cross-sectional stock returns. We apply both OLS and state-space modelling to a sample of firms included in the Russell 3000 index over the period from 1999-2012 to compare the roles of the two main types of information typically used by equity investors. Empirical results reveal the importance of accounting variables over longer term horizons for particularly, small-cap stocks. Momentum variables are shown to be important in the shorter term horizons. This result remains robust to alternative methodologies used.
    Keywords: Stock Returns; Fundamental Analysis; Momentum; State Space Model
    JEL: G12 G14
    Date: 2014–03–01
  8. By: Tomić, Bojan; Strancarić, Sandra
    Abstract: Daily we are confronted with the companies problems in acquiring or maintaining competitive advantage. By Croatian accession to the European Union that struggle became more pronounced. However, competitors can be only high-quality and successful companies, and many business decisions depend on managers. It is necessary to have quality accounting information to make such imprtants decisions. Accounting must be organized in such a way that at any moment it can produce any kind of information relevant for management. Selection and implementation of an information system is certainly one of the most important decision that a business entity can bring. Impact of the quality of accounting information systems (AIS) on the quality of accounting information and the impact of realization of the same information, is the topic of this paper. What happens when a big company applies modular rather than integrated AIS and how to solve problems which arise in the application of accounting harmonization with the actual situation, the factor of human error during manual entry, untimely availability of certain resources and information, and at the end of analytical records of compliance by individual accounts synthetic records in the general ledger. The main issue of this paper is finding possible answer in introducing modern integrated business information systems (ERP systems) as a solution of the problem for large IT companies. The conclusion shows that the system of internal controls and information and communication technology are essential component of AIS. If the company wants to operate efficiently and concurrently, it is necessary to find and integrate RIS highest quality in order to improve long-term business.
    Keywords: RIS, ERP sustavi, informacijski sustavi, modul kupaca i dobavljača
    JEL: M4 M41
    Date: 2014
  9. By: Kurmas Akdogan
    Abstract: Stationarity of the current account is suggested as an indicator of the current account sustainability in the literature. We explore the presence of mean-reverting behaviour in current accounts of 24 European countries, using linear and nonlinear unit root tests. Our results suggest mean reversion of the current account-to-GDP ratios for almost two-thirds of the countries in our sample, hence; provide supporting evidence for the current account sustainability of these countries.
    Keywords: Current account sustainability, stationarity, non-linear adjustment, non-linear models
    JEL: C22 F32
    Date: 2014

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