nep-acc New Economics Papers
on Accounting and Auditing
Issue of 2015‒09‒05
nine papers chosen by
Alexander Harin
Modern University for the Humanities

  1. How Does Foreign Aid Affect the Relationship between IFRS Adoption and Foreign Direct Investment? By Efobi, Uchenna; Nnadi, Matthias
  2. Identification and Classification of Objects of Accounting and Attributes of Objects of Accounting in the State Information Resources By Braude-Zolotarev, M.; Voloshkin; Serbina, E.; Negorodov, Vitaliy
  3. Philippines: Fiscal Transparency Evaluation By International Monetary Fund. Fiscal Affairs Dept.
  4. Tax elasticity to business cycle: an overview of three taxes from 1979 to 2013 in France By Q. LAFFÉTER; M. PAK
  5. The impact of taxes on bilateral royalty flows By Dudar, Olena; Spengel, Christoph; Voget, Johannes
  6. Tax Policy in MENA Countries: Looking Back and Forward By Mario Mansour
  7. Taxation of Dividend Income and Economic Growth: The Case of Europe By Dackehag, Margareta; Hansson, Åsa
  9. Country Size and Corporate Tax Rate: Rationale and Empirics By Azémar, Céline; Desbordes, Rodolphe; Wooton, Ian

  1. By: Efobi, Uchenna; Nnadi, Matthias
    Abstract: The attraction of Foreign Direct Investment (FDI) is arguably of particular importance to countries’ foreign policy, where competing factors determine the choice of location of these investors. IFRS adoption, being one of the cardinal frameworks that portray the quality of a countries information environment, is seen as having a significant influence on the choice of FDI location. Noting that foreign aid (a form of foreign finance) may compete directly with, or complement FDI, this paper investigates the extent to which IFRS adoption is able to at-tract FDI in the presence of this form of finance. The main idea being that the effect of IFRS adoption on FDI may be adjustable depending on the presence of, and the kind of foreign aid flow in the country. Using a panel data of 92 countries for the period 2003-2012, we indeed find that IFRS adoption attracts more FDI, conditioned on foreign aid; however, when dis-aggregating foreign aid, the effect of bilateral aid was contradictory, while multilateral aid flow was positive. This result remained consistent despite the battery of checks.
    Keywords: Accounting Standards,Foreign Aid,Foreign Direct Investment,Globalisation,IFRS Adoption
    Date: 2015–06
  2. By: Braude-Zolotarev, M. (Russian Presidential Academy of National Economy and Public Administration (RANEPA)); Voloshkin (Russian Presidential Academy of National Economy and Public Administration (RANEPA)); Serbina, E. (Russian Presidential Academy of National Economy and Public Administration (RANEPA)); Negorodov, Vitaliy (Russian Presidential Academy of National Economy and Public Administration (RANEPA))
    Abstract: This work - the result of a study to identify approaches to regulating the activities of the state to conduct public information resources. As part of the work: We studied the existing approaches to the concept and discussed the value of the state information resources; Studied species and the functioning of the state information resources; The existing approaches to the concept and certain accounting items of state information resources; Researched the notion of objects of primary legal registration of state information resources as a special type of accounting items of state information resources; We studied the concept and possible types of attributes of objects of accounting for government information resources; We made proposals for amendments to the current legislation of the Russian Federation in order to optimize the functioning of the state information resources.
    Keywords: government information resources, the state information system, accounting objects of state information resources, interdepartmental information communication
    Date: 2015–05
  3. By: International Monetary Fund. Fiscal Affairs Dept.
    Abstract: This paper discusses the findings of Fiscal Transparency Evaluation on Philippines. Improving fiscal transparency has been a priority in the Philippines over recent years. The government’s public financial management reform strategy has helped initiate a wide variety of reforms, which are beginning to bear fruit. Fiscal reporting is relatively comprehensive, frequent, and timely, with many areas of good and advanced practices. Fiscal risk analysis and management is relatively strong in the Philippines compared with other countries. However, improvements are needed in a few areas, especially to capture of risks from guarantees and public–private partnership, assess the scope of tax expenditures, and introduce a longer-term perspective in the fiscal sustainability analysis.
    Keywords: Philippines;transparency, budget, fiscal transparency, public sector, expenditure
    Date: 2015–06–30
  4. By: Q. LAFFÉTER (Insee); M. PAK (Insee)
    Abstract: Taxes in France have not always increased as anticipated, since tax revenue was sometimes higher than expected, for instance during the jackpot episode in 1999, or lower than expected, in 2009 and more recently in 2013. The purpose of this study is to examine the sensitivity of the three main State taxes in France to the business cycle over the 1979-2013 period: the personal income tax (PIT), the value added tax (VAT), and the corporate income tax (CIT). First these taxes need to be corrected for the effects of discretionary measures, which partly influence how taxes grow. Second, the elasticities of these taxes, broadly measured under an unchanged tax system, are estimated. Starting with a simple model to estimate the instantaneous elasticity of each tax to GDP, more complex specifications relying on the existing literature are then tested, in order to acknowledge sensitivity of each tax to the economic environment. According to our results, PIT revenues instantaneous elasticity to an activity shock is almost equal to one if annual inflation adjustments are considered as automatic rather than discretionary. VAT revenues behave almost in a similar way. However this response to activity is slightly stronger when stemming from a shock on volume rather than a shock on price. The CIT is a tax based on the previous year, but it is very sensitive to instantaneous shock, thus acting as a stabilizer. It is also sensitive to asset prices.
    Keywords: personal income tax, corporate income tax, VAT, discretionary measures, endogenous growth of tax receipts, tax elasticities
    JEL: H24 H25 H31 H32
    Date: 2015
  5. By: Dudar, Olena; Spengel, Christoph; Voget, Johannes
    Abstract: In 2013 the OECD introduced its Action Plan on base erosion and profit shifting (BEPS). One of the major concerns of this Plan is a strategic use of intangible assets as an instrument for profit shifting. The main purpose of this paper is to test whether multinational enterprises use intangibles as an important BEPS channel by empirically analysing the relationship between taxation and bilateral royalty flows. We employ the OECD data on 3,660 country-pairs for the time period of 1990-2012 and apply the Poisson pseudo-maximum likelihood estimator in a fixed-effects framework. The main results point to a negative impact of taxation on bilateral royalty flows. Moreover, we find that tax differentials, which represent a relative level of taxation in a recipient state compared to other potential royalty recipients, have a significant influence on royalty payments as well. For tax policy considerations, the paper provides various insights to the ongoing work on BEPS by the G20, the OECD, and the European Commission. For example, we find that such reform suggestions of the OECD Action Plan as an enforcement of the Nexus Approach, as well as an introduction of strict Controlled Foreign Company rules and transfer pricing regulations are likely to reduce international royalty flows.
    Keywords: royalty,intangible assets,tax planning,corporate taxation
    JEL: H25 F23 H26 H3
    Date: 2015
  6. By: Mario Mansour
    Abstract: This paper reviews trends in taxation and revenue in MENA countries over 1990-2012, with a focus on non-resource taxes. On average, non-resource revenues declined slightly, while resource revenues soared. Country experiences vary: rates of main taxes and their revenues tend to be higher in the Magreb than in the Mashreq, except for the value-added tax, where lower rates are associated with equal or higher revenue; most oil producers raise little tax revenues—generally less than 5 percent of GDP—and most have reduced them since the late 1990s. But there are similarities: unlike common experience around the world, income taxes (not indirect taxes) have partially compensated for lost revenue from trade liberalization; revenues from indirect taxes have remained stable; personal income taxes have played an unimportant role as a revenue tool; and fees and stamp duties are significant revenue sources. Looking forward, tax reform challenges will also vary across countries: the Maghreb needs to focus on efficiency-enhancing reforms, especially in capital income and consumption taxes; the Mashreq have some room to increase revenue; and, there are ample opportunities to improve equity and reduce complexity of tax systems in all countries. Finally, the recent decline in oil prices and revenues is a reminder that even resource-rich GCC countries need to lay the basis of a tax system for the future.
    Keywords: Corporate income taxes;Consumption taxes;Cross country analysis;Algeria;Egypt;Saudi Arabia;Oman;Personal income taxes;Jordan;Kuwait;Libyan Arab Jamahiriya;Lebanon;Iraq;Iran, Islamic Republic of;Morocco;North Africa;Middle East;Mauritania;Yemen, Republic of;Syrian Arab Republic;Tax policy;Stamp duties;Taxation;Tax revenues;United Arab Emirates;Tunisia;resource revenues, tax reform, MENA, tax, revenues, revenue, taxes, General, Personal Income and Other Nonbusiness Taxes and Subsidies, Business Taxes and Subsidies, Taxation, Subsidies, and Revenues: Other Sources of Revenue, Other,
    Date: 2015–05–05
  7. By: Dackehag, Margareta (Department of Economics, Lund University); Hansson, Åsa (Department of Economics, Lund University)
    Abstract: More recently researchers have turned to analyze how the tax structure, rather than the overall tax level, affects economic performance. For instance, several papers have investigated how taxation on corporate and individual (labor) income influences growth. Taxation of dividend income may also influence growth via its impact on investments and firm behavior. Within the academic community there is conflicting views about the impact taxation of dividends has on firm behavior and, hence, on economic performance. According to the “traditional view”, taxation of dividends is distortionary and increases the cost of equity. According to the “new view”, taxation of dividends does not influence the marginal cost of capital and consequently has no impact on investment decisions. To our knowledge, this paper is the first study to explore how tax rates on dividends affect economic growth, by using panel data from 1990 till 2008 for 18 European countries. We find that taxation of dividend income negatively influences economic growth, a result that corroborates the old view of dividends taxation as distortionary and also has some policy implication for the European countries in question.
    Keywords: Economic growth; taxation of corporate income; taxation of personal income
    JEL: H21 H24 H25 O40
    Date: 2015–08–14
  8. By: ZEW
    Abstract: The project 'Effective tax rates in an enlarged European Union' is based on the methodology used for the calculation of effective tax rates (ETRs) as set out by Devereux and Griffith (1999, 2003). It extends the scope of the calculation of ETRs conducted under the study on effective levels of company taxation within an enlarged EU (2008). The project includes a focus on the effects of tax reforms in the EU28, FYROM and Turkey as well as Norway, Switzerland, Canada, Japan and the United States for the period 1998-2014 and their impact on the level of taxation for both domestic and cross-border investment.
    Keywords: European Union, taxation, effective tax, corporate tax, enlarged European Union
    Date: 2014–10
  9. By: Azémar, Céline; Desbordes, Rodolphe; Wooton, Ian
    Abstract: This paper investigates whether the differences in corporate tax rates set by countries can be explained, in part, by the size of national home markets. We set up a simple model in which multinational firms within an industry choose where to invest, given the levels of corporation tax rates in each location. This model yields predictions with respect to the influences of the relative size of countries on the differences in corporate tax rates that should arise in equilibrium. We then test these predictions using data from 27 European Union member-states for the period 1981-2005. Consistent with our model, we find that large countries set higher corporate tax rates than their smaller competitors for FDI. Our rationale for the existence of this effect, the market access, withstands the test of alternative explanations.
    Keywords: corporate tax rate; country size; foreign direct investment; tax competition
    JEL: E62 F23 H25
    Date: 2015–08

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