nep-acc New Economics Papers
on Accounting and Auditing
Issue of 2017‒05‒14
seven papers chosen by

  1. Whistleblowing vs random audit: An experimental test of relative effciency By Cécile Bazart; Mickael Beaud; Dimitri Dubois
  2. The Effects of Tax Reforms to Address the Debt-Equity Bias on the Cost of Capital and on Effective Tax Rates By Centre for European Economic Research (ZEW)
  3. Comprehensive Tax Reform in the Philippines: Principles, History and Recommendations By Renato E. Reside, Jr.; Lee Burns
  4. The Impact of Tax Planning on Forward-Looking Effective Tax Rates By Centre for European Economic Research (ZEW)
  5. Global value chains, innovation and firms’ performance during the crisis By Valentina Meliciani; Grzegorz Tchorek
  6. Policy Effects of International Taxation on Firm Dynamics and Capital Structure By Spencer, Adam
  7. Incidence of value added taxation on inequality: Evidence from Sri Lanka By P Sivashankar; RMPS Rathnayake; Maneka Jayasinghe; Christine Smith

  1. By: Cécile Bazart; Mickael Beaud; Dimitri Dubois
    Abstract: This paper reports an experimental test of the relative effciency of a whistleblowing-based audit scheme compared to a random-based audit scheme. We design a between-subjects laboratory experiment with two treatments: a benchmark with a random-based audit scheme and an alternative treatment in which taxpayers can blow the whistle. Compared to the benchmark, the whistleblowing-based audit scheme (i) decreases the monetary amount of tax evasion, (ii) improves the targeting of evaders and (iii) raises the tax levy
    Date: 2017–05
  2. By: Centre for European Economic Research (ZEW)
    Abstract: This study analysis current interest deduction limitation rules in the EU28 Member States and assesses the effect of interest deduction limitation rules on effective tax rates, provides insights on the effects of the fundamental tax reform options on current tax systems, considers a revenue-neutral implementation of the reforms and possible consequences for the level of investment in the EU28 Member States.
    Keywords: corporate taxation, effective tax rates, dept-bias, tax reforms
    JEL: H21 H26 E43
    Date: 2016–10
  3. By: Renato E. Reside, Jr. (School of Economics, University of the Philippines Diliman); Lee Burns (University of Sydney, Australia)
    Abstract: The new Duterte administration is planning to undertake a reform of the country’s tax system. This paper provides a background to options available to the government moving forward, starting with basic principles of taxation, criteria for evaluation, tax instruments and mix of instruments. The background is complemented by a review of the history of past tax reforms in the Philippines, from the end of the Marcos regime to the Aquino administration. The historical and episodic assessment ends with a list of lessons learned from the past. Finally, recommendations are made for both tax policy and tax administration.
    Keywords: tax reform; taxation; Philippines
    JEL: H2 O23
    Date: 2016–09
  4. By: Centre for European Economic Research (ZEW)
    Abstract: This study provides a general insight into the effect of different profit shifting strategies on effective tax rates for cross-border investments between the 28 EU member states and the US. In particular, this study enhances the baseline findings of ongoing research conducted by ZEW on behalf of the European Commission. Specifically, this report presents the cost of capital (CoC) and the effective average tax rates (EATR) for cross-border investments between the 28 EU member states and the US distinguishing between scenarios that involve seven different tax planning strategies.
    Keywords: corporate taxation, effective tax rates, cross-border investment, profit shifting, tax planning
    JEL: H21 H26 E43
    Date: 2016–10
  5. By: Valentina Meliciani (University Luiss Guido Carli, Rome, Italy); Grzegorz Tchorek (Narodowy Bank Polski and University of Warsaw)
    Abstract: This paper studies the determinants of companies’ performance during the crisis based on their short-term (sales changes) and medium-term (exit) reaction, using firms’ data from the EFIGE survey and combining them with balance-sheet statistics. The results show that vulnerability to the crisis depended on a company’s position within a GVC and modes of international operation. While exporters were more affected than nonexporters during the first crisis, their survival rates were not lower five years later. Moreover, more sophisticated internationalization modes increased firms’ resilience in the first and second waves of the crisis. The paper also investigates the mediating role of intangible assets and financial constraints in the relationship between internationalization and companies’ response to the crisis. While intangible assets were very important for preventing a drop in sales for internationalized firms immediately after 2008, they amplified the probability of firms’ exit five years after the crisis in weaker European countries (Spain and Italy). At the same time, financial constraints increased companies’ probability of exit. Innovation prevented a drop in firms’ sales and firms’ exit.
    Keywords: global value chains, crisis, intangible assets, financial constraints
    JEL: O3 E22 G01
    Date: 2017
  6. By: Spencer, Adam
    Abstract: I develop and calibrate an industry equilibrium model with heterogeneous multinational firms to study the impact of a potential policy change from the current U.S. worldwide taxation system to a territorial system on firm investment, capital structure, payout policy and tax revenues. Firms in the model make both intensive and extensive margin decisions in terms of overseas investment. They optimally choose dividend payments to shareholders, holdings of riskless debt securities and earnings repatriations from the subsidiary to the parent in each period. To estimate the impact of the policy change, I solve the model under both worldwide and territorial systems and compare the stationary equilibria. The results show that the policy change causes both domestic and overseas production by U.S. firms to rise. In addition, firms borrow more and pay larger dividends to shareholders. These effects on firm variables are coupled with a rise in U.S. Government tax collections.
    Keywords: Multinational corporations, Firm dynamics, Capital structure, Corporate taxation, Repatriation tax
    JEL: F23 G32 H25 L11
    Date: 2017–05–06
  7. By: P Sivashankar; RMPS Rathnayake; Maneka Jayasinghe; Christine Smith
    Keywords: Inequality, Value Added Tax, Tax incidence, Kakwani index, Gini coefficient
    JEL: H24 H22 H31 D31 C18
    Date: 2017–04

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