nep-acc New Economics Papers
on Accounting and Auditing
Issue of 2020‒11‒16
six papers chosen by

  1. Is VAT also a corporate tax? Untangling tax burdens and benefits for companies By Roxan, Ian
  2. Taxation trends in the European Union: 2018 edition By European Commission
  3. Italy Towards Mandatory Sustainability Reporting. Voluntary Corporate Social Responsibility Disclosure of Italian Companies and Legislative Decree 254/2016 Statements. A Quantitative Analysis of the Last 10 Years By Balluchi, Federica; Furlotti, Katia; Torelli, Riccardo
  4. Designing Direct Tax Reforms: Alternative Approaches By Alinaghi, Nazila; Creedy, John; Gemmell, Norman
  5. Mortgage Tax Reforms in Sweden: Scope for a Double Dividend? By Isabelle Justo; Julien Hartley; Fidel Picos; Sara Riscado
  6. Fast and exact audit scheduling optimization By Jan Motl; Pavel Kord\'ik

  1. By: Roxan, Ian
    Abstract: The Great Financial Crisis has increased concerns about whether corporations are paying a ‘fair’ amount of tax in different countries. This begs the question of what a ‘fair’ amount of tax is. The question is complicated by the continuing lack of clarity about the economic incidence of corporate income tax. Recently, it has been argued that the location of the sales revenue (turnover) of a corporation is relevant in determining the fair allocation. Of course, in many countries there is already a tax based on sales, value-added tax (VAT), also called goods and services tax (GST). This paper explores an illustration, arising from a series of cases before the European Court of Justice, of how VAT can impose a burden on corporations. The illustration raises issues of principle for VAT, but also offers lessons about how we tax corporations, particularly given proposals such as for digital sales taxes in the EU and the idea of a destination-based cash-flow tax included in legislative proposals in the US in 2016. This article explores the puzzles raised by the illustration and shows how it can throw light not only on the nature of VAT but also on the incidence of corporate income tax.
    Keywords: value added tax; corporate income tax; holding companies; economic incidence of tax; globalisation and tax
    JEL: E6 R14 J01
    Date: 2020–03
  2. By: European Commission
    Abstract: This report contains a detailed statistical and economic analysis of the tax systems of the Member States of the European Union, plus Iceland and Norway, which are Members of the European Economic Area. The data are presented within a unified statistical framework (the ESA2010 harmonised system of national and regional accounts), which makes it possible to assess the heterogeneous national tax systems on a fully comparable basis.
    Keywords: European Union, taxation
    JEL: H23 H24 H25 H27 H71
    Date: 2020–07
  3. By: Balluchi, Federica; Furlotti, Katia; Torelli, Riccardo
    Abstract: Corporate Social Responsibility Disclosure (CSRD) is crucial in providing transparent and reliable information. Company characteristics play a key role in CSRD, but legislation is important and positive in increasing the number of companies, which make complete and transparent sustainability disclosure and stimulating CSR initiatives. In 2016, for the first time, Italian Legislative Decree 254/2016 requires ‘public interest entities’, to integrate statutory financial statements with disclosure of environmental, social and governance strategies from financial year 2017 onwards. This chapter investigates the role of company characteristics in influencing voluntary disclosure. The analysis focused on voluntary CSRD (2007–2016) implemented by Italian listed companies in the 10-year period, and shows that in a non-mandatory context the number of CSR reports published grew steadily. It reveals the voluntary behavior of Italian companies, compliance with the requirements of the Decree with reference to the different dimensions of sustainability, and to the use of international standards and guidelines. Findings show also a marked increase of the number of companies, which, in 2017, produced a non-financial report after the entry into force of the new law. The strength of this work is that it investigates what happened in the decade preceding the introduction of the new law tracing the relationship between historical situation, business characteristics and the requirements of the legislative decree. These results and the immediate impact of the new regulation are interestingly linked to the relationship between law and sustainable development and will be directly and indirectly useful for scholars, managers and national and international regulators.
    Date: 2020–07–07
  4. By: Alinaghi, Nazila; Creedy, John; Gemmell, Norman
    Abstract: How high should the top personal income tax rate be? Is there an `optimal' structure of tax rates and thresholds? Despite numerous value judgements being required to answer such questions, this paper suggests that 'rational policy analysis' principles can nevertheless be applied to support policy advice on these and other direct tax design questions. It is argued that the economic models thought suitable as the basis for tax analysis vary according to the precise ways in which the policy question is formulated; the underlying behavioural responses to taxation expected across the taxpaying population; the precise definitions of key variables such as income inequality; and the specification of policy objectives such as redistribution, revenue-raising or tax efficiency.
    Keywords: Tax policy, Tax reform, Tax rates,
    Date: 2020
  5. By: Isabelle Justo; Julien Hartley; Fidel Picos; Sara Riscado
    Abstract: Since the inception of the macroeconomic imbalance procedure in 2011, Sweden has been identified as having an imbalance related to increasing house prices and private indebtedness. Tax incentives for property ownership and mortgage debt are widely seen as important structural drivers behind household debt growth and overvalued house prices. Against this backdrop, the Council of the EU has asked Sweden to limit mortgage interest deductibility (MID). At the same time, despite a strong labour market with the highest employment rate in the EU, not all groups have benefited from job opportunities to the same extent. In particular, low-skilled workers have lower participation and employment rates, while their unemployment rate was, with 18.5% in 2017, well above the overall unemployment rate of 6.7%. Against this background, this economic brief considers shifting taxes from labour to property as a way to tackle macroeconomic vulnerabilities in the housing sector and labour market challenges in Sweden. We use the EUROMOD tax-benefit microsimulation model and the European Commission QUEST model to show that eliminating the MID, and using the additional tax revenues (around 0.3% of GDP) created to reduce, in a targeted way, labour taxes for vulnerable groups, could support their employment, while removing a structural driver of household debt growth.
    Keywords: imbalance, mortgage interest deductibility, tax shift, Mortgage Tax Reforms in Sweden: Scope for a Double Dividend?, Isabelle Justo, Julien Hartley, Fidel Picos, Sara Riscado.
    JEL: H30 J68
    Date: 2019–09
  6. By: Jan Motl; Pavel Kord\'ik
    Abstract: This article is concerned with the cost and time effective scheduling of financial auditors with Integer Linear Programming. The schedule optimization takes into account 13 different constraints, staff scarcity, frequent alterations of the input data with the need to minimize the changes in the generated schedule, and scaling issues. We compared two exact formulations of the problem and we found a multi-commodity network flow formulation to be 24 times faster than a three-dimensional formulation. The delivered implementation reduced time to the first schedule from 3 man-days to 1 hour and the schedule update time from 1 man-day to 4 minutes.
    Date: 2020–11

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