nep-acc New Economics Papers
on Accounting and Auditing
Issue of 2022‒11‒28
seven papers chosen by
Alexander Harin
Modern University for the Humanities

  1. Evolution of fiscal systems: Convergence or divergence? By Paloma Péligry; Xavier Ragot
  2. Property Tax Competition: A Quantitative Assessment By Rainald Borck; Jun Oshiro; Yasuhiro Sato
  3. Working Paper 06-22 - Évaluation ex ante de la réforme de la taxation des voitures de société en Belgique By Laurent Franckx
  4. Theoretischer Beitrag zu konzerninternen Transaktionen: Postulat der Steuerplanung durch Verrechnungspreise By Marouane Bakhir; El Houssain Attak
  5. Global profit shifting, 1975-2019 By Ludvig Wier; Gabriel Zucman
  6. Mandatory financial information disclosure and credit ratings By Vanhaverbeke, Steven; Balsmeier, Benjamin; Doherr, Thorsten
  7. From Lapdogs to Watchdogs: Random Auditor Assignment and Municipal Fiscal Performance By Silvia Vannutelli

  1. By: Paloma Péligry (CEPS - Centre d'Economie de l'ENS Paris-Saclay - Université Paris-Saclay - ENS Paris Saclay - Ecole Normale Supérieure Paris-Saclay); Xavier Ragot (ECON - Département d'économie (Sciences Po) - Sciences Po - Sciences Po - CNRS - Centre National de la Recherche Scientifique, OFCE - Observatoire français des conjonctures économiques (Sciences Po) - Sciences Po - Sciences Po, CNRS - Centre National de la Recherche Scientifique)
    Abstract: The purpose of this article is to analyze, more than ten years after the financial crisis of 2007, the convergence or divergence of the diversity of capitalism, focusing on the fiscal systems. Studying 29 countries, we first analyse the evolution of the taxation of households, firms, labour, consumption and capital. Then we use recent statistical method to indentify three types of fiscal systems: liberal, intermediate, and social-democratic, which can be ranked in ascending order of tax rates, confirming known typologies in the diversity of capitalism literature. The first result of this analysis is that only the tax rate on corporate profits shows signs of downward convergence over the period. The other tax rates, on labour or capital tax on households, show rather signs of divergence. Second, we show the divergence of the liberal and social-democratic group over the period. The European countries are converging towards the social-democratic model, with the exception of Great Britain, which is moving towards the liberal model over the period. Hence, the analysis shows that the divergence of fiscal systems is compatible with the convergence of certain taxes on the most mobile factors during a strong period of trade internationalization. Thus, the financial crisis does not seem to contribute to the convergence, but to the divergence of fiscal systems.
    Keywords: fiscal systems,globalization,capital taxation
    Date: 2022–02–03
    URL: http://d.repec.org/n?u=RePEc:hal:spmain:hal-03554224&r=acc
  2. By: Rainald Borck; Jun Oshiro; Yasuhiro Sato
    Abstract: We develop a model of property taxation and characterize equilibria under three alternative taxation regimes often used in the public finance literature: decentralized taxation, centralized taxation, and “rent seeking” regimes. We show that decentralized taxation results in inefficiently high tax rates, whereas centralized taxation yields a common optimal tax rate, and tax rates in the rent-seeking regime can be either inefficiently high or low. We quantify the effects of switching from the observed tax system to the three regimes for Japan and Germany. The decentralized or rent-seeking regime best describes the Japanese tax system, whereas the centralized regime does so for Germany. We also quantify the welfare effects of regime changes.
    Keywords: property taxes, tax competition, efficiency
    JEL: H71 H72 R13 R51
    Date: 2022
    URL: http://d.repec.org/n?u=RePEc:ces:ceswps:_10002&r=acc
  3. By: Laurent Franckx
    Abstract: In Belgium, the Law on Fiscal and Social Greening of Mobility of 25 November 2021 eliminates corporate tax deductibility for all company cars except those with zero CO2 emissions. The main effect of the tax reform is an accelerated electrification of the company car fleet and an accelerated decline in CO2 emissions. Compared to the no-reform scenario, the reform leads to an increase in net tax revenues of about 1 billion euro on an annual basis.
    Keywords: Company car taxation, Fiscal reform, Car demand, CO2, Car fleet greening, Discrete choice modelling
    JEL: C25 H2 H3 Q58 R48
    Date: 2022–10–12
    URL: http://d.repec.org/n?u=RePEc:fpb:wpaper:2206&r=acc
  4. By: Marouane Bakhir (Laboratoire d’innovation, responsabilité et développement durable-INREED); El Houssain Attak (Laboratoire d’innovation, responsabilité et développement durable-INREED)
    Abstract: Steuerplanung durch Verrechnungspreise ist eine Folge des Phänomens der Unternehmenskonzentration. Die Transaktionen zwischen Mutter- und Tochtergesellschaften haben zu Gewinnverlagerungen in Länder geführt, in denen die Besteuerung vorteilhafter ist. Das Bestreben der multinationalen Unternehmen, die Steuerlast zu senken, ist in unserer Zeit unvermeidlich geworden. In diesem Artikel werden die verschiedenen Aspekte im Zusammenhang mit der Verwendung von Verrechnungspreisen als Mittel der Steuerplanung anhand einer Überprüfung der theoretischen Literatur analysiert. Mehrere Autoren haben sich mit dem Steuerverhalten multinationaler Unternehmen befasst. Im Jahr 1883 stellte Henry Sidgwick eine Hypothese auf, die Verrechnungspreise definiert, ohne ihnen einen Namen zu geben, indem er davon ausging, dass bestimmte Güter während des Produktionsprozesses innerhalb des Unternehmens verbraucht werden. In der Folgezeit haben die multinationalen Unternehmen den Preis dieser Güter quantifiziert, um ihre konzerninternen Transaktionen zu bewerten und sie zu einem Instrument der Steuerplanung zu machen. 1961 definierte Hoffman die Steuerplanung erstmals als die Fähigkeit eines Steuerpflichtigen, seine Aktivitäten so zu gestalten und zu organisieren, dass seine Steuerlast minimiert wird. Die Ergebnisse dieser Überprüfung der theoretischen Literatur bestätigen, dass die Verwendung von Verrechnungspreisen zu Steuerplanungszwecken eine Realität ist, die vermieden werden könnte, indem multinationale Unternehmen zur Einhaltung des Fremdvergleichsgrundsatzes angehalten werden und die Staaten zur Harmonisierung der internationalen Steuersysteme angehalten werden.
    Abstract: Tax planning through transfer pricing is a consequence of the phenomenon of corporate concentration. Indeed, transactions between parent companies and their subsidiaries havegiven rise to profit shifting to countries where taxation is more advantageous. The quest by multinationals to reduce tax burdens has become an inevitability in our era.The purpose of this article is to analyze the various aspects related to the use of transfer pricing as a means of tax planning through a review of the theoretical literature. Several authors have focused on tax behavior of multinational companies. In 1883, Henry Sidgwick put forward a hypothesis defining transfer pricing without giving ita name, assuming that certain goods are consumed during the production process within the company. Subsequently, multinationals have quantified the price of these goods in order to value their intragroup transactions and make it a tax-planning tool. In 1961, Hoffman first defined tax planning as the ability of a taxpayer to arrange and organize his activities in such a way as to minimize his tax burden. The post-Hoffman era has seen the rise of the deliberate attempt by multinational corporations to minimize their tax liability through legal, illegal or immoral means.The results of this review of the theoretical literature confirm that the use of transfer pricing for tax planning purposes is a reality that could be avoided by encouraging multinationals to respect the arm's length principle and encouraging States to harmonize international tax systems.
    Abstract: Contribution théorique aux transactions intragroupe : Postulat de la planification fiscale par le biais du prix de transfert Résumé La planification fiscale par le biais des prix de transfert est une conséquence du phénomène de concentration d'entreprises. En effet, les transactions opérées entre les sociétés mères et leurs filiales ont donné naissance à des transferts de bénéfices vers des pays où la fiscalité est plus avantageuse. La quête de minoration des charges fiscales par les multinationales est devenue à notre ère une fatalité. L'objet de cet article est d'analyser les différents aspects liés à l'usage des prix de transfert comme moyen de planification fiscale par une revue de littérature théorique. Plusieurs auteurs se sont intéressés au comportement des multinationales à l'égard de l'impôt. En 1883, Henry Sidgwick émet une hypothèse définissant les prix de transfert sans leur donner de nom, il suppose que certains biens sont consommés lors du processus de production au sein de l'entreprise. Par la suite, les multinationales ont chiffré le prix desdits biens pour valoriser leurs transactions intra-groupes et en faire un moyen de planification fiscale par excellence. En 1961, Hoffman donne une première définition à la planification fiscale comme étant la capacité du contribuable à arranger et organiser ses activités de manière à minorer sa charge d'impôt. L'ère post-Hoffman a connu l'essor de la volonté délibérée des multinationales à minorer leur charge d'impôt par l'usage de moyens légaux, illégaux ou immoraux. Les aboutissements de la présente revue de littérature théorique confirment que l'usage des prix de transfert à des fins de planification fiscale est une réalité qui pourrait être accostée par l'incitation des multinationales au respect du principe de pleine concurrence et l'incitation des États à l'harmonisation des systèmes fiscaux internationaux.
    Keywords: international tax planning,intragroup transactions,Transfer pricing,planification fiscale internationale,transactions intragroupes,transfert de bénéfices
    Date: 2022–09–30
    URL: http://d.repec.org/n?u=RePEc:hal:journl:hal-03795987&r=acc
  5. By: Ludvig Wier; Gabriel Zucman
    Abstract: This paper constructs time series of global profit shifting covering the 2015-19 period, during which major international efforts were implemented to curb profit shifting. We find that (i) multinational profits grew faster than global profits, (ii) the share of multinational profits booked in tax havens remained constant at around 37 per cent, and (iii) the fraction of global corporate tax revenue lost due to profit shifting rose from 9 to 10 per cent.
    Keywords: Profit shifting, Multinational firms, Taxation, Corporate tax
    Date: 2022
    URL: http://d.repec.org/n?u=RePEc:unu:wpaper:wp-2022-121&r=acc
  6. By: Vanhaverbeke, Steven; Balsmeier, Benjamin; Doherr, Thorsten
    Abstract: When firms are forced to publicly disclose financial information, credit rating agencies are supposed to improve their risk assessments. Theory predicts such an information quality effect but also an adverse reputational concerns effect because credit analysts may become increasingly concerned about alleged rating failures. We empirically examine these predictions using a large scale quasi-natural experiment in Germany, where firms were required to publicly disclose annual financial statements. Consistent with the reputational concern hypothesis, we find an average increase in credit rating downgrades that is entirely driven by changes in the discretionary assessment of the credit analysts rather than changes in firm fundamentals. Analysts tend to give positive private information a lower weight in their risk assessment, while they put a higher weight on negative public information. A last set of results indicate that professional credit providers understand that the resulting downgrades are not warranted, while unsophisticated lenders did indeed reduce the provision of trade credit in response to the rating downgrades.
    Keywords: Credit Ratings,Disclosure Regulation,Private Firms,Reputational Concerns
    JEL: G14 G18 G24 M41
    Date: 2022
    URL: http://d.repec.org/n?u=RePEc:zbw:zewdip:22043&r=acc
  7. By: Silvia Vannutelli
    Abstract: A classic problem in public finance is the over-expenditure of local governments in expectation of a bailout from higher-level administrations. While monitoring could mitigate agency problems, it can itself be rendered ineffective if auditors are corruptible. I evaluate whether limiting auditors' conflicts of interest improves effectiveness and affects the financial health of local governments. I exploit the staggered introduction of a reform that removed the control of auditors' appointment from local politicians and introduced a random assignment mechanism. I obtain four main findings. First, random matching severes auditors-mayors connections. Second, treated municipalities significantly improve their net surpluses and debt repayments, per national government objectives. Third, the fiscal improvement results from a sizeable increase in tax capacity. Fourth, treatment effects are a combination of selection, matching and incentive effects. These findings highlight the value of auditor independence and illustrate how changes in the organizational design of the state can improve government performance.
    JEL: D73 H11 H71 H72 H77 H81 H83 M42
    Date: 2022–11
    URL: http://d.repec.org/n?u=RePEc:nbr:nberwo:30644&r=acc

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