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on Accounting and Auditing |
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Issue of 2023‒03‒13
nine papers chosen by |
| By: | Tijmen Tuinsma (Leuven Economics of Education Research, Katholieke Universiteit Leuven, Leuven, Belgium.); Kristof De Witte (Leuven Economics of Education Research, Katholieke Universiteit Leuven, Leuven, Belgium & UNU-MERIT, Maastricht University, Maastricht, The Netherlands.); Petr Janskı (Institute of Economic Studies, Faculty of Social Sciences, Charles University, Prague, Czech Republic); Miroslav Palanskı (Institute of Economic Studies, Faculty of Social Sciences, Charles University, Prague, Czech Republic); Vitezslav Titl (Leuven Economics of Education Research, Katholieke Universiteit Leuven, Leuven, Belgium & Utrecht University School of Economics, Utrecht University, Utrecht, The Netherlands.) |
| Abstract: | Private Country-by-Country Reporting (CbCR) is a measure against tax avoidance by large multinationals, implemented throughout the EU in 2016. Multinational companies with an annual revenue over EUR 750 million have been required to report their global activities on a country-by-country basis to tax authorities. Using this cutoff in a sharp regression discontinuity design, we find causal evidence for an increase in effective tax rates for affected companies, indicating an increase in tax compliance. We estimate the increase in effective tax rates at 5 to 6 percentage points locally. However, significant cross-sectional variation is present: the most aggressive multinationals with tax haven affiliates are at most moderately affected, while almost the full effect is concentrated in medium-aggressive firms. From a policy perspective, the results suggest that while CbCR was effective in combating some forms of tax avoidance, profit shifting opportunities in tax havens mostly negate this effect. |
| Keywords: | corporate tax avoidance, tax havens, financial transparency |
| JEL: | F23 H25 H26 |
| Date: | 2023–02 |
| URL: | http://d.repec.org/n?u=RePEc:fau:wpaper:wp2023_04&r=acc |
| By: | Sakib, S M Nazmuz |
| Abstract: | Not all the cryptocurrencies that exist now are actual a number of the human beings are the usage of the concept of cryptocurrency to dedicate the acts of fraud.In an occasion of fraud to a firm, accounting for economic statements is not possible and have an effect on the manner financial sports are carried out.Terrorists` sports purpose is to terrorise human beings and countries.The assist to terrorist impacts numerous human beings.Whenever terrorist contains out their sports the financial sports are affected that is a severe trouble of concern.Most of the cash laundering sports have additionally been directed toward the usage of cryptocurrency and makes use of felony commercial enterprise to cowl up for them, those impacts how the economic statements seem and also can have an effect on the whole commercial enterprise economic accounting if matters do now no longer fall into the proper place.Whenever the cryptocurrency transaction facts`s aren't properly disclosed the difficulty of accounting remedy turns into hard to assess and absence accounting remedy assessment disrupts the economic accounting processes.This influences significantly on how it's far handled in economic accounting and might cause numerous confusions.The trouble of relevancy of the cryptocurrency transaction has been addressed withinside the observe.The unfaithfulness of the customers of cryptocurrency may additionally cause the technology of untrustworthy accounting facts which may also have an effect on the financial sports or the firm`s choice making.The commercial enterprise version is likewise an trouble raised that wishes to be properly understood which will make a really perfect preference for the commercial enterprise with the intention to now no longer have an effect on the accounting facts and choice making.A observe has to have a issue, the issue that turned into visible on this observe is that the research predominant vicinity of studies turned into very particular to commercial enterprise economic accounting and financial sports and this vicinity of studies has now no longer been explored through many researches, therefore the studies centered at the confined facts accrued concerning this vicinity of studies. |
| Date: | 2021–12–30 |
| URL: | http://d.repec.org/n?u=RePEc:osf:osfxxx:6qk9m&r=acc |
| By: | Nikolai S. Milogolov (The Russian Presidential Academy Of National Economy And Public Administration); Azamat B. Berberov (The Russian Presidential Academy Of National Economy And Public Administration) |
| Abstract: | Unlike other types of passive income, dividends are formed directly from the profit of a legal entity and thus, theoretically, can be taxed twice - at the level of the company and the income recipient. Such disproportion in the conditions of economic activity creates several types of economic distortions, although tax conditions should not influence the economic agents’ decisions. The need to eliminate the disproportions determines the relevance of the topic, and the approach to its development determines the scientific novelty of this study. Thus, the goal of the work is to develop proposals for the harmonization of the taxation regime in the payment of dividends at the level of the company and its participants, including taking into account the problem of double taxation. In order to achieve this goal, the authors set the tasks that involve identifying the current features of the Russian tax legislation in terms of taxation on dividends, generalizing the relevant foreign experience, assessing the economic and fiscal consequences of different scenarios for reforming the current dividend taxation mechanism, and developing specific recommendations aimed at its improvement. The methodological basis of the study consisted of the following methods of scientific knowledge: historical and logical, statistical, induction and deduction, comparative analysis, synthesis, modeling, analogy, econometric, comparative legal. Based on the findings of the study, the authors made conclusions that economic distortions arising from double economic taxation when distributing profits in the form of dividends are characteristic of the Russian tax system; this is indicated, in particular, by the presence of "debt bias" in the financing of Russian private companies, as well as the parallel existence of different taxation principles of capital gains and other income other than dividends (interest and licensing payments). The authors' recommendations present an interrelated system of measures aimed at improving the current model of dividend taxation, including a consideration of the new socio-economic challenges facing the Russian economy. The paper substantiates the expediency of transition to partial exemption of dividends from taxation at the individual level through harmonization of the dividends taxation regime with the system of capital gains taxation. In order to harmonize the rules of dividends taxation with the mechanism of controlled foreign companies, it is also justified to reduce the threshold of “substantial participation in the capital” to 25% while using a zero-profit tax rate for dividends received. The authors also justify the implementation of the “allowance for corporate equity” mechanism in the tax law, which would align the dividends and interest taxation principles and become an investment incentive to attract new equity capital for taxpayers. Prospects of research within the framework of this topic are related to the development of economic and legal signs indicating the payment of "hidden dividends" by taxpayers, in the context of opportunities in the transformation of passive income from one type to another. |
| Keywords: | dividends, double taxation, debt bias, capital gain, economic distortions, withholding tax, tax exemptions, royalties, corporate income tax, allowance for corporate equity |
| URL: | http://d.repec.org/n?u=RePEc:rnp:wpaper:w2022064&r=acc |
| By: | Azamat B. Berberov (Gaidar Institute for Economic Policy); Nikolai S. Milogolov (The Russian Presidential Academy Of National Economy And Public Administration) |
| Abstract: | Unlike other types of passive income, dividends are formed directly from the profit of a legal entity and thus, theoretically, can be taxed twice - at the level of the company and the income recipient. Such disproportion in the conditions of economic activity creates several types of economic distortions, although tax conditions should not influence the economic agents’ decisions. The need to eliminate the disproportions determines the relevance of the topic, and the approach to its development determines the scientific novelty of this study. Thus, the goal of the work is to develop proposals for the harmonization of the taxation regime in the payment of dividends at the level of the company and its participants, including taking into account the problem of double taxation. In order to achieve this goal, the authors set the tasks that involve identifying the current features of the Russian tax legislation in terms of taxation on dividends, generalizing the relevant foreign experience, assessing the economic and fiscal consequences of different scenarios for reforming the current dividend taxation mechanism, and developing specific recommendations aimed at its improvement. The methodological basis of the study consisted of the following methods of scientific knowledge: historical and logical, statistical, induction and deduction, comparative analysis, synthesis, modeling, analogy, econometric, comparative legal. Based on the findings of the study, the authors made conclusions that economic distortions arising from double economic taxation when distributing profits in the form of dividends are characteristic of the Russian tax system; this is indicated, in particular, by the presence of "debt bias" in the financing of Russian private companies, as well as the parallel existence of different taxation principles of capital gains and other income other than dividends (interest and licensing payments). The authors' recommendations present an interrelated system of measures aimed at improving the current model of dividend taxation, including a consideration of the new socio-economic challenges facing the Russian economy. The paper substantiates the expediency of transition to partial exemption of dividends from taxation at the individual level through harmonization of the dividends taxation regime with the system of capital gains taxation. In order to harmonize the rules of dividends taxation with the mechanism of controlled foreign companies, it is also justified to reduce the threshold of “substantial participation in the capital” to 25% while using a zero-profit tax rate for dividends received. The authors also justify the implementation of the “allowance for corporate equity” mechanism in the tax law, which would align the dividends and interest taxation principles and become an investment incentive to attract new equity capital for taxpayers. Prospects of research within the framework of this topic are related to the development of economic and legal signs indicating the payment of "hidden dividends" by taxpayers, in the context of opportunities in the transformation of passive income from one type to another. |
| Keywords: | dividends, double taxation, debt bias, capital gain, economic distortions, withholding tax, tax exemptions, royalties, corporate income tax, allowance for corporate equity. |
| URL: | http://d.repec.org/n?u=RePEc:rnp:wpaper:w2022043&r=acc |
| By: | Levashenko A.D. (The Russian Presidential Academy Of National Economy And Public Administration); Koval A.A. (The Russian Presidential Academy Of National Economy And Public Administration) |
| Abstract: | The paper analyzes the legal relationship connected with the development of instruments for automatic exchange of tax information, which are being developed at the OECD level. Subject of the research is analysis of the automatic exchange instruments and the results of its implementation in the practice of states. Relevance of the research is based on the expanding use of automatic exchange of tax information between countries and the issues arising in connection with its application, the emergence of new tax programs aimed at increasing tax transparency. The goal of the study was to identify the issues of automatic exchange and develop proposals for the development of tax exchange instruments. Research methodology was based on the use of methods of logical, system, formal legal and comparative legal analysis. The authors analyze existing instruments for the automatic exchange of information on foreign accounts, cross-country reports on the activities of multinational corporations, and instruments for exchanging information on the sellers’ activities on e-commerce platforms. The research lays the foundations for the development of multilateral instruments for automatic exchange of tax information at the OECD level. To minimize the risks of tax evasion and improve the efficiency of the automatic exchange of tax information, the study proposes steps aimed at increasing the efficiency of Russia's participation in the OECD automatic exchange instruments - CRS MCAA and CbC MCAA. Based on the research, the following findings were made. First, based on the analysis of the legislation of individual countries and the first Peer Review published by the OECD in December 2020, one may conclude that most jurisdictions have a satisfactory legal framework, while in some countries, including Russia, it requires significant improvements. Second, a number of problems remain in the implementation of the standard for automatic exchange of information in Russia, which are primarily associated with the lack of effective mechanisms of responsibility for violation of self-certification and with the retention of currency control requirements. The results of the research include proposals for the development of automatic exchange instruments both on the OECD platform and in Russia. The main recommendations for the development of automatic tax exchange instruments at the OECD level were: improvement of the Peer Review instrument; development of the Model rules for mandatory disclosure on CRS avoidance arrangements and opaque offshore structures at the OECD level; creation of an international legal framework for the unimpeded use of CRS MCAA data for the purposes of combating money laundering and anti-corruption; further improvement and development of the CRS MCAA instrument for automatic exchange of information on foreign accounts. In particular, to improve the efficiency of the instrument, it is necessary to include digital currencies and crypto assets in its operation. The main recommendations for increasing the efficiency of Russia's participation in the automatic exchange of tax information instruments were: introduction of liability for false self-certification of clients and strengthening liability of financial institutions for violating the requirements of the General Reporting Standard; formation of a position regarding the identification of new entities (operators of investment platforms and the operators of the information system issuing digital financial assets) as financial market organizations for the purpose of automatic exchange; abolition of restrictions on foreign accounts and the development of automatic exchange, including with the EAEU countries; implementation of measures to combat white-collar crimes, including the creation of an institution protecting whistleblowers, the introduction of special provisions on liability, etc.; development of guidelines for risk evasion schemes, including CBI / RBI; introduction of a public CbCR (considering the EU proposals). |
| Keywords: | automatic exchange of tax information, OECD, cross-country reporting, CRS MCAA, CBC MCAA |
| URL: | http://d.repec.org/n?u=RePEc:rnp:wpaper:w2022065&r=acc |
| By: | Manon Francois; Vincent Vicard |
| Abstract: | Does the complexity of the ownership structure of multinational enterprises' (MNEs) serve tax avoidance? We use firm-level cross-country data to show that affiliates belonging to more complex MNEs are more likely to bunch around zero profit, which is consistent with complexity enabling tax avoidance by multinationals. Our results show that only the more complex MNEs shift profits away from their high-tax affiliates, while MNEs with flat ownership structures do not display such pattern. |
| Keywords: | Complexity;Firm organization;Multinational enterprises;Profit shifting;Tax avoidance |
| JEL: | F23 H2 L22 |
| Date: | 2023–02 |
| URL: | http://d.repec.org/n?u=RePEc:cii:cepidt:2023-04&r=acc |
| By: | Kwabena Adu-Ababio; Aliisa Koivisto; Andreya Kumwenda; Gregory Chileshe; John Mulenga; Mutemwa Mebelo; Ian Mufana; Yenda Shamabobo |
| Abstract: | Improving tax collection is essential if developing economies are to avoid over-reliance on external donor funds and loans. Revenue authorities in the Global South have recently adopted new policy tools to improve domestic revenue mobilization through taxes. One such new policy is a withholding system for value-added tax (VAT). In this study, we investigate the impact of adopting a system for withholding value-added tax on VAT collection in Zambia. While similar systems are in place in many countries, empirical research into their impact is still limited and inconclusive. |
| Keywords: | Value-added tax, Tax compliance, Tax administration, Africa |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:unu:wpaper:wp-2023-21&r=acc |
| By: | Jean-Marie Monnier (CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique) |
| Abstract: | The anti-tax argument has coalesced in recent years on the issue of tax exile considered as the symptom of tax persecution of the rich. The article aims to show that this approach ignores the nature of the relationship between the State and each individual tax-payer. Tax is not linked to the advantages that each citizen derives from public action nor from the individual appreciation of each to take charge of public financing needs. Secondly it recalls that tax progressivity must make it possible not to tax the subsistence minimum and that in reality, those who are avertaxed are at the bottom of the income range. Finally, there is no tax exile and tax expatriation stems from a desire to free oneself from national rules and take advantage of the competitive game between countries. |
| Abstract: | L'argumentaire anti-fiscal s'est coagulé ces dernières années autour de la question de l'exil fiscal considéré comme le symptôme d'une persécution fiscale des riches. L'article vise à montrer que cette approche méconnait la nature des relations entre le fisc et le contribuable individuel. Dans un premier temps, il montre qu'il n'y a pas de contrat marchand entre l'Etat et chaque contribuable individuel. L'impôt n'est pas lié aux avantages que retire chaque citoyen de l'action publique ni de l'appréciation individuelle de chacun à prendre en charge les besoins publics de financement. Dans un second temps on rappelle que la progressivité doit permettre de ne pas taxer le minimum de subsistance et que dans la réalité, ceux qui sont surimposés se situent dans le bas de l'éventail des revenus. Finalement, il n'y a pas d'exil fiscal et l'expatriation fiscale procède d'une volonté de s'affranchir des règles nationales et profiter du jeu concurrentiel entre pays. |
| Keywords: | tax evasion, tax exile, tax justice, tax policy, evasion fiscale, exil fiscal, justice fiscale, politique fiscale |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:hal:cesptp:hal-03950251&r=acc |
| By: | Francesco Menoncin; Andrea Modena |
| Abstract: | We develop a tractable model of a production economy in which public capital improves aggregate productivity and the taxpayers have heterogeneous evasion opportunities. We show that, by issuing bonds, compliant taxpayers supply the evaders with an instrument to hedge against auditing risks, thereby expanding their evasion capacity. Moreover, we demonstrate that a higher share of tax evaders reduces the economy’s total factor productivity but has a hump-shaped relationship with the growth rate of aggregate capital. |
| Keywords: | Dynamic tax evasion; general equilibrium; growth; heterogeneous agents |
| JEL: | E20 G11 H26 |
| Date: | 2023–02 |
| URL: | http://d.repec.org/n?u=RePEc:bon:boncrc:crctr224_2023_393&r=acc |