nep-acc New Economics Papers
on Accounting and Auditing
Issue of 2023‒04‒24
four papers chosen by
Alexander Harin
Modern University for the Humanities

  1. BEFIT - Formulary Apportionment in the European Union By Marketa Mlcuchova
  2. The Economics of the Global Minimum Tax By Guttorm Schjelderup; Frank Stähler
  3. Analysis attempt of the relationship between tax burden and taxpayer compliance : A literature review By Rida BELAHOUAOUI; El Houssain ATTAK
  4. Capital Gains Realizations By James R. Hines, Jr.; Daniel Schaffa

  1. By: Marketa Mlcuchova (Department of Finance, Faculty of Business and Economics, Mendel University in Brno, Zemedelska 1, 613 00 Brno, Czech Republic)
    Abstract: This paper seeks to contribute to the current debate on EU wide corporate taxation, steered by the impending BEFIT Proposal. The objective of this paper is to verify whether the inclusion of intangible assets will enhance the ability of the current proposals for Formulary Apportionment (FA) to explain variability in profitability. The research question addressed is “What is the explanatory power of the FA, for factors such as tangible assets, intangible assets, labour and sales by destination, to describe the variability in the profitability of companies active within the EU internal market?†. The research reveals that the inclusion of intangible assets fails to enhance the explanatory power of the FA and that factoring in intangible assets does not appear to have a statistically significant effect in the model.
    Keywords: Formulary Apportionment, BEFIT, Separate Accounting, EU corporate taxation
    JEL: F23 H25 K34
    Date: 2023–03
  2. By: Guttorm Schjelderup; Frank Stähler
    Abstract: This paper shows that the OECD inclusive framework of Pillar Two fails to implement the claimed 15% minimum corporate tax for all subsidiaries of multinational corporations that are not shell companies. The reason is that the Substance-based Income Exclusion of Pillar Two allows to tax-deduct payroll costs and user costs of intangible assets twice from the tax base of the top-up tax. Employing a standard multinational firm model, we show that Pillar Two changes the employment, investment and import incentives. For a sufficiently large cost share of labor and/or capital, the Substance-based Income Exclusion is equivalent to a production subsidy.
    Keywords: corporate taxation, BEPS, Pillar Two, minimum tax
    JEL: F23 F55 H25 H73
    Date: 2023
  3. By: Rida BELAHOUAOUI (UCA - Université Cadi Ayyad [Marrakech]); El Houssain ATTAK (UCA - Université Cadi Ayyad [Marrakech])
    Abstract: Tax revenue mobilization remains one of the most pressing issues, especially for developing countries, as it is an important driver for the achievement of sustainable development goals. Consequently, developing countries, whose main source of financing is tax revenue, are constantly seeking to increase the level of these resources, leading to an increase in the tax burden that affects taxpayers' behavior. The objective of this article is to analyze the relationship between tax burden and taxpayer compliance through a review of the theoretical literature. Indeed, the consequences of the tax burden on taxpayers' compliance have been the subject of much research since the 14th century. According to most economists, the tax burden has a negative impact on taxpayer compliance. Ibn Khaldun showed that an ever-increasing tax burden has a direct and negative impact on taxpayers' compliance. For his part, Laffer illustrated that, due to the rational expectations of economic agents, any increase in the tax rate beyond the optimal level reduces taxpayer compliance. According to the comparative treatment model, the tax compliance rate decreases when a taxpayer perceives that his tax burden is higher than that of other taxpayers in the same group. The results of this review of the theoretical literature confirm that the tax burden is related to taxpayer compliance, so that there is a level of tax burden above which taxpayers develop tax evasion behavior.
    Abstract: La mobilisation des recettes fiscales reste l'une des questions les plus pressantes, surtout pour les pays en développement, car elle constitue un moteur important pour la réalisation des objectifs de développement durable. Par conséquent, les pays en développement, dont les recettes fiscales constituent la principale source de financement, cherchent constamment à accroître le niveau de ces ressources, ce qui entraîne une augmentation de la pression fiscale qui affecte le comportement des contribuables. L'objectif de cet article est d'analyser la relation entre la pression fiscale et la conformité des contribuables à travers une revue de la littérature théorique. En effet, les conséquences de la pression fiscale sur la conformité des contribuables ont fait l'objet de nombreuses recherches depuis le 14ème siècle. Selon la plupart des économistes, la pression fiscale a un impact négatif sur la conformité des contribuables. Ibn Khaldoun a montré qu'une pression fiscale toujours plus lourde a un impact direct et négatif sur le respect des règles par les contribuables. Pour sa part, Laffer a illustré que, en raison des anticipations rationnelles des agents économiques, toute augmentation du taux d'imposition au-delà du niveau optimal réduit la conformité des contribuables. Selon le modèle du traitement comparatif, le taux de conformité fiscale diminue lorsqu'un contribuable perçoit que sa pression fiscale est plus élevée que celle des autres contribuables du même groupe. Les résultats de cette revue de la littérature théorique confirment que la pression fiscale est liée à la conformité des contribuables, de sorte qu'il existe un niveau de pression fiscale au-delà duquel les contribuables développent un comportement d'évasion fiscale.
    Keywords: Tax burden, Tax compliance, Taxpayers, Determinants., Pression fiscale, Conformité fiscale, Contribuables, Déterminants.
    Date: 2022–03–31
  4. By: James R. Hines, Jr.; Daniel Schaffa
    Abstract: Evidence that high tax rates significantly depress capital gains realizations is inconsistent with the implications of neoclassical investment models in unchanging economic environments. Higher tax rates reduce after-tax investment returns, thereby encouraging investors to sell capital assets earlier. For a given investment horizon, higher tax rates need not reward accumulating unrealized gains over long periods – and even if they do, longer accumulations can lead to earlier realizations. Consequently, the sizeable observed effects of capital gains taxes likely reflect investor anticipations of future tax rate changes, rather than the time value of money.
    JEL: G11 H24 H31
    Date: 2023–03

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