nep-acc New Economics Papers
on Accounting and Auditing
Issue of 2023‒06‒12
seven papers chosen by
Alexander Harin
Modern University for the Humanities

  1. Ethical behavior, auditing strength, and tax evasion: A worldwide perspective By Ramzi Benkraiem; Ali Uyar; Merve Kilic; Friedrich Schneider
  2. Profit shifting of multinational enterprises: evidence from the Nordics By Viertola, Marika
  3. Following a new tax leader: the urge to implement Formulary Apportionment in the European Union By Joana Andrade Vicente
  4. Guatemala: Technical Assistance Report-International Taxation Challenges and Options By International Monetary Fund
  5. Welfare Effects of Indirect Tax Policies in West Africa By Alain Babatoundé; Bart Capéau; Romain Houssa
  6. Republic of Kazakhstan: Technical Assistance Report-Government Finance Statistics (October 10-21, 2022) By International Monetary Fund
  7. Does employee ownership decrease agency costs? Evidence from French listed companies By Abdelnour Joseph; Aubert Nicolas; Campa Domenico

  1. By: Ramzi Benkraiem (Audencia Business School); Ali Uyar; Merve Kilic; Friedrich Schneider
    Date: 2021–06
  2. By: Viertola, Marika
    Abstract: This paper studies how Nordic multinational enterprises (MNEs) react to tax incentives generated by international corporate income tax rate differences and shift profit to low tax countries. A firm level panel data set containing ownership and accounting information is used to study profit shifting within the time period of 2012-2017. Applying a panel data adjusted Hines-Rice approach including firm and year fixed effects results in statistically significant tax semi-elasticity estimates between -0.7 to -1.3. The results are confirmed by several robustness checks as well as by applying the newest methods in two-way fixed effects literature. This suggests that MNEs with ultimate owners located in the Nordic countries seem to react to tax rate differences by shifting profit. Additionally, the MNEs within the euro area seem to engage more heavily in profit shifting.
    Keywords: multinational firms, profit shifting, international corporate taxation, tax avoidance, Business taxation and regulation, F23, H25, H26, fi=Verotus|sv=Beskattning|en=Taxation|,
    Date: 2023
  3. By: Joana Andrade Vicente
    Abstract: In this paper we analyse the United States’ role as the current international tax leader, acting as an institutional leader uncapable of pushing forward towards a new, more suitable international corporate tax regime, due to the particularities of its international taxation system and economic preferences. After assessing United States multinationals’ activity in the Single Market, we find evidence of artificial profit shifting across Member States under the current method to allocate multinational enterprises’ profits. Such actions challenge a fair international taxation in the European Union, distorting European internal competition and hampering tax revenues collection. Although it may not be (yet) the time for a worldwide unitary taxation approach, the analysis performed highlights the urge for the European Union to overcome the United States political power and to unilaterally adopt the Formulary Apportionment approach, overhauling a century-old set of global tax rules based in the separate entity approach.
    Keywords: Country-by-Country Reporting; European Union; Formulary Apportionment; United States multinationals enterprises; tax havens.
    JEL: F23 H25 H26
    Date: 2023–05
  4. By: International Monetary Fund
    Abstract: In response to a request by the Ministry of Public Finance (MFP) of Guatemala, a remote technical assistance mission was carried out by the Fiscal Affairs Department (FAD) of the International Monetary Fund (IMF) from March 7 to 21, 2022, to analyze certain international aspects of the country’s tax regime. Discussions focused on treaties for the avoidance of double taxation and their effectiveness in attracting foreign direct investment, transfer pricing regulations, and the implications for Guatemala of the minimum standards agreed by the tax base erosion and profit shifting (BEPS) project backed by the G20 and the Organisation for Economic Co-operation and Development (OECD).
    Keywords: Foreign-direct investment; double-taxation avoidance treaties; transfer-pricing; base erosion and profit-shifting.; PwC tax specialist; foreign direct investment; tax practice; tax architecture; tax context; FDI data; taxation challenge; tax purpose; maquila regime; tax strategy; Foreign direct investment; Income; Double taxation; Income and capital gains taxes; Transfer pricing; Global; Caribbean; Central America
    Date: 2023–04–24
  5. By: Alain Babatoundé; Bart Capéau; Romain Houssa
    Abstract: In West Africa, the Value Added Tax (VAT) policy consists of a uniform tax rate, but several items consumed by rich and poor households, are exempted. We provide an optimal tax framework to reflect on the welfare effects of such a tariff structure, in the context of current debates on domestic resource mobilisation in low-income countries (LICs). Our analysis includes the distinguishing feature that a significant part of the consumption goods in LICs stems from own production, and can therefore not be taxed. We also account for preference heterogeneity over market goods and auto-consumption. A preference consistent individual welfare measure that depends on both types of goods, is used. To determine optimal tax rates, individual welfare levels are aggregated by social welfare functions with different degrees of inequality aversion. We apply this framework to household data from Benin. The results support reforms for alternative VAT rate structures that improve welfare in the region. In comparison to the current VAT policy, our reforms yield higher average relative welfare gains for the lower deciles. Due to preferences heterogeneity, however, we find winners and losers in all welfare deciles. We develop a bootstrap procedure to construct confidence intervals on welfare indicators.
    Keywords: Africa, Value Added Tax (VAT), optimal taxation, taste heterogeneity, domestic resource mobilisation, tax reform, welfare
    JEL: O55 O23 H21 H23 H75
    Date: 2023
  6. By: International Monetary Fund
    Abstract: *Please note this report is only available in Russian* This technical assistance (TA) mission on Government Finance Statistics (GFS) was conducted during October 10-21, 2022. The main purpose of the mission was to review and finalize the annual GFS data submission for 2021. Provide training to new compilers and source data providers in the fundamentals of GFS, the accounting principles, and classifications aligned to the Government Finance Statistics Manual 2014 (GFSM 2014), bridge tables, and data quality control procedures. In addition, the mission provided recommendations on the delineation of the general government and the broader public sector.
    Keywords: Government Finance Statistics; General Government; Public Sector; Training.
    Date: 2023–04–25
  7. By: Abdelnour Joseph (ESSCA Research Lab - ESSCA - Ecole Supérieure des Sciences Commerciales d'Angers); Aubert Nicolas (CERGAM - Centre d'Études et de Recherche en Gestion d'Aix-Marseille - AMU - Aix Marseille Université - UTLN - Université de Toulon); Campa Domenico (IUM - International University of Monaco - International University of Monaco)
    Abstract: Employee stock ownership (ESO) is often associated with decreases in agency costs because it increases employees' satisfaction and attachment to their company and aligns the employees' and their firm's interests. Another stream of research argues that ESO may have the opposite effect on agency costs because it serves as a management entrenchment tool and leads to divergence between stakeholders. This paper examines the relationship between ESO and agency costs in France, a leading European country for ESO. Using a panel database of 125 firms over the period 2002–2016, we find an inverted U-shaped relationship between ESO and agency costs. This evidence highlights that low levels of ESO increase agency costs, consistent with managerial entrenchment mechanisms. The findings also suggest that beyond a certain point, ESO reduces agency problems because it links employees' wealth to their firm's success.
    Abstract: L'actionnariat salarié (AS) est souvent associé à une diminution des coûts d'agence car il augmente la satisfaction des salariés et leur attachement à leur entreprise et aligne leurs intérêts avec ceux de l'entreprise. Un autre courant de recherche suggère que l'AS peut avoir l'effet inverse sur les coûts d'agence en servant l'enracinement des dirigeants. Il entraînerait une divergence entre les parties prenantes et diminuerait la valeur actionnariale. Cet article étudie la relation entre AS et coûts d'agence en France, un pays leader européen en matière d'AS. Nos analyses sur des données issues de 125 entreprises françaises cotées sur la période 2002-2016 mettent en évidence une relation en U inversé entre l'AS et les coûts d'agence. Nos résultats indiquent que des niveaux faibles ou élevés d'AS sont associés à des coûts d'agence élevés en raison de l'enracinement des dirigeants. Les résultats suggèrent aussi qu'au-delà d'un certain seuil, l'AS réduit les problèmes d'agence en liant le patrimoine des salariés à la performance de leur entreprise.
    Keywords: Corporate governance, Employee stock ownership, Shared capitalism., Agency costs, Audit fees, Coûts d’agence, Honoraires d’audit, Gouvernance d’entreprise, Actionnariat salarié, Partage du capital
    Date: 2022

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