nep-acc New Economics Papers
on Accounting and Auditing
Issue of 2024‒01‒15
nine papers chosen by

  1. Profit Shifting of Multinational Enterprises: Evidence from the Nordics By Marika Viertola
  2. Working Paper 06-22 - Évaluation ex ante de la réforme de la taxation des voitures de société en Belgique By Laurent Franckx
  3. L’apport de la technologie de l'information à l'audit continu : quelques pistes de réflexion et d'action By Phu Dao-Le Flécher
  4. The Global Minimum Tax and the taxation of MNE profit By Felix Hugger; Ana Cinta González Cabral; Massimo Bucci; Maria Gesualdo; Pierce O’Reilly
  5. Tax Heterogeneity and Misallocation By Barış Kaymak; Immo Schott
  6. Lebanon: Technical Assistance Report-Tax and Customs Administration: An Urgent Need for Intervention By International Monetary Fund
  7. Inflation Indexation: Current International Practices By Vybhavi Balasundharam; Arika Kayastha; Mr. Marcos Poplawski Ribeiro
  8. Optimal income taxation without tax evasion By Aronsson, Thomas; Xu, Fei
  9. Ex-Ante Design of Persuasion Games By Eric Gao; Daniel Luo

  1. By: Marika Viertola (VATT Institute for Economic Research)
    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 frms; proft shifting; international corporate taxation; tax avoidance
    JEL: F23 H25 H26
    Date: 2023–12
  2. 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. Â 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.Â
    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
  3. By: Phu Dao-Le Flécher (UEVE - Université d'Évry-Val-d'Essonne, LITEM - Laboratoire en Innovation, Technologies, Economie et Management (EA 7363) - UEVE - Université d'Évry-Val-d'Essonne - Université Paris-Saclay - IMT-BS - Institut Mines-Télécom Business School - IMT - Institut Mines-Télécom [Paris])
    Abstract: Grâce à l'amélioration constante de la technologie de l'information, les données financières des entreprises peuvent désormais être produites et échangées en temps réel, ce qui accentue la pression sur la profession pour que les commissaires aux comptes actualisent leur méthodologie d'audit et y apportent des innovations. Cet article souligne la nécessité pour les commissaires aux comptes d'intégrer le concept de l'audit continu dans leur démarche d'audit à l'ère du digital, et vise à montrer comment et dans quelle mesure la technologie de l'information permet de mettre en oeuvre des procédures d'audit automatisées et ainsi d'optimiser le processus d'audit.
    Keywords: Audit continu, Technologie de l’information, XBRL, Analyse de données structurées (Big Data Analytics), Procédures d’audit automatisées, Assurance continue
    Date: 2022–09–23
  4. By: Felix Hugger; Ana Cinta González Cabral; Massimo Bucci; Maria Gesualdo; Pierce O’Reilly
    Abstract: The paper assesses the impact of the global minimum tax (GMT) on the taxation of multinational enterprises (MNEs), based on a comprehensive dataset capturing the global activities of large MNEs. It has four key findings. First, the GMT substantially reduces the incentives to shift profits. Second, the GMT is estimated to very substantially reduce low-taxed profit worldwide through lower profit shifting and top-up taxation. Third, the GMT is estimated to increase CIT revenues. Finally, the GMT is estimated to reduce tax rate differentials across jurisdictions with potential impacts on the allocation of investment and MNE activity.
    JEL: F23 H26 H25
    Date: 2024–01–09
  5. By: Barış Kaymak; Immo Schott
    Abstract: Companies face different effective marginal tax rates on their income. This can be detrimental to allocative efficiency unless taxes offset other distortions in the economy. This paper estimates the effect of tax rate heterogeneity on aggregate productivity in distorted economies with multiple frictions. Using firm-level balance-sheet data and estimates of marginal tax rates, we find that tax heterogeneity reduces total factor productivity by about 3 percent. Our findings highlight the positive correlation between marginal tax rates and other distortions to capital and especially labor. This implies that tax rate heterogeneity exacerbates the distortionary effects of other frictions in the economy.
    Keywords: business taxation; aggregate productivity; TFP; misallocation
    JEL: D24 H25 O47
    Date: 2023–12–19
  6. By: International Monetary Fund
    Abstract: Four years into the ongoing economic crisis, a concern exists that operations in Lebanon’s tax and customs administrations could collapse. This report describes the challenges faced, encourages that immediate interventions be made, identifies structural mechanisms to finance reforms, and provides guidance on reform and capacity development priorities for the next 36 months.
    Keywords: Tax Administration; Customs Administration; Reform; Modernization; Information Technology
    Date: 2023–12–05
  7. By: Vybhavi Balasundharam; Arika Kayastha; Mr. Marcos Poplawski Ribeiro
    Abstract: his paper presents a new global dataset on current practices for four budget items in terms of indexation to the price level and other nominal variables. Compiling data from documents of select multilateral organizations, governments, and related literature as well as conducting a survey among IMF country desks of 190 country-members, we show how indexation is internationally applied in (i) personal income tax brackets; (ii) pensions; (iii) social assistance programs; and (iv) public wages. The dataset shows that while indexation policies vary significantly across economies, some trends can be identified. For example, indexation is more common on pension and social grants than on taxes, and falls with the degree of economic development. We further discuss some applications of this new dataset. Those include an accounting exercise illustrating the impacts of indexation on fiscal outcomes during episodes of inflation surprises; and an analysis of the association between the overall degree of indexation combining the four budget items and inflation persistence.
    Keywords: Indexation; Inflation; Fiscal Policy; Fiscal Insititutions
    Date: 2023–12–22
  8. By: Aronsson, Thomas (Department of Economics, Umeå University); Xu, Fei (Department of Economics, Umeå University)
    Abstract: This paper is the first to integrate corruption with respect to tax collection in a Mirrleesian model of optimal redistributive taxation. The analysis starts with a simple two-type model, showing that the optimal marginal tax structure resembles that of the original Stiglitz (1982) model, albeit for different reasons. We also extend the analysis to a framework with many types and present policy rules for marginal taxation over the whole ability distribution. The marginal income tax rates are all non-negative and can be expressed in terms of two key determinants: the distributional weights attached to taxpayers, and how the private cost to evade taxes varies with the taxpayers’ income. Finally, we consider the role of government expenditures directly targeting the incentives of the tax collector, such that these public expenditures and the optimal tax structure are implemented simultaneously.
    Keywords: Redistribution; taxation; corruption
    JEL: D73 H21 H26
    Date: 2023–12–18
  9. By: Eric Gao; Daniel Luo
    Abstract: How does receiver commitment affect incentives for information revelation in Bayesian persuasion? We study many-sender persuasion games where a single receiver commits to a posterior-dependent action profile, or allocation, before senders design the informational environment. We develop a novel revelation-like principle for ex-ante mechanism design settings where sender reports are Blackwell experiments and use it to characterize the set of implementable allocations in our model. We show global incentive constraints are pinned down by ``worst-case'' punishments at finitely many posterior beliefs, whose values are independent of the allocation. Moreover, the receiver will generically benefit from the ability to randomize over deterministic outcomes when solving for the constrained optimal allocation, in contrast to standard mechanism design models. Finally, we apply our results to analyze efficiency in multi-good allocation problems, full surplus extraction in auctions with allocation externalities, and optimal audit design, highlighting the role that monotone mechanisms play in these settings.
    Date: 2023–12

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