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on Accounting and Auditing |
| By: | Alejandro Esteller-Moré; José María Durán-Cabré; Christos Kotsogiannis; Luca Salvadori |
| Abstract: | Enforcing wealth tax compliance among high-net-worth individuals is particularly challenging. Using administrative data on the Net Wealth Tax for Catalan taxpayers over the 2011–2020 period, this paper evaluates the impact of audits on voluntary compliance. The evidence suggests that wealth tax audits do enhance compliance, but the impact is short-lived — and driven by taxpayers rebalancing their tax evasion and avoidance responses. On the institutional side, the results indicate that Spain's overlapping tax audit mandates can create coordination frictions that reduce the efficiency and effectiveness of audit-based enforcement of the New Wealth Tax. Effective enforcement depends not only on robust audit strategies, but also on coherent institutional design and sound tax policy. |
| Keywords: | overlapping tax audit mandates, tax audit evaluation, tax compliance, Tax evasion, wealth tax |
| JEL: | H26 D31 O17 D02 |
| Date: | 2025–10 |
| URL: | https://d.repec.org/n?u=RePEc:bge:wpaper:1527 |
| By: | Chen, Xuyang; Sun, Rui |
| Abstract: | This paper investigates how the OECD's global minimum tax (GMT) affects multinational enterprises (MNEs) behavior and countries' corporate taxes. We consider both profit shifting and capital investment responses of the MNE in a formal model of tax competition between asymmetric countries. The GMT reduces the true tax rate differential and benefits the large country, while the revenue effect is generally ambiguous for the small country. In the short run where tax rates are fixed, due to tax deduction of the substance-based income exclusion (SBIE), a higher minimum rate exerts investment incentives but also incurs a larger revenue loss for the small country. We show that under high (low) profit shifting costs the former (latter) effect dominates so that the small country's revenue increases (decreases). In the long run where countries can adjust tax rates, the GMT reshapes the tax game and the competition pattern. In contrast to the existing literature, we reveal that the minimum rate binds the small country only if it is low. With the rise of the GMT rate, countries will undercut the minimum to boost real investments and collect top-up taxes. Our simulations show that introducing a GMT with moderate minimum rate raises both countries' revenues and the large country's welfare. However, it may reduce the small country's welfare if the welfare weight of private income is high. |
| Keywords: | Corporate taxes, Global minimum tax, Profit shifting, SBIE, Tax competition |
| JEL: | F21 F23 H25 H73 H87 |
| Date: | 2025–09–26 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:126538 |
| By: | Bray, Sean; Bunn, Daniel; Gaul, Johannes; Spengel, Christoph |
| Abstract: | This study examines the compliance costs of OECD Pillar Two, i.e., the "Global Minimum Tax, " for multinational enterprises headquartered in the European Union. Collecting data from chief financial officers and heads of finance or tax departments, we estimate compliance cost determinants and subsequently predict the overall compliance burden. Results indicate total one-off costs of about EUR 1.2 billion (up to EUR 2.0 billion) and total recurring costs of EUR 517 million EUR p.a. (up to EUR 865 million EUR p.a.). Our findings inform the public discourse by mitigating information asymmetries between policymakers and corporations. Moreover, we contribute by establishing a cost benchmark to facilitate a systematic cost-benefit evaluation of this policy. |
| Keywords: | Global Minimum Tax, Corporate Taxation, Tax Compliance Costs, Tax Complexity, Council Directive (EU) 2022/2523 |
| JEL: | H25 H32 H87 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:zewdip:330317 |
| By: | Sarah Clifford; Jakob Miethe; Camille Semelet |
| Abstract: | Key MessagesTax haven subsidiaries are instrumental in multinational profit shiftingProfit shifting is concentrated in firms exceeding the EUR 750 million revenue threshold of the recently introduced global minimum tax (GMT)The GMT captures 95 percent of shifted profits from German multinationalsGMT compliance costs are modest compared to the revenues raised by large multinational firmsPursuing a consistent policy remains preferable even in light of the recent US exemption |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ces:econpb:_78 |
| By: | Fadzayi Chingwere; Aimable Nsabimana; Kunal Sen |
| Abstract: | How does political alignment with the ruling party influence the audit outcomes of the firms? This paper investigates whether political alignment with the ruling party influences the intensity and outcomes of firm audits in South Africa. Using a regression discontinuity design based on close provincial election results from 2014, we examine how firms are treated in municipalities narrowly won versus narrowly lost by the African National Congress (ANC). |
| Keywords: | Elections, Audits, Firms, Tax evasion, South Africa |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:unu:wpaper:wp-2025-75 |
| By: | UGAI, Hiroshi; OSADA, Takeshi |
| Abstract: | This study empirically examines liquidity dependence in the Japanese banking system. Acharya and Rajan (2024) and Acharya et al. (2024) pointed out the phenomenon of liquidity dependence, which was observed during the U.S. quantitative easing and tightening policies and is regarded as a possible factor in liquidity crises in September 2019 and March 2023 crises in the U.S. Since quantitative easing was introduced in March 2001, the Japanese economy has experienced a more than 20-year period of quantitative easing, longer than that encountered in the U.S. Our macro and micro analysis employs more than 20 years of macroeconomic and bank-level accounting data and reveals that the same liquidity dependence phenomenon is observed in the Japanese economy. The Japanese broad deposit insurance system is superior to that in the United States, so an incident like the Silicon Valley Bank bankruptcy is unlikely to occur in Japan. However, partly with the rise of digital banking, we suggest that the Japanese economy needs to prepare for the impending major quantitative tightening—the so-called exit from the long-term quantitative easing policy. |
| Keywords: | Bank of Japan, quantitative easing, quantitative tightening, deposits, financial fragility, monetary policy |
| JEL: | G01 G2 E5 |
| Date: | 2025–09–01 |
| URL: | https://d.repec.org/n?u=RePEc:hit:hiasdp:hias-e-147 |