Investigating the impact of country-by-country reporting on effective tax rates: Exploratory evidence from listed South African multinational groups

2021 ◽  
pp. 1-12
Author(s):  
Cara Thiart
Keyword(s):  
South African ◽  
Tax Rates ◽  
Effective Tax Rates ◽  
The Impact

Determinants of corporate effective tax rates: evidence from the euro area

2020 ◽  
Vol 33 (3/4) ◽  
pp. 427-444
Author(s):  
Antonio Barbera ◽  
Paloma Merello ◽  
Rafael Molina
Keyword(s):  
Euro Area ◽  
Listed Companies ◽  
Tax Rates ◽  
Effective Tax Rates ◽  
Content Type ◽  
Individual Analysis ◽  
The Individual ◽  
The Impact ◽  
Generalized Moments ◽  
Positive Effect

PurposeThe purpose of this paper is to investigate the effect of the determinants of corporate effective tax rates (ETR) of listed companies in euro area.Design/methodology/approachWith a large and recent panel of 2,870 listed companies for the period 2005–2016, the authors use the generalized moments method (GMM) to estimate global models for three groups of countries and specific models for six selected countries: Germany, Spain, France, Italy, Belgium and Greece.FindingsThe results confirm that ETR have different determinants depending on the countries analyzed. There is a significantly positive relationship with leverage and negative with size and financial profitability. However, economic profitability shows a statistically positive effect in the new members, but negative effect on old ones. In the individual analysis, Germany and Spain maintain this negative association with return on assets (ROA), but Belgium and Greece show a positive effect. The effect of the economic cycle shows statistically relevant, negatively in Germany but positively in Belgium and Greece.Originality/valueThis paper makes a novel contribution to the current debate on the need for harmonization of corporate income tax in the European Union (EU). For the first time, the group of countries whose common currency is the euro is considered with a great level of detail. In addition, the impact derived from the enlargement of the euro area and the individual analysis of the main countries is included. The European authorities must take into account the specific differences found in the ETR determinants because it hinders to take measures that limit tax competition.

The Impact of Headquarter and Subsidiary Locations on Multinationals’ Effective Tax Rates

2014 ◽  
Vol 28 (1) ◽  
pp. 33-62 ◽  
Author(s):  
Kevin S. Markle ◽  
Douglas A. Shackelford
Keyword(s):  
Tax Rates ◽  
Effective Tax Rates ◽  
The Impact

scholarly journals Debt Overhang, Gazelles’ Growth, and Fiscal Policy: A Note from the Quantile Regression Approach

2021 ◽  
Vol 13 (18) ◽  
pp. 10457
Author(s):  
Sorin Gabriel Anton ◽  
Mihaela Onofrei ◽  
Emilia Gogu ◽  
Bogdan Constantin Neculau ◽  
Florin Mihai
Keyword(s):  
Fiscal Policy ◽  
Quantile Regression ◽  
Firm Growth ◽  
Tax Rates ◽  
Lower Growth ◽  
Effective Tax Rates ◽  
Debt Overhang ◽  
Regression Approach ◽  
Negative Effect ◽  
The Impact

The paper aims to examine the relationship between leverage and firm growth and the impact of fiscal policy on this relationship using a panel data quantile regression approach. Employing a sample of gazelles from emerging Europe for the 2006–2014 period, we find that debt overhang negatively affects firm growth only for the lower growth quantiles. In addition, we found that the negative effect is higher for the gazelles located in countries with lower corporate income effective tax rates. However, for the higher growth quantiles, the impact of debt on firm growth is positive and statistically significant. Our results reconcile the mixed results of the previous studies and have practical implications for financing strategies in emerging markets.

The Determinants and Consequences of Tax Audits: Some Evidence from China

2018 ◽  
Vol 41 (1) ◽  
pp. 91-122 ◽  
Author(s):  
Wanfu Li ◽  
Jeffrey A. Pittman ◽  
Zi-Tian Wang
Keyword(s):  
Financial Reporting ◽  
Discretionary Accruals ◽  
Tax Rates ◽  
Effective Tax Rate ◽  
Difference In Differences ◽  
Effective Tax Rates ◽  
Tax Rate ◽  
Using Data ◽  
Tax Reporting ◽  
The Impact

ABSTRACT Using data obtained from a local tax office in China, we examine the determinants of corporate tax audits and the consequences of those audits. We find that the tax authority is more likely to select a firm for an audit when the firm has a lower effective tax rate, a higher book-tax difference, and more income-decreasing discretionary accruals. Applying a difference-in-differences research design, we find that after firms have been audited, they significantly increase their effective tax rates, reduce their book-tax differences, and reduce their income-decreasing discretionary accruals. Our study provides important insights on the determinants of the tax authority's decision on whether to initiate an audit and the impact of tax audits on both tax reporting and financial reporting. JEL Classifications: H26; L51; M41.

scholarly journals THE COST OF DIRECT TAXATION ON INVESTMENT IN BRAZIL

2017 ◽  
Vol 21 (1) ◽  
Author(s):  
Nelson Leitão Paes
Keyword(s):  
Tax Rates ◽  
Marginal Tax Rate ◽  
Effective Tax Rates ◽  
Tax Rate ◽  
Direct Taxation ◽  
Economic Profit ◽  
The Rich ◽  
The Cost ◽  
Rich Countries ◽  
The Impact

ABSTRACT This paper analyzed the impact of taxation on the investment in Brazil, focusing on the taxation of corporate income. Following the literature, it was used an economic model to calculate two indicators of effective tax rates - Effective Marginal Tax Rate (EMTR) and Effective Average Tax Rate (EATR). The EMTR measures the increase of the cost of capital due to corporate income tax. The EATR represents a measure of the average tax rate levied on an investment that has a pre-defined economic profit. The results suggest Brazil may face some difficulties to attract foreign investment. The country presents high rates for EATR and EMTR, higher than the average of the rich countries and well above the figures of development countries like Chile, Mexico, South Africa, Russia and China, potential competitors in attracting investments.

The impact of tax policy uncertainty on forecasting

2021 ◽  
Author(s):  
Jennifer L. Brown ◽  
K.C. Lin ◽  
Jared Moore ◽  
Laura A. Wellman
Keyword(s):  
Tax Policy ◽  
Policy Uncertainty ◽  
Tax Rates ◽  
Firm Level ◽  
Effective Tax Rates ◽  
Market Participants ◽  
Regulatory Processes ◽  
Definition Of ◽  
The Impact ◽  
Real Costs

This study examines the impact of tax policy uncertainty (TPU) on analysts' forecasts and managers' interim estimates of effective tax rates (ETRs). We adopt a broad definition of TPU that encompasses both the legislative and regulatory processes and perform tests to validate a news-based measure of TPU consistent with our definition. We document that 1) analysts' implied ETR forecasts are less accurate and more disperse during periods of high TPU, 2) managers' ETR estimates are less accurate during periods of high TPU, and 3) the presence of relatively inaccurate management ETR estimates strengthens the effects of TPU on analysts' ETR forecasts. We further find that firm-level tax-related complexity exacerbates the effects of TPU on analysts' and managers' ETR predictions. Overall, our results are consistent with uncertainty surrounding tax policy impairing analysts' and managers' ability to assess and predict future tax-related fundamentals, thus imposing real costs on managers and market participants.

Accounting for Tax Benefits of Employee Stock Options and Implications for Research

2002 ◽  
Vol 16 (1) ◽  
pp. 1-16 ◽  
Author(s):  
Michelle Hanlon ◽  
Terry Shevlin
Keyword(s):  
Income Tax ◽  
Stock Options ◽  
Employee Stock Options ◽  
Tax Rates ◽  
Effective Tax Rates ◽  
Marginal Tax Rates ◽  
Tax Benefits ◽  
The Impact ◽  
Tax Expense ◽  
Reported Income

This paper examines how firms account for and report the tax benefits of employee stock options (ESOs). The tax benefits of ESOs reduce taxes actually owed but enter stockholders' equity directly without reducing reported income tax expense. Failing to adjust reported income tax expense for this benefit can lead to poorly specified studies with the distinct possibility of considerable measurement error and flawed inferences. We explain the adjustments needed for more reliable estimates of effective tax rates, tax burdens, and marginal tax rates often critical to analyses of firm-specific and public policy issues. We document problems with firms' disclosures and, using a sample of large NASDAQ firms likely to be heavy users of ESOs, find that adjusting for the ESO tax benefit is essential to understanding the impact of taxes on those firms.

Partisanship, Tax Policy, and Corporate Profit-Shifting in a Globalized World Economy

2017 ◽  
Vol 50 (14) ◽  
pp. 1998-2026 ◽  
Author(s):  
Mi Jeong Shin
Keyword(s):  
Tax Policy ◽  
Multinational Firms ◽  
Transfer Pricing ◽  
Tax Rates ◽  
Growth Data ◽  
Profit Shifting ◽  
Effective Tax Rates ◽  
The Difference ◽  
Globalized World ◽  
The Impact

Political science scholarship has found mixed evidence on the impact of partisanship on the taxation of firms. In this article, I show that although left-leaning governments set tax rates at higher levels than right-leaning governments, the difference in the effective tax rates paid by firms is much less dramatic between left and right governments. I argue that left-leaning governments maintain high tax rates, a visible policy their constituency supports, while allowing firms to transfer profits abroad to minimize their tax burden (transfer pricing). Constituency costs hinder them from cutting tax rates to avoid backlash from voters, but they impose fewer restrictions on profit-shifting to attract investment by multinational firms for economic growth. Data covering 19 advanced economies between 2006 and 2009 support my theoretical expectation. My analyses suggest that the effect of government partisanship on corporate tax policy can be ambiguous when political parties consider various policy tools.

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