scholarly journals The detection of earnings management through a decrease of corporate income tax

2021 ◽  
Vol 7 (1) ◽  
Author(s):  
Kawa Wali
Keyword(s):  
The Netherlands ◽  
Earnings Management ◽  
Income Tax ◽  
Tax Compliance ◽  
Financial Statements ◽  
Income Taxes ◽  
Corporate Income Tax ◽  
Tax Savings ◽  
Tax Payments ◽  
The Impact

AbstractThis paper explores the manner in which Dutch and German listed companies were able to manage earnings by the decline in corporate income tax toward the end of the 2000s. In addition, a recent article examines the existing state of earnings management at a European level in the Netherlands and Germany. This empirical study sampled 1350 firm-years for the Netherlands and 1850 firm-years for Germany between 2000 and 2018. The study indicated that those firms with larger prospect tax savings appeared to exercise earnings management to hasten discretionary accruals. In view of the income-reducing impact these discretionary deductions have on financial statements, the findings show corporate income taxes are a significant incentive. Since companies can reduce tax costs by deferring income tax to a subsequent year and lower the tax tariff cycle, theoretically, this tax reform incentivizes management to manage their earnings with the purpose of minimize tax payments. More research is needed into the impact of tax compliance on declining earnings management in this area.

scholarly journals The essence of temporary differences under the conditions of changes in RSA 18/02 and convergence with IAS 12 “Income taxes” and their impact on the financial statements

2020 ◽  
Vol 9 (26) ◽  
pp. 415-422
Author(s):  
Liudmila B. Trofimova ◽  
Natalia A. Prodanova ◽  
Sara A. Nudel ◽  
Vadim A. Dikikh ◽  
Natalia V. Savina
Keyword(s):  
Income Tax ◽  
Financial Statements ◽  
Income Taxes ◽  
Corporate Income Tax ◽  
Consolidated Financial Statements ◽  
Deferred Taxes ◽  
Net Profit ◽  
The Russian Federation ◽  
Ministry Of Finance ◽  
Tax Payments

The article examines the latest changes in RSA 18/02 "Accounting for corporate income tax payments", adopted by order of the Ministry of Finance of the Russian Federation. The new version of the Regulation comes into effect since January 01, 2020. As a result of the study, the authors revealed a convergence of Russian standards for determining temporary differences and deferred taxes, and at the same time indicated differences that still remained, and also assessed the existing differences. The authors considered it appropriate to systematize new principles for calculating deferred income taxes. For clarity, the definitions of current tax, net profit and other concepts, calculations of current tax and income tax expenses are presented in the form of formulas that can be easily compared with a previously existing methodology. The results of the study can be used when transforming financial statements, as well as in the construction of the consolidated financial statements generated in Russia in accordance with the requirements of IFRS, since the latest amendments in RSA 18/02 include the calculation of income tax for members of a consolidated group of taxpayers.

The Impact of Corporate Income Tax on Gross Domestic Product - The Case of the Republic of Serbia

2020 ◽  
Vol 58 (3) ◽  
pp. 311-326
Author(s):  
Jadranka Đurović Todorović ◽  
Marina Đorđević ◽  
Marko Krstić
Keyword(s):  
Gross Domestic Product ◽  
Income Tax ◽  
Quantitative Research ◽  
Income Taxes ◽  
Corporate Income Tax ◽  
Domestic Product ◽  
Negative Effect ◽  
The Republic ◽  
The Impact ◽  
Positive Effect

Abstract The importance of certain tax forms for the economy of any country is confirmed by the fact that they can be used to impact on the achievement of fiscal aims as they play a significant role when it comes to their share in a total amount of public revenue of certain countries. Another important characteristic of taxes is that they can affect the trends of gross domestic product (GDP) as one of the most important economic indicators of achieved development of a national economy. It is for this reason that we must point out that the authors will pay special attention to determining the impact that corporate income tax has on trends of gross domestic product in the Republic of Serbia and their interdependency. This will provide an answer to a question whether corporate income taxes have a positive effect on gross domestic product trends and what is its relation with this indicator. On the basis of quantitative research, through the application of regression analysis, the authors will confirm or refute the hypothesis concerning this problem. Finally, we will reach a conclusion which will offer answers to questions related to the impact of this tax type tax on the gross domestic product trends, the extent of the impact and its nature – whether it has a positive or a negative effect on gross domestic product trends in the Republic of Serbia

scholarly journals The Impact of Working Capital, Return on Assets and Return on Equity on Corporate Income Tax

2019 ◽  
Vol 2 (2) ◽  
Author(s):  
Nikke Yusnita Mahardini
Keyword(s):  
Income Tax ◽  
Stock Exchange ◽  
Financial Statements ◽  
Total Sample ◽  
Corporate Income Tax ◽  
Working Capital ◽  
Return On Assets ◽  
Return On Equity ◽  
The Impact ◽  
Capital Return

This study aims to examine the effect of working capital, return on assets, and return on equity on corporate income tax. The population of this study is mining companies and the total sample was involved is thirty-six companies. The data used in the study is in the form of financial statements obtained from the Indonesia Stock Exchange (IDX). The data analysis method used in this study is the multiple regression analysis. Results of the study indicate that working capital significantly influences corporate income tax. Meanwhile, Return on Asset and Return on Equity are not significant to explain the variance of corporate income tax. Simultaneously, working capital, Return on Assets and Return on Equity  as a function of corporate income tax were found significant

scholarly journals The Impact of Corporate Income Tax on Capital Structure: Evidence from Serbian Food Industry

2021 ◽  
Author(s):  
Teodora Tica
Keyword(s):  
Capital Structure ◽  
Income Tax ◽  
Food Industry ◽  
Research Question ◽  
Corporate Income Tax ◽  
Financial Reports ◽  
The Republic ◽  
Tax Savings ◽  
Additional Support ◽  
The Impact

Research Question: The aim of this paper is to present the effect of corporate income tax on capital structure in the food industry of the Republic of Serbia. Motivation: Based on the empirical results of Moradi & Paulet (2018) and Kuc & Kalicanin (2021), the author's aim of the research conducted in this paper is to analyse the impact of corporate income tax on the capital structure in the Republic of Serbia as a developing country with an underdeveloped capital market and to support the results of this sporadically researched area of corporate finance in the Republic of Serbia. Idea: The author believes that by determining the optimal capital structure, it could be possible to reduce the burden of corporate income tax. Given that the food industry is one of the most significant and profitable industries in the Republic of Serbia, the results of this theoretical and empirical research would be of a great benefit to the local Tax Authority and to large taxpayers. Data: The research was conducted on a sample of 250 most active companies that operated within the food industry of the Republic of Serbia in the period from 2017 to 2019. The source of data for the purposes of this research are the official financial reports of companies registered with the Serbian Business Registers Agency. Tools: Elemental descriptive statistics techniques and panel regression analysis were applied throughout the data analysis. For the purpose of data processing the author used STATA statistical software. Findings: The results confirmed the existence of a negative and statistically significant relationship between tax savings based on depreciation costs and profitability on the one hand, and capital structure, on the other. Thus, the results indicate the need of profitable companies to use high depreciation costs to provide a reduced burden of corporate income tax with a capital structure shifted to accumulated own financial resources. In addition, the results of the regression model showed the absence of a statistically significant effect of tax savings based on interest costs on capital structure. Contribution: The contribution of this paper is reflected in additional support to existing discussions on impact of corporate income taxes on capital structure. Further, the paper contributes to business practice by determining how corporate income tax burden could be reduced by choosing optimal financial mix.

scholarly journals ASSESSMENT OF FAVOURABLENESS FOR THE TAX SYSTEM OF UKRAINE IN THE INTERNATIONAL CONTEXT

2019 ◽  
Vol 5 (2) ◽  
pp. 124 ◽  
Author(s):  
Valentyna Martynenko
Keyword(s):  
Income Tax ◽  
Corporate Income Tax ◽  
Tax Administration ◽  
Tax Rates ◽  
Tax System ◽  
Tax Rate ◽  
The Government ◽  
Tax Payments ◽  
The Impact ◽  
Average Index

The purpose of the article is to study the background and key factors that ensured an increase in the ranking of the Ukrainian tax system favourableness from the 174th position to the 43-d position during 2005–2016 – the greatest progress in the whole history of the “Paying Taxes” ranking. Methodology. The research was made on the basis of the countries ranking method according to the tax system favourableness, conducted by the World Bank together with the consulting firm PricewaterhouseCoopers for the implementation of the annual “Paying Taxes” ranking. The ranking is based on the analysis of: taxes and mandatory deductions that a typical medium-sized enterprise must pay in the concerned year; the administrative burden connected with the payment of taxes and deductions; processes after filing and paying taxes. Another method used in the article is the regression analysis of the impact of the unified social tax rate, the corporate income tax rate, the personal income tax rate, the volume of tax revenues, consolidated budget revenues and gross domestic product (GDP) in actual prices on the ranking position of Ukraine in the “Paying Taxes”. Results. In course of the study, it was found that the increase of the ranking of Ukraine from the 174th to the 43-d position in the “Paying Taxes” during 2005–2016 became possible due to the liberalization of taxation for 2013–2017, in particular, the reduction of the corporate income tax rate by 7% and the unified social tax rate by 10%. Other factors are as such: improving the tax administration quality: reducing the time for registration, filing and tax payment from 2185 hours in 2005 to 328 hours in 2016, with the worldwide average index of 240 hours per year; reducing the number of tax payments from 98 in 2005 to 5 (the worldwide average index is 24 payments) in 2016. Practical implications. The result of the effective tax policy of the Government of Ukraine was the reduction of the total tax burden on business from 60.3% in 2005 to 37.8% in 2016 at the worldwide average index of 40.5% at the end of the investigated period. Also, during 2005–2016, the consolidated budget revenues grew from 131.3 to 782.7 billion UAH, including tax ones – from 100.7 to 650.8 billion UAH. Value/originality. Based on the results of the study, the author substantiated that the main factor of the significant progress of the tax system of Ukraine in the “Paying Taxes” ranking (from the 174th to the 43-d position during 2005–2016) was the liberalization of taxation by reducing the tax rates of corporate income tax and a unified social tax, as well as improving the quality and efficiency of tax administration.

A STUDY OF THE IMPACT OF SPECIAL INTEREST GROUPS ON MAJOR TAX REFORM: AGRICULTURE AND THE 1913 INCOME TAX LAW

2008 ◽  
Vol 35 (2) ◽  
pp. 71-100 ◽  
Author(s):  
Douglas K. Barney ◽  
Tonya K. Flesher
Keyword(s):  
Quantitative Analysis ◽  
Income Tax ◽  
Income Taxes ◽  
Tax Law ◽  
Special Interest Groups ◽  
Congressional Debates ◽  
Farm Population ◽  
Income Tax Law ◽  
State Income ◽  
The Impact

Farmers have benefited from unique tax treatment since the beginning of the income tax law. This paper explores agricultural influences on the passage of the income tax in 1913, using both qualitative and quantitative analysis. The results show that agricultural interests were influential in the development and passage of tax/tariff laws. The percentage of congressmen with agricultural ties explains the strong affection for agriculture. Discussion in congressional debates and in agricultural journals was passionate and patriotic in support of equity for farmers. The quantitative analysis reveals that the percentage farm population was a significant predictor of passage of the 16th Amendment by the states and of adoption of state income taxes in the 20th century.

scholarly journals Measuring the Effects of Corporate Tax Cuts

2018 ◽  
Vol 32 (4) ◽  
pp. 97-120 ◽  
Author(s):  
Alan J. Auerbach
Keyword(s):  
Multinational Corporations ◽  
Income Tax ◽  
Capital Investment ◽  
Corporate Income Tax ◽  
Tax Law ◽  
Corporate Tax ◽  
The Law ◽  
Jobs Act ◽  
The Impact ◽  
Tax Cuts

On December 22, 2017, President Donald Trump signed the Tax Cuts and Jobs Act (TCJA), the most sweeping revision of US tax law since the Tax Reform Act of 1986. The law introduced many significant changes. However, perhaps none was as important as the changes in the treatment of traditional “C” corporations—those corporations subject to a separate corporate income tax. Beginning in 2018, the federal corporate tax rate fell from 35 percent to 21 percent, some investment qualified for immediate deduction as an expense, and multinational corporations faced a substantially modified treatment of their activities. This paper seeks to evaluate the impact of the Tax Cuts and Jobs Act to understand its effects on resource allocation and distribution. It compares US corporate tax rates to other countries before the 2017 tax law, and describes ways in which the US corporate sector has evolved that are especially relevant to tax policy. The discussion then turns the main changes of the Tax Cuts and Jobs Act of 2017 for the corporate income tax. A range of estimates suggests that the law is likely to contribute to increased US capital investment and, through that, an increase in US wages. The magnitude of these increases is extremely difficult to predict. Indeed, the public debate about the benefits of the new corporate tax provisions enacted (and the alternatives not adopted) has highlighted the limitations of standard approaches in distributional analysis to assigning corporate tax burdens.

scholarly journals Effect of Corporate Tax on Government Expenditure in Nigeria

2021 ◽  
Vol 1 (5) ◽  
pp. 157-171
Author(s):  
Patrick Ologbenla
Keyword(s):  
Income Tax ◽  
Consumer Price Index ◽  
Government Expenditure ◽  
Value Added ◽  
Corporate Income Tax ◽  
Value Added Tax ◽  
Independent Variable ◽  
The Government ◽  
The Impact ◽  
Bound Test

The study investigated the impact of corporate income tax on the government expenditure in Nigeria. Data on corporate income tax, value added tax, interest rate, gross domestic product, petroleum profit tax and consumer price index were collected and used as independent variable in the study while data on public expenditure were collected and used as independent variable in the estimated model. The ARDL bound test was applied and the result showed that corporate income tax have long run relationship that is significant with government expenditure. Other forms of tax such as value added tax and petroleum profit tax also have significant impact on government expenditure. The study concluded that corporate income tax should be sustained in order to ensure that government continue to fulfill her obligation of provision of social amenities that will promote the economic growth of the country.

Analisis Ekualisasi SPT Masa PPN Dengan SPT PPh Badan Terhadap Kewajiban Perpajakan PT. Adiyana Teknik Mandiri

2018 ◽  
Vol 6 (3) ◽  
pp. 117-122
Author(s):  
Irham Firdauza Pratama ◽  
Hadi Sutomo
Keyword(s):  
Income Tax ◽  
Value Added ◽  
Preventive Measure ◽  
Income Taxes ◽  
Financial Statement ◽  
Corporate Income Tax ◽  
Applicable Law ◽  
Tax Returns ◽  
Tax Audit ◽  
The Difference

Many cases are related to corrections caused by the occurrence of VAT and Income Tax equalization. The difference in reporting the circulation of business on the VAT SPT with the Corporate Income Tax Return is the object of the tax authorities' examination. Basically, equalization is not to find the same number of circulation businesses but to find the cause of the difference between the VAT Period of Income Tax and the Corporate Income Tax Return. These differences are often due to differences in provisions between Income Taxes and Value Added Taxes, such as tax objects, exchange rates, and so on. The purpose of this study was to find out how to report the circulation of business between the VAT Period of VAT and Corporate Income Tax Returns of PT. AdiyanaTeknikMandiri. To find out the process and analysis of equalization between VAT Period of VAT and Corporate Income Tax Returns at PT. AdiyanaTeknikMandiri. To find out the equalization benefits of the VAT Period SPT with Corporate Income Tax Returns for companies. This study uses a comparative descriptive method with qualitative and quantitative data, namely by analyzing and processing financial statement data and existing fiscal reports, then comparing the circulation of business to the results of calculations according to the VAT Period of VAT and Corporate Income Tax Returns, then processed further to provide an explanation of the difference in business circulation generated. The results of this study indicate that PT. AdiyanaTeknikMandiri that the company in reporting the circulation of its business has not been reported as it should, it is known after equalizing it is known that there is a number of business circulation that has not been reported in the VAT Period SPT report so that it causes a difference in the amount of business circulation between the VAT Period of Income Tax and the Corporate Income Tax Return. Equalization process is carried out by comparing the VAT Period report with the Corporate Income Tax Return, collecting data on business circulation in the ledger, comparing the data obtained, then analyzing the factors that cause the different reporting of business circulation. Equalization benefits for the company, which can be a preventive measure to face a tax audit by the tax authorities, so that the company can explain in accordance with the conditions that occur, equalization can also be a benchmark of compliance and increase the accuracy of taxpayers in reporting the amount of tax obligations in accordance with the applicable law .   Keywords: tax equalization, business circulation, corporate income tax return

scholarly journals The Impact of Federal and State Income Tax Liabilities on Timber Investments in the Midwest and Northeast

2007 ◽  
Vol 24 (4) ◽  
pp. 245-251 ◽  
Author(s):  
Nathan R. Smith ◽  
Philip Bailey ◽  
Harry Haney ◽  
Debra Salbador ◽  
John Greene
Keyword(s):  
Income Tax ◽  
Tax Planning ◽  
Income Taxes ◽  
Forest Landowners ◽  
Middle Income ◽  
State Tax ◽  
State Income Tax ◽  
State Income ◽  
Lower Peninsula ◽  
The Impact

Abstract Federal and state income taxes are calculated for hypothetical forest landowners in two income brackets across 23 states in the Midwest and Northeast to illustrate the effects of differential state tax treatment. The income tax liability is calculated in a year in which the timber owners harvest $200,000 worth of timber. State income taxes ranged from highs of $13,427 for middle-income landowners and $18,527 for high-income landowners in Maine to no tax burden in New Hampshire and South Dakota. Calculated state and federal income taxes are based on 2004 tax regulations and rates. After-tax land expectation values calculated for a forest landowner in the Northern Lower Peninsula of Michigan illustrate the importance of tax planning on returns to a timber investment. The results support the need for adequate tax accounting.

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