scholarly journals The Influence of Corporate Income Taxes on Investment Location: Evidence from Corporate Headquarters Relocations

2021 ◽  
Author(s):  
Travis Chow ◽  
Sterling Huang ◽  
Kenneth J. Klassen ◽  
Jeffrey Ng
Keyword(s):  
Income Tax ◽  
Strong Support ◽  
The State ◽  
Economic Consequences ◽  
Corporate Income Tax ◽  
Tax Rates ◽  
Tax Rate ◽  
Percentage Point Increase ◽  
Point Increase ◽  
State Income

This study examines the effects of jurisdictions’ corporate taxes and other policies on firms’ headquarters (HQ) location decisions. Using changes in state corporate income tax rates across time and states as the setting, we find that a one-percentage-point increase in the HQ state corporate income tax rate increases the likelihood of firms relocating their HQ out of the state by 16.8%, and an equivalent decrease in the HQ state rate decreases the likelihood of HQ relocations by 9.1%. Exploiting the unique tax policy features within the state apportionment system lends strong support to the interpretation that taxation drives this effect. Our analyses also demonstrate that state income tax features affect the destination of the HQ move. We contribute to the literature on corporate decision making by showing how state income taxation affects a real corporate decision that has significant economic consequences for the company and the state. This paper was accepted by Brian Bushee, accounting.

THE COMPARISON OF CORPORATE INCOME TAX IN LATVIA AND LITHUANIA

2017 ◽  
pp. 20
Author(s):  
Jūlija Ščeglova ◽  
Iveta Mietule
Keyword(s):  
Income Tax ◽  
The State ◽  
Corporate Income Tax ◽  
Tax Rates ◽  
State Budget ◽  
Tax Base ◽  
Tax Rate ◽  
Common Features ◽  
Advance Payment ◽  
Tax Payers

Corporate income tax is one of the important taxes that provide revenues to the state budget. Article contains a comparison between Latvian and Lithuanian existing legislation relating to corporate income tax, studied differences between the tax rates, tax base, tax period and taxpayers. Were described differences that are related to the advance payment calculation, as well as created an example that shows how advance payments are calculated in Latvian and Lithuanian companies. As a result, it was found that there are several common features in the Latvian and Lithuanian legislation, with regard to corporate income tax, for example, the tax payers, taxation period, tax rate, the taxable amount. But there are several differences, such as the nuances of rates for non-residents, depending on the type of revenue, advance payment deadlines and other particularities of the calculation of the advance payments. Also differ corporate income tax payment deadlines. It was concluded that making advance payments in Lithuanian enterprises is more profitable, because it was calculated that at the same conditions, the amount of advances in Lithuania is lower than in Latvia.

scholarly journals MENGUAK EFEK PENURUNAN TARIF PAJAK PENGHASILAN DI MASA PANDEMI COVID-19

2021 ◽  
Vol 14 (2) ◽  
pp. 171-183
Author(s):  
Alfi Bryan Garin Susanto
Keyword(s):  
Income Tax ◽  
Balance Sheet ◽  
The State ◽  
Corporate Income Tax ◽  
Tax Rates ◽  
Total Income ◽  
Tax Rate ◽  
Income Statement ◽  
Deferred Tax ◽  
Tax Expense

This article explains the effect of lowering income tax rates during the COVID-19 pandemic. The government's role in maintaining economic stability is carried out by issuing fiscal policies, in terms of taxation, namely by reducing the Corporate Income Tax rate. This research intends to find out the results of a decrease in corporate income tax rates affecting a decrease in current taxes deposited into the state treasury, a decrease in the total income tax burden, and recording in the income statement financial statements. The informants of this research are members of the Tax Rules Update Forum. This type of qualitative research uses a netnography approach. The reduction in current taxes deposited into the state treasury benefits the company by minimizing the costs incurred for the obligation to deposit state taxes. Companies that have deferred tax liabilities receive deferred tax benefits recorded in the balance sheet account, so the total income tax expense has decreased. In recording the income statement, the company has deferred tax assets adding to the deferred tax expense. Deferred tax expense in profit or loss account.

Taxation in a mixed economy: the case of China

2017 ◽  
Vol 34 (1) ◽  
pp. 49-61 ◽  
Author(s):  
Davidson Sinclair ◽  
Larry Li
Keyword(s):  
Income Tax ◽  
Central Government ◽  
Corporate Income Tax ◽  
Tax Rates ◽  
Government Ownership ◽  
Effective Tax Rate ◽  
Effective Tax Rates ◽  
Content Type ◽  
Tax Rate ◽  
For Profit

Purpose The purpose of this paper is to investigate how Chinese firms’ ownership structure is related to their effective tax rate. The People’s Republic of China provides an interesting environment to examine the corporate income tax. Government has significant ownership stakes in the for-profit economy and state-owned enterprises (SOEs) are liable to the corporate income tax. This is very different to most other economies where SOE tends to dominate the not-for-profit economy and pays no corporate income tax. Government ownership also varies between the central government and local government in addition to state asset management bureaus. This provides a rich institutional background to examining the corporate income tax. Design/methodology/approach A panel data analysis approach is used to examine relationship between ownership structure and effective tax rates of all public firms in China from 1999 to 2009. Findings The authors report that effective tax rates do appear to vary across the ownership types, but that SOEs pay a statistically higher effective tax rate than to non-state-owned. In addition, local government owned SOE pay higher effective tax rates than central government and SAMB owned SOE. The authors also investigate Zimmerman’s (1983) political cost hypothesis. Unfortunately, these results are econometrically fragile with the statistical significance of those results varying by empirical technique. Originality/value This paper provides insight into government ownership and taxation in China.

scholarly journals Beneficial ownership of income as an antiabusive measure in Serbian Tax Law

2020 ◽  
Vol 59 (88) ◽  
pp. 217-232
Author(s):  
Miloš Vasović
Keyword(s):  
Income Tax ◽  
Corporate Income Tax ◽  
Tax Law ◽  
Tax Rates ◽  
Double Taxation ◽  
Current Function ◽  
Tax Rate ◽  
Treaty Shopping ◽  
Beneficial Ownership ◽  
The One

The Serbian Corporate Income Tax Act contains a provision on the beneficial ownership of income (hereinafter: the BO provision), which is one of the conditions for the application of the preferential tax rate on income tax after tax deduction, which is envisaged in Treaties for the avoidance of Double Taxation on income and capital (hereinafter: Double Taxation Treaties/ DTTs). The subject matter of research in this paper is the term "beneficial ownership", which is not defined in the Corportate Income Tax Act. It may ultimately lead to abusing the preferential tax rates from the DTTs in tax planning and "treaty shopping" through the use of conduit companies. Tax experts have different opinions on the legal nature of the BO provision, which is given the function of an anti-abusive measure (on the one hand) and a rule for the attribution of income (on the other hand). The author analyzes the current function of the BO provision envisaged in the Serbian Serbian Corporate Income Tax Act (CITA), and its inadequate application. The author advocates for enacting the BO provision as an anti-abusive measure, and examines the possible application of the BO provision in domestic tax law, with reference to Articles 10, 11, and 12 of the DTTs that Serbia contracted with other states, as well as Articles 10-12 of the OECD Model-Convention on Income and Capital (2017) and Commentaries on these articles. Such an application of the BO provision may preclude "treaty shopping". In final remarks, the author points out why the BO provision should be envisaged as an anti-abusive measure in Serbian tax law.

scholarly journals The Impact of Federal and State Income Taxes on Timber Income in the Northeast and Midwest Following the 1986 Tax Reform Act

1996 ◽  
Vol 13 (1) ◽  
pp. 8-15 ◽  
Author(s):  
William C. Siegel ◽  
Harry L. Haney ◽  
Daniel M. Peters ◽  
Pete Bettinger ◽  
Debra S. Callihan
Keyword(s):  
New Hampshire ◽  
Income Tax ◽  
Income Level ◽  
Income Taxes ◽  
The State ◽  
High Income ◽  
Tax Rate ◽  
Income Levels ◽  
State Income Tax ◽  
State Income

Abstract The structure and provisions of state income taxes are detailed for timber owners in 19 states of the Northeast and Midwest. Using 1994 federal and state income tax rules, the tax liability for a hypothetical married couple with timber sale income was calculated for two federal income tax rate brackets (medium and high income levels) for states in the Northeast and Midwest that impose an income tax. At the medium income level, the state portion of the total income tax liability ranged from 12.7% in Pennsylvania to 25.6% in Delaware. At the high income level, the state portion ranged from 11.1% in Pennsylvania to 24.9% in Minnesota. For both income levels, New Hampshire had the lowest state portion of the total tax liability when considering their business profits tax (12% for the medium and 7% for the high income level). The provision most significantly affecting state income tax liability was the tax rate schedule. Installment sales provide an alternative tax planning strategy for those timber owners who qualify as investors rather than a business and who are in the lowest federal tax bracket. Several states also impose taxes other than an income tax when timber is harvested. For example, Minnesota and New Hampshire both impose a minimum 10% yield tax on the timber's stumpage value. These levies significantly affect the total tax liability on harvest income. North. J. Appl. For. 13(1):8-15.

CHARACTERISTICS OF CORPORATION TAX IN POLAND AND STATISTICAL ANALYSIS OF STATE TAX REVENUES

2018 ◽  
Vol 2 (XVIII) ◽  
pp. 215-232
Author(s):  
Tomasz Słapczyński
Keyword(s):  
European Union ◽  
Income Tax ◽  
Industrial Development ◽  
Free Market ◽  
Corporate Income Tax ◽  
Tax Rates ◽  
The European Union ◽  
Corporation Tax ◽  
Tax Management ◽  
State Income

Corporate income tax was introduced in Poland along with the establishment of a free market economy. This is a income tax that does not take into account the minimum tax-free and does not differentiate tax entities. Corporate income tax in Poland has undergone a number of important transformations, especially after the accession of Poland to the European Union. Tax rates have been systematically reduced since the early 1990s. Corporate income tax should be particularly convenient for entrepreneurs, and should not act destructively because the number of entrepreneurs in the state determines the level of economic and industrial development. This is even more important since, after Poland’s accession to the European Union, the transfer of the company to another country belonging to the community is no more a problem. The attractive income tax also attracts foreign investors for whom the aspect related to easy accounting is one of the key. The aim of the work is to bring the issue of Polish corporate income tax. It tries to address issues related to tax management in an enterprise, with the application of discounts and exemptions by entrepreneurs and also issues related to state income from corporate income tax and the income lost by the use of relief and dismissals.

scholarly journals Effective Corporate Income Tax Rates: Southern and Northern Economies of the European Union

2020 ◽  
Vol 10 (1) ◽  
pp. 117
Author(s):  
Dimitris Balios ◽  
Nikolaos Eriotis ◽  
Stefanos Tantos ◽  
Dimitrios Vasiliou
Keyword(s):  
European Union ◽  
Income Tax ◽  
Corporate Income Tax ◽  
Tax Rates ◽  
The European Union ◽  
Tax Rate ◽  
Industrial Sectors ◽  
Determining Factors ◽  
Business Profitability ◽  
Alternative Approaches

In the present study, we attempt to investigate the determinants of the effective corporate tax rate of companies of the European Union (EU) discriminating between northern and southern economies. We adopt in our analysis the period after the outbreak of the crisis in the Eurozone up today including some years before 2009 in the assessed period. Our empirical investigation is based on three alternative approaches to effective income tax rate based on accounting information. We investigate the determinants of ECITR assessing two sub-samples of firms from all the aforementioned industrial sectors for 16 member countries of Europe. The first sub-sample consists of firms from 12 member countries of "North" European Union and the second sub-sample consists of firms from 4 member countries of "South" European Union. The analysis covers the period 2004-2016. Estimation results point out that the effective corporate income tax rate is variously affected by firm-specific determining factors for both northern and southern economies. The relation between ECITR and determining factors is ascertained to be less significant (sensitive) during the pre-crisis period in comparison with the respective empirical findings after the outburst of the economic crisis in the European Union. Empirical findings indicate that effective corporate income tax rate is more vulnerable to financial leverage for southern economies in comparison to the northern economies signaling financing structure differences between the two EU-country groups. Finally, there is evidence that there is an indisputable and positive coexistence between business profitability and tax burden.

Discussion of The Effect of the Formula Apportionment System on State-Level Economic Development and Multijurisdictional Tax Planning

1999 ◽  
Vol 21 (s-1) ◽  
pp. 58-62
Author(s):  
Kenneth J. Klassen
Keyword(s):  
Income Tax ◽  
State Level ◽  
Future Research ◽  
Tax Rates ◽  
Cross Sectional ◽  
Tax Rate ◽  
Factor Income ◽  
State Income ◽  
The Common ◽  
Tax Research

Lightner (1999) explores the relation between cross-sectional differences in state income apportionment formulae and corporate income tax rates, and the changes in state-level manufacturing employment. The research uses the common methodology of computing a statutory income tax rate applicable to each of the three apportionment factors. The percentage change in employment is regressed on each of these factor income tax rates separately. Additional tests determine if the statutory rate, overweighting the sales factor, and employing the throwback rule are also correlated with relative changes in employment. I analyze this research in three components. First, an overview of the multijurisdictional tax research is provided to set this paper into this growing literature. Next, an evaluation of the contributions of Lightner (1999) is presented. Finally, some suggestions for improvement are given. The conclusion includes a suggestion for future research in this area.

scholarly journals The Effect of Corporate Taxes on Investment and Entrepreneurship

2010 ◽  
Vol 2 (3) ◽  
pp. 31-64 ◽  
Author(s):  
Simeon Djankov ◽  
Tim Ganser ◽  
Caralee McLiesh ◽  
Rita Ramalho ◽  
Andrei Shleifer
Keyword(s):  
Cross Section ◽  
Informal Economy ◽  
Income Tax ◽  
Corporate Income Tax ◽  
Entrepreneurial Activity ◽  
Domestic Firm ◽  
Tax Rates ◽  
Corporate Tax ◽  
Tax Rate ◽  
Aggregate Investment

We present new data on effective corporate income tax rates in 85 countries in 2004. The data come from a survey, conducted jointly with PricewaterhouseCoopers, of all taxes imposed on “the same” standardized mid-size domestic firm. In a cross-section of countries, our estimates of the effective corporate tax rate have a large adverse impact on aggregate investment, FDI, and entrepreneurial activity. Corporate tax rates are correlated with investment in manufacturing but not services, as well as with the size of the informal economy. The results are robust to the inclusion of many controls. (JEL E22, F23, G31, H25, H32, L26)

The Impact of Federal and State Income Taxes on Timber Income in the South Following the 1986 Tax Reform Act

1989 ◽  
Vol 13 (4) ◽  
pp. 196-203 ◽  
Author(s):  
Pete Bettinger ◽  
Harry L. Haney ◽  
William C. Siegel
Keyword(s):  
North Carolina ◽  
Income Tax ◽  
Income Level ◽  
Income Taxes ◽  
The State ◽  
High Income ◽  
Tax Rates ◽  
Total Income ◽  
State Income ◽  
Timber Sale

Abstract The 1988 federal and state income tax liabilities for hypothetical forest landowners in two federal income tax brackets, each with and without timber sale revenue, were calculated for the 14 southern states. At the medium income level, the state portion of total income tax liability(without timber sale revenue) ranges from 9% in Louisiana to 20% in North Carolina. With timber sale revenue, it ranges from 7% in Louisiana to 17% in North Carolina. At the high income level, the state portion of total income taxes (without timber sale revenue) ranged from 7% in Louisianato 16% in North Carolina, and with timber sale revenue, from 6% in Louisiana to 15% in North Carolina. Capital gains exclusions, deductions for federal income taxes, tax rates and schedules, standard deductions, and personal exemptions are the most important provisions for reducing state incometax liability. The installment sale method of reporting income was used as one alternative tax planning strategy for spreading timber sale revenue over a 2-year period. The purpose was to smooth cash flows and reduce the amount of income subject to higher marginal tax rates. Georgia taxpayerselecting the installment sale method of reporting in a hypothetical case saved $1,203 and $585 in total income taxes for the medium and high income levels, respectively. South. J. Appl. For. 13(4):196-203.

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