scholarly journals Corporate Tax Planning: Impact of COVID-19 and Transfer Pricing: Approaches for Comparability Adjustments

2021 ◽  
Vol 69 (3) ◽  
pp. 981-1001
Author(s):  
Andrew Barton ◽  
Vinu Subramaniam ◽  
Paola Marino
Keyword(s):  
Historical Data ◽  
Transfer Pricing ◽  
Tax Planning ◽  
Simple Analysis ◽  
Corporate Tax ◽  
Profit Margins ◽  
Length Range ◽  
Economic Reality ◽  
The Impact ◽  
Key Questions

The impact of the COVID-19 pandemic has varied significantly across market sectors and companies, and the disruptions generated by the pandemic have had major implications for the transfer-pricing practices of many multinationals. The COVID-19 crisis has challenged the efficiency of traditional benchmarking of profit margins and markups on the basis of the profitability of comparable companies. In this article, we provide a framework for addressing two key questions: (1) how to ensure that the data used for setting or testing transfer-pricing results are appropriate in terms of comparability and that they adequately reflect economic reality for the tested party; and (2) what adjustments need to be made if the tested party's results fall below the arm's-length range. Given the extraordinary circumstances, we cannot rely on a simple analysis of historical data to adjust for the impact faced by businesses as a result of COVID-19. For example, in situations where the taxpayer's results have been affected by the COVID-19 pandemic to a greater extent than the results of comparable companies, the approaches outlined in this article will provide the taxpayer with an estimated arm's-length range of profitability for the comparable companies that is calibrated to the impact of the pandemic on the tested party's results. These approaches are aligned with the transfer-pricing guidance for COVID-19 adjustments issued by the Organisation for Economic Co-operation and Development in December 2020.

Corporate tax planning and corporate tax disclosure

2019 ◽  
Vol 28 (2) ◽  
pp. 327-364
Author(s):  
Mahfoudh Hussein Mgammal
Keyword(s):  
Positive Impact ◽  
Positive Influence ◽  
Tax Planning ◽  
Corporate Tax ◽  
Effective Tax Rate ◽  
Firm Level ◽  
Data Set ◽  
Content Type ◽  
The Impact ◽  
Practical Implications

Purpose This paper aims to examine the impact of corporate tax planning (TP) on tax disclosure (TD). Using tax expenses data set, with the detailed effective tax rate (ETR) by reconciling individual items of income and expenses. Design/methodology/approach A firm-level panel data set is used to analyse 286 non-financial listed companies on Bursa Malaysia that spans the period 2010-2012. Multivariate statistical analyses were run on the sample data. The empirical understanding of TD depends on public sources of data in the financial statement, characterized in the aggregated note of tax expenses. Fitting with Malaysian environment, the authors measured TD using modified ETR reconciling items. Findings Results show that TP, exhibit a robust positive influence on TD. This suggests that TP is related to lower corporate TD. In addition, companies with high TP attempt to mitigate the disclosure problem by increasing various TD. The authors further find significant positive impact between each of firm size and industry dummy, on TD. This means that company-specific characteristics are significant factors affecting corporate TD. Research limitations/implications This study contributes to the literature on the effect of TP on TD. It depends on both the signalling theory and the Scholes–Wolfson framework, which are the main theories concerned with TP and TD. Therefore, from a theoretical side, the authors add to the current theories by verifying that users are the party influenced whether positively or negatively, by the extent of TD or the extent of TP activities through Malaysian organizations. Practical implications The evidence found in this paper has important policy and practical implications for the authorities, researchers, decision makers and company managers. The findings can provide them some relevant insights on the importance of TP actions from companies’ perspective and contribute to the discussion of who verifies and deduces from TD directed by companies. Originality/value This paper originality is regarded as the first attempt to examine the impact of TP on TD in a developing country such as Malaysia. Malaysian setting is an interesting one to examine because Malaysia could be similar to other countries in Southeast Asia. Results contribute significant insights to the discussion about TD regarding, which parties are responsible for the verification of TD by firms, and which parties benefit from this disclosure. Findings suggest that companies face a trade-off between tax benefits and TD when selecting the type of their TP.

scholarly journals The Impact of Tax Planning on Firm Value

2021 ◽  
Vol 6 (2) ◽  
pp. 196-204
Author(s):  
Arif Darmawan ◽  
Shella Angelina
Keyword(s):  
Firm Value ◽  
Manufacturing Sector ◽  
Total Sample ◽  
Tax Planning ◽  
Corporate Tax ◽  
Test Tool ◽  
Company Value ◽  
Negative Effect ◽  
Independent Variable ◽  
The Impact

The purpose of this research to determine the effect of tax planning that is measured using Cash ETR and Book Tax Difference (BTD) on company value. In addition to that, the purpose of doing tax planning is also to streamline corporate tax expenditures following applicable regulations, so that with the existence of corporate tax planning can estimate the company's tax expenses. This study uses the dependent variable that is the value of the company that is proxy using Tobins' Q while the independent variable is tax planning which is proxy using Cash ETR and Book Tax Different. The control variables used in this study are Size and Leverage. The samples used in this study were all manufacturing sector companies in a row from 2016 to 2018 with a total sample of 135 companies for 3 consecutive years. This study uses the Eviews 9 test tool and uses a multiple regression test. The results of this study indicate that Cash ETR has a positive effect on firm value while Book Tax Different has a negative effect on firm value.

TRANSFER FİYATLAMA UYGULAMASININ İŞLETME PERFORMANSINA ETKİSİ VE VERGİSEL AÇIDAN DEĞERLENDİRİLMESİ

2014 ◽  
Vol 1 (2) ◽  
pp. 187
Author(s):  
Serdar KUZU
Keyword(s):  
Business Performance ◽  
Transfer Pricing ◽  
Tax Law ◽  
Economic Activities ◽  
Tax System ◽  
Goods And Services ◽  
Tax Legislation ◽  
International Transactions ◽  
The Cost ◽  
The Impact

The size of international trade continues to extend rapidly from day to day as a result of the globalization process. This situation causes an increase in the economic activities of businesses in the trading area. One of the main objectives of the cost system applied in businesses is to be able to monitor the competitors and the changes that can be occured as a result of the developments in the sector. Thus, making cost accounting that is proper according to IAS / IFRS and tax legislation has become one of the strategic targets of the companies in most countries. In this respect, businesses should form their cost and pricing systems according to new regulations. Transfer pricing practice is usefull in setting the most proper price for goods that are subject to the transaction, in evaluating the performance of the responsibility centers of business, and in determining if the inter-departmental pricing system is consistent with targets of the business. The taxing powers of different countries and also the taxing powers of different institutions in a country did not overlap. Because of this reason, bringing new regulations to the tax system has become essential. The transfer pricing practice that has been incorporated into the Turkish Tax System is one of the these regulations. The transfer pricing practice which includes national and international transactions has been included in the Corporate Tax Law and Income Tax Law. The aim of this study is to analyse the impact of goods and services transfer that will occur between departments of businesses on the responsibility center and business performance, and also the impact of transfer pricing practice on the business performance on the basis of tax-related matters. As a result of the study, it can be said that transfer pricing practice has an impact on business performance in terms of both price and tax-related matters.

The Impact of Terrorism on Construction Industry in Iraq

2015 ◽  
Vol 3 (2) ◽  
pp. 69-84
Author(s):  
Wadhah Amer Hatem ◽  
Samiaah M. Hassen Al-Tmeemy
Keyword(s):  
Construction Industry ◽  
Construction Projects ◽  
Historical Data ◽  
Terrorist Attacks ◽  
Construction Sector ◽  
Statistical Procedures ◽  
Qualitative Approaches ◽  
Suicide Attacks ◽  
The Face ◽  
The Impact

     Suicide attacks, bombings, explosions became the part of daily life in Iraq. Consequently, the threat of terrorism put the Iraqi construction sector in the face of unique and unusual challenges that not seen on other countries. These challenges can have extensive impact on construction projects. This paper seeks to examine the impact of the terrorist attacks on construction industry and determine the extent to which the impact of terrorism on construction projects in terms of cost, schedule, and quality. This study adapted quantitative and qualitative approaches to collect data using questionnaire survey and interviews, as well as historical data. The study focused on projects that have been the target of terrorist strikes in Diyala governorate. A variety of statistical procedures were employed in data analysis. The results revealed the extent to which terrorist attacks impact construction projects in terms of cost, time, and quality. The results of this study will enhance the awareness of all construction parties to the impact of the terrorist attacks against construction projects. Eventually, this can develop a risk management assessment and assist contractors to properly protect projects and buildings to minimize injuries and fatalities in the event of terrorism.

The Shareholder Response to Corporate Tax Planning Advice Regulation

2020 ◽  
Author(s):  
Michael P. Donohoe ◽  
Brian Gale ◽  
Michael Mayberry
Keyword(s):  
Tax Planning ◽  
Corporate Tax

Brewing Up Controversy: A Case Exploring the Ethics of Corporate Tax Planning

2015 ◽  
Vol 30 (4) ◽  
pp. 311-327 ◽  
Author(s):  
Megan F. Hess ◽  
Raquel Meyer Alexander
Keyword(s):  
Real World ◽  
Ethical Issues ◽  
Tax Avoidance ◽  
Tax Planning ◽  
Learning Assessment ◽  
Class Discussion ◽  
Corporate Tax ◽  
Tax Havens ◽  
Multinational Organizations ◽  
The U.S

ABSTRACT This instructional case explores the ethical issues surrounding the corporate tax-planning and tax-avoidance strategies of multinational organizations. Drawing on the real-world experiences of SABMiller, one of the world's largest beverage companies, this case provides a launching point for students to consider the ethics of corporate tax planning. The ethics of multinational tax practices, especially the use of tax havens, has recently become the focus of media and legislative debate in both the U.S. and the U.K., and many well-respected companies, such as General Electric, Apple Inc., and Starbucks are now feeling the pressure to reform. In a post-case learning assessment, students demonstrated significant improvement in their understanding and indicated that they enjoyed discussing this controversial issue. The “Implementation Guidance” section and Teaching Notes offer guidance for in-class discussion of the ethical and tax issues in this case.

scholarly journals Substitution across profit shifting methods and the impact on thin capitalization rules

2021 ◽  
Author(s):  
Gideon Goerdt ◽  
Wolfgang Eggert
Keyword(s):  
Multinational Firms ◽  
Transfer Pricing ◽  
Multinational Firm ◽  
Profit Shifting ◽  
Goods And Services ◽  
Internal Goods ◽  
Transfer Prices ◽  
Debt Shifting ◽  
The Impact ◽  
Thin Capitalization

AbstractThin capitalization rules limit firms’ ability to deduct internal interest payments from taxable income, thereby restricting debt shifting activities of multinational firms. Since multinational firms can limit their tax liability in several ways, regulation of debt shifting may have an impact on other profit shifting methods. We therefore provide a model in which a multinational firm can shift profits out of a host country by issuing internal debt from an entity located in a tax haven and by manipulating transfer prices on internal goods and services. The focus of this paper is the analysis of regulatory incentives, $$(i)$$ ( i ) if a multinational firm treats debt shifting and transfer pricing as substitutes or $$(ii)$$ ( i i ) if the methods are not directly connected. The results provide a new aspect for why hybrid thin capitalization rules are used. Our discussion in this paper explains why hybrid rules can result in improvements in welfare if multinational firms treat methods of profit shifting as substitutes.

Has tourism driven house prices in Germany? Time-varying evidence since 1870

2021 ◽  
pp. 135481662110088
Author(s):  
Sefa Awaworyi Churchill ◽  
John Inekwe ◽  
Kris Ivanovski
Keyword(s):  
World War Ii ◽  
Historical Data ◽  
House Prices ◽  
Housing Prices ◽  
Time Varying ◽  
Data Set ◽  
Time Series Modelling ◽  
The Impact ◽  
Tourism Flows ◽  
Non Parametric

Using a historical data set and recent advances in non-parametric time series modelling, we investigate the nexus between tourism flows and house prices in Germany over nearly 150 years. We use time-varying non-parametric techniques given that historical data tend to exhibit abrupt changes and other forms of non-linearities. Our findings show evidence of a time-varying effect of tourism flows on house prices, although with mixed effects. The pre-World War II time-varying estimates of tourism show both positive and negative effects on house prices. While changes in tourism flows contribute to increasing housing prices over the post-1950 period, this is short-lived, and the effect declines until the mid-1990s. However, we find a positive and significant relationship after 2000, where the impact of tourism on house prices becomes more pronounced in recent years.

scholarly journals A Hybrid Energy System Workflow for Energy Portfolio Optimization

Energies ◽  
2021 ◽  
Vol 14 (15) ◽  
pp. 4392
Author(s):  
Jia Zhou ◽  
Hany Abdel-Khalik ◽  
Paul Talbot ◽  
Cristian Rabiti
Keyword(s):  
Time Series ◽  
Gaussian Process ◽  
Electricity Market ◽  
Process Model ◽  
Net Present Value ◽  
Historical Data ◽  
Energy System ◽  
Initial Guess ◽  
Reduced Order ◽  
The Impact

This manuscript develops a workflow, driven by data analytics algorithms, to support the optimization of the economic performance of an Integrated Energy System. The goal is to determine the optimum mix of capacities from a set of different energy producers (e.g., nuclear, gas, wind and solar). A stochastic-based optimizer is employed, based on Gaussian Process Modeling, which requires numerous samples for its training. Each sample represents a time series describing the demand, load, or other operational and economic profiles for various types of energy producers. These samples are synthetically generated using a reduced order modeling algorithm that reads a limited set of historical data, such as demand and load data from past years. Numerous data analysis methods are employed to construct the reduced order models, including, for example, the Auto Regressive Moving Average, Fourier series decomposition, and the peak detection algorithm. All these algorithms are designed to detrend the data and extract features that can be employed to generate synthetic time histories that preserve the statistical properties of the original limited historical data. The optimization cost function is based on an economic model that assesses the effective cost of energy based on two figures of merit: the specific cash flow stream for each energy producer and the total Net Present Value. An initial guess for the optimal capacities is obtained using the screening curve method. The results of the Gaussian Process model-based optimization are assessed using an exhaustive Monte Carlo search, with the results indicating reasonable optimization results. The workflow has been implemented inside the Idaho National Laboratory’s Risk Analysis and Virtual Environment (RAVEN) framework. The main contribution of this study addresses several challenges in the current optimization methods of the energy portfolios in IES: First, the feasibility of generating the synthetic time series of the periodic peak data; Second, the computational burden of the conventional stochastic optimization of the energy portfolio, associated with the need for repeated executions of system models; Third, the inadequacies of previous studies in terms of the comparisons of the impact of the economic parameters. The proposed workflow can provide a scientifically defendable strategy to support decision-making in the electricity market and to help energy distributors develop a better understanding of the performance of integrated energy systems.

scholarly journals The impact of COVID-19 on emergency surgical presentations in a university teaching hospital

2021 ◽  
Author(s):  
Ahmed M. Kamil ◽  
Matthew G. Davey ◽  
Fadi Marzouk ◽  
Rish Sehgal ◽  
Amy L. Fowler ◽  
...  
Keyword(s):  
Acute Appendicitis ◽  
Teaching Hospital ◽  
Historical Data ◽  
Severe Disease ◽  
University Teaching ◽  
Readmission Rates ◽  
Descriptive Data ◽  
Operative Complications ◽  
Hospital Patients ◽  
The Impact

Abstract Introduction The Coronavirus-19 (COVID-19) pandemic has led to a 50–70% reduction in acute non-COVID-19 presentations to emergency departments globally. Aim To determine the impact of COVID-19 on incidence, severity, and outcomes of acute surgical admissions in an Irish University teaching hospital. Methods Descriptive data concerning patients presenting with acute appendicitis, diverticulitis, and cholecystitis were analysed and compared from March–May 2020 to March–May 2019. Results Acute surgical admissions decreased in March from 191 (2020) to 55 (2019) (55%), before increasing by 28% in April (2019: 119, 2020: 153). Admissions due to acute cholecystitis reduced by 33% (2019: 33, 2020: 22), with increased severity at presentation (P = 0.079) and higher 30-day readmission rates (P = 0.056) reported. Acute appendicitis presentations decreased by 44% (2019: 78, 2020: 43, P = 0.019), with an increase in severity (P < 0.001), conservative management (P < 0.001), and post-operative complications (P = 0.029) in 2020 compared to the same period in 2019. Conclusion COVID-19 has potentiated a significant reduction in acute surgical presentations to our hospital. Patients presenting with acute appendicitis during the pandemic had more severe disease, were more likely to have complications, and were significantly more likely to be managed conservatively when compared to historical data.

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