scholarly journals Investors´ decision on the context of the effective taxation of agricultural companies

10.5219/1223 ◽  
2019 ◽  
Vol 13 (1) ◽  
pp. 1040-1050
Author(s):  
Alena Andrejovská ◽  
Veronika Konečná
Keyword(s):  
Agricultural Production ◽  
Intangible Assets ◽  
Tax Rates ◽  
Equity Financing ◽  
Effective Tax Rates ◽  
Tax Rate ◽  
Tangible Assets ◽  
Marginal Tax Rates ◽  
External Sources ◽  
Statutory Tax Rate

The analysis of the effective taxation combines two different effective tax rates which are crucial for placement and monitoring of the investment amount in the particular country. Both of these tax rates are important for investors who make a decision on the benefits, as well as the risks of corporate taxation in the country. The contribution deals with the problem of the effective taxation through effective average tax rates (EATR) and effective marginal tax rates (EMTR). Especially, it focuses on agricultural production companies. The effectivity of taxation was observed for selected intangible and tangible assets for a period of 2004 and 2018. Our analysis evaluated the influence of the change in the statutory tax rates (and the other taxes and indicators, as well) on the change in effective average tax rates on capital in the agricultural companies. Based on the results, the lowest EATR, ranging from 20.79% to 25.25%, reported agricultural lands in both reference periods and for both ways of financing. Analyzing EMTR we found out that the lowest value reported investments in intangible assets that have crucial significance for investors. Our results definitely made it clear that in the EATR ↔ EMTR relationship, a form of financing investments is decisive. This relationship is used when an investor decides between several mutually exclusive locations or types of investment in a given country. In equity financing, the most effective capital is investing in intangible assets, and when we consider financing from external sources it is investment into stocks. An increase in the statutory tax rate of 2% resulted in a 12% increase in effective average tax rates.

scholarly journals Company Taxation in the European Union

2012 ◽  
Vol 14 (3) ◽  
pp. 119-136 ◽  
Author(s):  
Dorota Wawrzyniak
Keyword(s):  
Tax Burden ◽  
Tax Rates ◽  
The European Union ◽  
Corporate Tax ◽  
Effective Tax Rates ◽  
Tax Rate ◽  
Advantages And Disadvantages ◽  
Company Taxation ◽  
Statutory Tax Rate ◽  
The Eu

This paper investigates different measures of corporate tax burden ranging from the most basic ones such as the statutory tax rate to the effective tax rates. Each of these measures has advantages and disadvantages and they may lead to different rankings of countries. One of the reasons lies the fact that they measure different things. The comparison of the statutory tax rates to the effective ones for the EU-27 during the period of 1998-2009 sometimes reveals very significant differences between these indicators. Taking this into consideration, the paper suggests that corporate tax burden analysis should not be limited to the most basic and readily available measure in the form of the statutory tax rate. Different measures are tailored to answer different research questions. Moreover, the article presents changes of company taxation for the EU-27 within 1998-2009.

scholarly journals Capital taxation efficiency of agricultural businesses in the Slovak Republic

10.5219/1135 ◽  
2019 ◽  
Vol 13 (1) ◽  
pp. 572-580
Author(s):  
Alena Andrejovská ◽  
Ján Buleca ◽  
Veronika Puliková
Keyword(s):  
Capital Investment ◽  
Slovak Republic ◽  
Average Rate ◽  
Tax Rates ◽  
Capital Taxation ◽  
Tax Rate ◽  
Tax Shield ◽  
Tangible Assets ◽  
The Impact ◽  
Statutory Tax Rate

Effective tax rates are presented by indicators of the actual corporate tax burden, which take into account the impact of all the elements listed in the legislation. The submitted contribution explores the issue of effective taxation through effective average tax rates (EATRs) focusing on agricultural production enterprises. The analysis assessed the effect of changing the statutory tax rate (and other taxes and factors) on changing the effective average rate of capital. Taxation efficiency was monitored for selected intangible and tangible assets for 2004 and 2018. Analysis indicated a depreciation tax shield that tracked the amount of tax savings on capital investment as well as the economic rent of the project with taxation. The analysis showed that a 3% increase in the statutory rate over the reference period increased the effective average corporate rates for intangible assets by 13.35%, tangible assets by 14.25% and inventories by 16.63%. The highest annual tax saving was achieved in 2018 for tangible assets of € 4,647.50, with a four-year return.

scholarly journals Tax Incentives: An Effective Mechanism to Achieve EU Harmonization?

2020 ◽  
Vol 2 (2) ◽  
pp. 1
Author(s):  
Elisabeth Bustos-Contell ◽  
Salvador Climent-Serrano ◽  
Gregorio Labatut-Serer
Keyword(s):  
Tax Incentives ◽  
Tax Burden ◽  
Tax Rates ◽  
Incentive Structure ◽  
Effective Tax Rate ◽  
Effective Tax Rates ◽  
Member States ◽  
Tax Rate ◽  
Tax Harmonization ◽  
Statutory Tax Rate

For decades, European Union (EU) wide corporate tax harmonization has been sought to eradicate business relocation for tax reasons. It is hoped that this harmonization will ensure that companies pay taxes in the countries where they operate. One mechanism that countries use to achieve this harmonization is tax incentives. Yet each country establishes its own incentive structure, according to its statutory tax rate. This study analyzes the effective tax burden in the initial 15 EU member states between 2006 and 2014 to identify significant differences that prevent tax harmonization across these countries. The statutory and effective tax rates are used to evaluate the tax burden. The net tax incentives and disincentives are also considered. The analysis shows that between 2006 and 2014, these 15 member states used tax incentives to close the gaps among these countries’ tax burdens. Countries with above-average effective tax rates offered greater tax incentives than countries with below-average effective tax rates. However, though these tax policies reduced the gap in the tax burden, harmonization of the effective tax rate was not achieved during the study period.

A Study of Perceived Ethicality of Low Corporate Effective Tax Rates

2017 ◽  
Vol 32 (1) ◽  
pp. 87-104 ◽  
Author(s):  
F. Todd DeZoort ◽  
Troy J. Pollard ◽  
Edward J. Schnee
Keyword(s):  
Mediation Analysis ◽  
General Public ◽  
Tax Avoidance ◽  
Tax Rates ◽  
Perceived Fairness ◽  
Effective Tax Rate ◽  
Effective Tax Rates ◽  
Tax Rate ◽  
Policy Practice ◽  
Participant Group

SYNOPSIS U.S. corporations have the ability to avoid paying domestic taxes to achieve an effective tax rate that is much lower than the statutory federal tax rate. This study evaluates the extent that individuals differ in their attitudes about the ethicality of corporations avoiding domestic taxes to achieve low effective tax rates. We also examine the extent to which the specific tax avoidance method used by corporations to access a low effective tax rate affects perceived ethicality. Eighty-two members of the general public and 112 accountants participated in an experiment with two participant groups and three tax avoidance methods manipulated randomly between subjects. The results indicate a significant interaction between participant group and tax avoidance method, with the general public considering shifting profits out of the country to achieve a low effective tax rate to be highly unethical, while the accountants find tax avoidance from carrying forward prior operating losses to be highly ethical. Further, mediation analysis indicates that perceived fairness and legality mediate the effects of participant type on perceived ethicality. Mediation analysis also reveals that sense of fairness and legality mediate the link between tax avoidance method and perceived ethicality. We conclude by considering the study's policy, practice, and research implications.

A Model of Multinational Income Shifting and an Application to Tax Planning with E-Commerce

2014 ◽  
Vol 36 (2) ◽  
pp. 27-53 ◽  
Author(s):  
Kenneth J. Klassen ◽  
Stacie K. Laplante ◽  
Carla Carnaghan
Keyword(s):  
Tax Planning ◽  
Investment Model ◽  
Income Shifting ◽  
Tax Rates ◽  
Foreign Investments ◽  
Effective Tax Rates ◽  
Tax Rate ◽  
Foreign Earnings ◽  
Joint Consideration ◽  
The U.S

ABSTRACT: This manuscript develops an investment model that incorporates the joint consideration of income shifting by multinational parents to or from a foreign subsidiary and the decision to repatriate or reinvest foreign earnings. The model demonstrates that, while there is always an incentive to shift income into the U.S. from high-foreign-tax-rate subsidiaries, income shifting out of the U.S. to low-tax-rate countries occurs only under certain conditions. The model explicitly shows how the firms' required rate of return for foreign investments affects both repatriation and income shifting decisions. We show how the model can be used to refine extant research. We then apply it to a novel setting—using e-commerce for tax planning. We find firms in manufacturing industries with high levels of e-commerce have economically significant lower cash effective tax rates. This effect is magnified for firms that are less likely to have taxable repatriations. JEL Classifications: G38, H25, H32, M41.

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.

Strategic Choice of Presentation Format: The Case of ETR Reconciliations

2021 ◽  
Author(s):  
Roman Chychyla ◽  
Diana Falsetta ◽  
Sundaresh Ramnath
Keyword(s):  
Income Tax ◽  
Strategic Choice ◽  
Presentation Format ◽  
Tax Rates ◽  
Effective Tax Rate ◽  
Effective Tax Rates ◽  
Tax Rate ◽  
Explicit Mention ◽  
Disclosure Strategy ◽  
Minimize Costs

To minimize costs related to unfavorable perceptions of their tax-related activities, firms with low effective tax rates (ETR) could avoid, where possible, explicit mentions of their effective tax rates. Using this reputational cost perspective we study an item of required disclosure in the income tax footnote of the 10-K, the ETR reconciliation table, where firms can choose a presentation format that reveals the tax rate (the percentage format) or one that avoids explicit mention of the effective tax rate (the dollar format). We find that firms with low ETRs are 24 percent more likely to use the dollar format, and are also less likely to mention their tax rates elsewhere in their disclosures, consistent with the choice of dollar format reflecting a firm's overall tax disclosure strategy. Analysts' tax expense forecasts are less accurate for dollar format firms, suggesting higher processing costs associated with tax-related disclosures for these firms.

Visualization of tax avoidance and tax rate convergence

2019 ◽  
Vol 27 (5) ◽  
pp. 695-724 ◽  
Author(s):  
Chika Saka ◽  
Tomoki Oshika ◽  
Masayuki Jimichi
Keyword(s):  
Tax Avoidance ◽  
Tax Rates ◽  
Cross Sectional ◽  
Effective Tax Rates ◽  
Accounting Data ◽  
Content Type ◽  
Tax Rate ◽  
Objective Evidence ◽  
New Perspective ◽  
Convergence Trend

Purpose This study aims to explore the evidence of the probability of firms’ tax avoidance and the downward convergence trend of national statutory tax rates and firms’ effective tax rates. Design/methodology/approach This research employs exploratory data analysis using interactive data manipulation and visualization tools, namely, R with SparkR, dplyr, ggplot2 and googleVis (GeoChart and Motion Chart) packages. This analysis is based on the world-scale accounting data of all listed firms from 148 countries spanning 30 years. Findings The results reveal the following: three types of evidences on probability of firms’ tax avoidance, showing a non-random distribution of firms’ effective tax rates and return on assets, cross-sectional variation of firms’ effective tax rates in each country, and the trend of difference between effective tax rates and statutory tax rates, and the downward convergence trend of statutory tax rates and firms’ effective tax rates. Practical implications The results highlight the prominent issues of world-scale tax avoidance and tax rate competition and facilitate a collaborative discussion between laymen and professionals using objective evidence. Originality/value A novel methodology is adopted through the visualization of world-scale accounting data, which can facilitate a new perspective, revealing unexpected patterns and trends in otherwise hidden information. This study also highlights the importance of global consideration of firms’ tax avoidance and tax rate competition, using objective evidence.

An Investigation of the Firm Size—Effective Tax Rate Relation in the 1980s

1993 ◽  
Vol 8 (2) ◽  
pp. 167-182 ◽  
Author(s):  
Thomas C. Omer ◽  
Karen H. Molloy ◽  
David A. Ziebart
Keyword(s):  
Firm Size ◽  
Tax Burden ◽  
Tax Rates ◽  
Corporate Tax ◽  
Effective Tax Rate ◽  
Effective Tax Rates ◽  
Policy Makers ◽  
Tax Rate ◽  
Sample Composition ◽  
Rate Relation

Given the recent emphasis on effective tax rates by policy makers and accounting researchers, this study investigates the relation between firm size and corporate tax burdens on a yearly and an industry basis. The analysis is conducted using five effective tax measures employed in previous studies in order to determine the degree to which inferences between size and tax burden are robust across these different effective tax measures. The results indicate that the relation is fairly robust across measures and, in instances in which the relation is not upheld by our analysis, sample composition explains differences in the observed relation between firm size and corporate tax burden.

scholarly journals Marginal Tax Rates and Income Inequality in a Life-Cycle Model

1999 ◽  
Vol 89 (5) ◽  
pp. 1197-1215 ◽  
Author(s):  
David Altig ◽  
Charles T Carlstrom
Keyword(s):  
Life Cycle ◽  
Income Inequality ◽  
Computable General Equilibrium ◽  
Tax Rates ◽  
Cycle Model ◽  
Marginal Tax Rate ◽  
Tax Rate ◽  
Marginal Tax Rates ◽  
Quantitative Impact ◽  
Distribution Of Income

In this paper we study the quantitative impact of marginal tax rates on the distribution of income. Our methodology builds on computable general-equilibrium framework. We find that distortions from marginal tax rate changes of the sort implied by the Tax Reform Act of 1986 have sizable effects on income inequality in a reasonably quantified life-cycle setting: In our model rate changes alone capture half the increase in the pretax Gini that actually occurred between 1984 and 1989. (JEL C68, D31, H30, H20)

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