The Catalan Syndrome? Revisiting the Relationship Between Income and Support for Independence in Catalonia

The surge in support for independence in Catalonia (Spain) has received much political, journalistic, as well as academic attention. A popular account of the Catalan case stresses the allegation that motives relating to fiscal selfishness are behind the independence movement. The evidence presented in support of this argument is the positive correlation between income and support for independence. Some scholars, such as Thomas Piketty, even talk about a “Catalan syndrome,” according to which support for independence can ultimately be explained by fiscal selfishness and the prospect of creating a sort of tax haven in Catalonia. As prominent as this argument is, in this article I show that it rests on weak theoretical and empirical grounds. In order to do so, I reassess the existing evidence, using a more nuanced empirical strategy that allows for non-linear relations to emerge and controls for potential confounders. Then, I also present new evidence based on recently published census-tract level fiscal data, merged with election results. Finally, I spell out the mechanisms and observable implications of the “Catalan syndrome” argument and show that fiscal selfishness is not an important driver of the Catalan independence movement.

New fiscal law aims to clean up Panama’s reputation

Significance This marks another step towards Panama’s long-standing aim of strengthening its fiscal framework and countering its reputation as a tax haven. While the law will bring some improvements, much of Panama’s fiscal framework remains opaque. This will continue to pose reputational risks for investors and financiers. Impacts The fiscal reform will have knock-on effects for businesses in terms of updating taxation and regulatory procedures. Ongoing analysis of the Pandora Papers could reveal further links to Panama’s corporate financing and, potentially, public figures. A push to improve fiscal transparency could hit financial sector revenues in the short term, as investors move to other jurisdictions.

Peran Komisaris Independen Di Indonesia : Multinationality, Tax Haven, Penghindaran Pajak

Penelitian ini bertujuan untuk menguji pengaruh multinationality dan tax haven terhadap penghindaran pajak. Selain itu, penelitian ini juga memasukkan komisaris independen sebagai pemoderasi daalam hubungan variabel independen dan dependen. Penelitian ini menggunakan data perusahaan sektor industri barang konsumsi tahun 2017 sampai dengan 2019 yang bersumber dari www.idx.co.id. Berdasarkan purposive sampling, sampel final penelitian ini berjumlah 64 observasi. Metode analisis yang digunakan dalam penelitian ini adalah analisis regresi linier berganda untuk data panel. Hasil penelitian menunjukkan bahwa multinationality berpengaruh positif terhadap tax avoidance, sedangkan tax haven berpengaruh negatif terhadap penghindaran pajak. Sementara itu, komite independen tidak berhasil memiliki peran dalam hubungan multinationality dan penghindaran pajak maupun hubungan tax haven terhadap penghindaran pajak. Penelitian ini mengindikasikan bahwa perlu adanya koordinasi antara Otoritas Perpajakan Indonesia dan Otoritas Pengawas Pasar Modal Indonesia terkait dengan penguatan peran komisaris independen dalam fungsi pengawasan kepada perusahaan emiten.

Taxes and Haven Activities: Evidence from Linguistic Cues

Users of Exhibit 21 cannot tell whether a tax haven subsidiary is actively operating or a dormant shell company. In this paper, we develop a new set of parsimonious measures to highlight the distinct mechanisms and tax effects of offshore sales to, as opposed to purchases from, tax haven countries, offering insights on the effects of certain types of offshoring activities on firms’ tax burdens. Our main measure has about three times the effect of the mere existence of a haven subsidiary in explaining firms’ effective tax rates. We detail the processes to predict the offshore activities in tax haven countries for firms without an Exhibit 21 and firms reporting no subsidiary operations in a tax haven country. Relative to the mere mention of a tax haven subsidiary in Exhibit 21, our new measures provide a richer information set to capture different types of economic activities in tax haven countries.

The Internet as a Tax Haven?

If online transactions are tax free, increased online shopping may lower tax rates as jurisdictions seek to reduce tax avoidance; but, if online firms remit taxes, online sales may put upward pressure on tax rates because internet sales help enforce destination-based taxes. I find that higher internet penetration generally results in lower municipal tax rates but raises tax rates in some jurisdictions. The latter effect emerges in states where many online vendors remit taxes. A 1 standard deviation increase in internet penetration lowers local sales taxes in large municipalities by 0.15 percentage points, or 16 percent of the average rate. (JEL H25, H26, H71, L81, R51)

IPOs and Corporate Taxes

How does going public affect firms’ tax obligations and tax planning? Using a panel of U.S. corporate tax return data from 1994 to 2018, we compare tax payments for firms that completed an IPO with those that filed for an IPO but later withdrew and remained private. We find that in the years immediately following IPO completion, firms have a higher probability of paying taxes and pay more U.S. tax. The effects occur regardless of tax status in the pre-IPO period and are not explained by statutory limitations imposed on the use of pre-IPO losses. Higher income reported for financial reporting purposes, as well as lower interest deductions attributable to debt repayment, contribute to the increased tax payments. These increases are partially offset by higher tax deductions for post-IPO investment and employment spending. Furthermore, the IPO is associated with increased tax planning through foreign tax haven use. The evidence adds to the nascent literature examining corporate tax implications of the IPO decision.

The Firm-Specific Factors Influencing the Tax Haven Operations of Indian Multinationals

The present study measures the role of firm-specific factors influencing the likelihood of establishing a subsidiary in tax haven countries. The panel data of Indian companies, which have business operations in foreign countries, are used for the study. The firm-level data for the period from 2007 to 2018 are analysed by using binary logistic regression model. The result shows that the intangible assets, long-term debt, number of subsidiaries and service sector dummy have significant and positive impact on tax haven operations of multinational companies, but the experience of the firm and return on equity are insignificant, and a firm’s size deters the likelihood of setting a tax haven subsidiary. The results also show that firms from high-technology manufacturing and knowledge-intensive sector have more influence on the likelihood of owning a tax haven subsidiary by Indian multinationals. JEL Codes: F21, F23, H25, H26

The Use of Tax Havens by MNEs in Business Clusters: A Cross-country and Firm-level Analysis

This paper examines the use of tax havens by MNEs located in business clusters versus their non-cluster counterparts. We extend the knowledge-based theory to construct a number of empirical hypotheses that are tested using dichotomous choice models. The firm-level dataset covers 21,389 MNEs from 5 OECD countries during the years 2009-2017. We find evidence that MNEs, who are part of a business cluster use tax haven subsidiaries to a greater extent compared with MNEs, who are not part of a business cluster. This association continues to hold whilst controlling for other important factors that drive tax haven FDI. Additional insights suggest that firm age, size and technological sophistication can impact the magnitude of the correlation between MNEs in business clusters and their tax haven activity. The findings of this paper shed more light on the use of tax havens among MNEs in their international business operations and have important implications for policy makers and managers.

Analisis Determinan Transfer Pricing pada Perusahaan Multinasional yang Terdaftar di Bursa Efek Indonesia

Penelitian ini bertujuan untuk menganalisis pengaruh Multinasionalitas, Tax Haven dan Thin Capitalization terhadap Transfer Pricing. Sampel dalam penelitian ini adalah seluruh perusahaan multinasional yang terdaftar di Bursa Efek Indonesia dari tahun 2016 hingga 2019 selain sektor keuangan, asuransi, pertambangan dan properti. Jumlah data yang sesuai dengan kriteria sampel adalah 260 data yang terdiri dari 65 perusahaan untuk tiap tahunnya. Metode analisis yang digunakan dalam mengolah data menggunakan analisis linier berganda. Penelitian ini menggunakan program Statistical Package for Social Sciences (SPSS). Hasil penelitian menunjukkan bahwa multinasionalitas dan tax haven tidak berpengaruh terhadap transfer pricing, dan thin capitalization berpengaruh positif terhadap transfer pricing.