Corporate Tax Burden Research Articles

Capital market access and innovation efficiency: A natural experiment from China’s pilot VAT reform in 2012

This study analyzes the evolution of how seasoned equity offerings in the Chinese stock market affect corporate technological innovation by considering the easing of financing constraints through a reduced corporate tax burden. We use 2007–2016 data on listed manufacturing firms registered in the Chinese provinces and cities where a pilot reform program that replaced the business tax with a value added tax (VAT) was implemented in 2012. We explore the changes in and causes of the impacts of seasoned equity offerings on corporate R&D investment, technological innovation output, and technological innovation efficiency before and after the implementation of the pilot reform. Our empirical findings are as follows. (1) Generally, the seasoned equity offerings of listed firms in the manufacturing industries have a significantly positive effect on the firms’ current R&D investment and subsequent technological innovation output. (2) This positive effect shifts along with changes in corporate financing constraints and the dimensions of technological innovation. The pilot VAT reform has significantly changed how manufacturing firms’ seasoned equity offerings affect their R&D investments and technological innovation output. The positive effects of seasoned equity offerings on corporate R&D investment increase after the pilot reform, while the positive effects on the output of technological innovation decrease. (3) Finally, we find that seasoned equity offerings have a negative impact on firms’ technological innovation efficiency after the pilot VAT reform. Corporate governance plays a prominent role.

Investment allocation in Slovakia and Ukraine in terms of effective corporate tax rates

Since countries differ in their traditions, cultures or different tax systems, investment allocation can be a difficult task for some investors. Effective tax rates present indicators of the real corporate tax burden and consider the impact of all legislation elements. This paper deals with the effective taxation of selected intangible and tangible assets. The analysis will be processed by calculating average and marginal tax rates (EATR and EMTR) according to the methodology of the Centre for European Economic Research (ZEW). Then, the relationship between these two tax rates was calculated, and the relationship was identified that evaluates the most optimal criteria between location, amount and source of investment financing. The analyzed period is the year 2020. The analysis is a quantification of the amount of the tax rates for a hypothetical investment. The next step in the analysis is a calculation of the tax shield, which expresses tax saving of investment and the economic income of project, including taxation, and means financial benefit for an investor. The results have shown that Ukraine is a better choice for the investor, as this country reached lower values of effective tax rates for all other types of assets, except land, than Slovakia. In the case of own funds financing, there is a difference between 10.7% and 11.6%, and in the case of debt financing, the difference ranged from 10.8% to 11.7%. The exception was land, the rates for which were higher than in Slovakia by 0.70%. This paper has confirmed the research hypothesis that Ukraine is a more tax-attractive country than Slovakia. AcknowledgmentThis research was supported by VEGA project No. 1/0430/19 “Investment decision-making of investors in the context of effective corporate taxation”.

Local government debt pressure and enterprise tax burden in China

This study examines the relations between local government debt pressure and corporate tax burden in China, using the data of China’s A-share listed companies from 2009 to 2018, which turns out that there is a positive correlation between the two. Further examination revealed that the relationship between local government debt pressure and corporate tax burden is more pronounced in the sample of listed companies that belong to the state-owned holding companies, enterprises in eastern China, and the strong market allocation of economic resources. The research conclusion of this article supplements the theory and empirical study of the effect of the macro-financial system on the economic behavior of micro-enterprises, and also deepens the academic inquiry about the macro-environmental impact on the comprehensive tax burden of enterprises.

The German Trade Tax in Inbound Cases

This article describes the German Trade Tax Act and its impact on investment into Germany. Recent developments have highlighted the importance of this issue. The German corporate tax burden, at 15%, is quite low but trade tax can easily add a 15%-18% tax burden on investment returns. In inbound cases, a German domestic permanent establishment is typically avoided. In particular, in situations in which foreign taxpayers rent out or lease real estate in Germany, trade tax has become a significant burden. In some instances, a trade-off with the ability to rollover capital gains may have to be made.

GAZDASÁGI TÁRSASÁGOK ADÓTERHÉT BEFOLYÁSOLÓ TÉNYEZŐK VIZSGÁLATA

A vállalkozások széles körének megadóztatása komoly kihívást jelent napjaink gazdasági, társadalmi életében. A tanulmány aktualitását jelzi, hogy az elmúlt években hazánk adózási rendszerében átalakítások zajlottak le. A kutatás során a vállalatokat érintő nyereségadó teher mértékét az adókedvezmények figyelembevételével analizáljuk. A vállalati szektor adatait három oldalról közelítve vizsgáljuk, melynek során statisztikailag igazolható kapcsolatokat keresünk az adózás előtti eredmény, az igénybevett adókedvezmények és a fizetendő adó között. Megvizsgáljuk, hogy a vállalkozások adóterhében milyen regionális, illetve település szerinti differencia lelhető fel. Az adóbevételek területi megoszlása erősen koncentrált. Felmerül a kérdés, hogy vajon milyen mértékben befolyásolja a térség fejlettsége az igénybevett adókedvezmények arányát. Az eredményeinkben településenként és vállalkozásonként lényeges eltérés tapasztalható a vállalkozások társasági adóterhében.

Endogenous cyclical corporate tax burden in China: The role of tax quotas and growth targets

AbstractUsing data from China Annual Survey of Industrial Firms and addressing potential endogeneity problem, we find that corporate tax burden in China is procyclical during recessions and countercyclical during booms. The cyclicality is stronger for enterprises whose corporate income taxes are levied by Local Tax Bureau (LTB). Procyclicality of corporate tax burden during recessions is larger for enterprises located in county, non‐state‐owned enterprises (non‐SOEs), non‐high‐tech enterprises and large‐medium enterprises. Furthermore, tax quotas and growth targets of local governments enhance procyclicality during recessions and the countercyclicality of corporate tax burden during booms. Tax collection and government spending are important channels through which tax quotas and growth targets affect the cyclicality of corporate tax burden, respectively. This paper provides important policy implications for China during economic recessions.

The Impact of Tax Burden on Enterprises’ Innovation Input——An Empirical Analysis Based on Tax Avoidance Incentives

This paper studies the impact of corporate tax burden on the next level of innovation input. Taking the listed companies in China’s GEM from 2009 to 2017 as the research object, this paper finds that the tax burden of enterprises has an incentive effect on the next innovation input level. Further research finds that, compared with state-owned enterprises, the tax burden of non-state-owned enterprises has a stronger incentive effect on the next innovation input level.

Gubitak pre oporezivanja i porez na dobitak - primer banaka iz Srbije

It is usually considered that banks with income before taxation pay corporate tax, while banks with loss before taxation do not. However, it is possible that a bank with loss before taxation incurs corporate tax expense due to the separate calculation of result before taxation in income statement and taxable income in the tax balance. This paper examines why and to which extent banks with loss before taxation have a corporate tax burden. Empirical research captured the whole banking system of Serbia in period between 2013 and 2018. In this regard, a sample of 175 observations was formed. Research results show that the inclusion of observations with loss before taxation significantly impacts the estimation of corporate tax burden of the banking sector of Serbia. In addition, capital gains tax is the most common source of corporate tax burden in observations with loss before taxation. On the other hand, the adjustment of expenses and revenue in tax balance has less impact on corporate tax burden in observations with loss before taxation.

Utjecaj poreza na dobit na kretanje izravnih stranih ulaganja u zemljama članicama Europske unije

Većina raspoloživog kapitala nalazi se u posjedu pravnih osoba, odnosno poduzeća (najčešće multinacionalnih kompanija) sklonih ulaganju u širenje vlastitog poslovanja, što ne donosi samo dodatno uvećanje profita poduzeća, već indirektno utječe i na povećanje zaposlenosti, rast gospodarstva, razvoj domaćeg financijskog tržišta te općeniti napredak države. Zato države širom svijeta aktivno utječu na formiranje povoljnog poslovnog okruženja koje će imati učinak na povećan priliv izravnih stranih ulaganja (Foreign Direct Investments – FDI). Cilj ovog rada je utvrditi utjecaj oporezivanja dobiti na privlačenje izravnih stranih ulaganja u zemljama članicama Europske unije. Statička panel analiza provedena je za razdoblje od 1998. do 2017. godine na 28 zemalja članica u cjelini, te posebno na starim članicama (EU 15) i novim članicama (EU13). Uz različite kontrolne varijable, kao nezavisna varijabla analizirane su različite stope poreza na dobit – zakonska (službena, nominalna) stopa poreza na dobit i efektivne (prosječna i granična) porezne stope u cilju ispitivanja stvarnog poreznog opterećenja trgovačkih društava i njihovog utjecaja na kretanje izravnih stranih ulaganja. Zaključeno je kako porez na dobit značajno utječe na kretanje izravnih stranih ulaganja trgovačkih društava u novim zemljama članicama Europske unije (koje karakterizira niže porezno opterećenje), ali ne kao primarni čimbenik, pri čemu se ističe društveni proizvod. U tom kontekstu najveći utjecaj ima efektivna prosječna porezna stopa.

Corporate Taxation and the Distribution of Income

Higher corporate taxes reduce corporate business operations, replacing them with operations by noncorporate businesses that are risky and have undiversified ownership. This shift contributes to income dispersion, with effects so large that higher corporate taxes can increase income inequality even when the corporate tax burden falls entirely on capital owned disproportionately by the rich. Estimates suggest that the riskiness of U.S. noncorporate business increases by 12.3% the aggregate income of the top one percent, and that income dispersion created by a higher U.S. corporate tax rate offsets more than half of the distributional effects of reducing average returns to capital. Institutional subscribers to the NBER working paper series, and residents of developing countries may download this paper without additional charge at www.nber.org.

경영자 재량권과 법인세부담 간의 관련성

경영자 재량권과 법인세부담 간의 관련성

CORPORATE TAX AVOIDANCE: A LITERATURE REVIEW AND RESEARCH AGENDA

AbstractTax avoidance can range from reduction of the corporate tax burden by legitimate use of tax rules to violation of tax laws. In this paper, we endeavor to synthesize the major findings of tax avoidance research from the accounting and finance literatures over the past ten years. We consider theoretical developments and the related empirical findings about the interconnected issues of measuring tax avoidance, and the possible causes and outcomes of corporate tax avoidance. We present some ideas for further research to examine underexplored topics regarding tax avoidance.

주요 OECD 국가의 법인세부담에 관한 비교분석

본 연구의 목적은 거시적 관점에서 1990～2017년까지의 연간자료를 이용하여 우리나라와 캐나다, 핀란드, 프랑스, 독일, 일본, 스페인, 스웨덴, 영국, 미국 등 주요 OECD 10개국에 대해 세수의 소득탄력성[부양성]을 추정함으로써, 법인세부담을 실증적으로 분석하여 이에 대한 시사점을 모색하는 데 있다. 실증분석은 세법개정효과를 고려하지 않고, 세수의 소득탄력성[부양성]을 추정하였다. 분석결과를 주요 OECD국가들과 비교분석을 함으로써, 법인세부담에 관한 정책적 함의를 모색해 보았다.BR 실증분석 결과, 법인세의 GDP에 대한 탄력성[부양성]은 일본을 제외한 9개국에서 GDP가 증가하면 법인세의 세수가 증가하는 것으로 나타났다. 자기상관을 제거한 후 분석에서는 핀란드, 독일, 일본을 제외한 대부분 국가에서 자기상관을 제거하기 전의 결과와 비슷한 것으로 나타났다.BR 최근 미국, 영국을 비롯한 대부분 OECD국가에서 법인세를 인하하는 추세이다. 그러나 우리나라는 복지재원과 일자리 창출을 위한 재원확보를 위해 법인세를 인상했다. 우리나라의 경제상황을 감안해 볼 때, 법인세의 인상을 통한 소득재분배 개선 정책 보다는 기업의 투자를 증대시킬 정책이 더 필요할 시점이라고 판단된다.

Capital taxation efficiency of agricultural businesses in the Slovak Republic

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.

Intergovernmental revenue relations, tax enforcement and tax shifting: evidence from China

This paper provides empirical evidence on how intergovernmental revenue relations would affect governments’ incentives on tax enforcement in a developing country. By taking advantage of the exogenous shock induced by China’s corporate tax income revenue sharing reform in 2002, I find that the local governments would increase tax enforcement on local business tax and surcharges (BTS) to offset the adverse fiscal shock. In addition, such tougher tax enforcement was heterogeneous across firms. The increased effective BTS was mostly driven by non-state-owned enterprises and domestic firms. This paper further shows that the incidence of corporate tax could be passed onto workers through lower wages and benefits. On average, the share of corporate tax burden borne by workers in China is approximately 62%, which is higher than the estimate in Germany (Fuest et al. in Am Econ Rev 108(2):393–418, 2018).

Economic policy uncertainty, tax quotas and corporate tax burden: Evidence from China

This paper studies how economic policy uncertainty affects corporate tax burden. We show that economic policy uncertainty is positively related to corporate tax burden, and the effect is stronger when the tax quotas are higher. Furthermore, we find that economic policy uncertainty strengthens tax collection by increasing government fiscal pressure, thereby increasing corporate tax burden. Besides, the effects of economic policy uncertainty on corporate tax burden are primarily significant in state-owned enterprises (SOEs), non-high-tech firms, firms from the eastern areas and service industry firms. The evidence illustrates that keeping the transparency and stability of economic policies helps to cut tax burden effectively.

Strategi Diversifikasi, Transfer Pricing dan Beban Pajak

This research aims to investigate the effect of diversification strategy and transfer pricing to the corporate tax burden. The independent variables are diversification strategy and transfer pricing as well as the dependent variable is corporate tax expense. The control variables are corporate size, debt to equity ratio (DER), and return on assets (ROA). The research object is listed manufacturing companies from the year 2014-2015. This research used multiple regression analysis, with the following results: Diversification strategy and transfer pricing have a negative impact on the corporate tax expense. The corporate size has no effect, while DER and ROA influence the corporate tax expense. This research also provides an additional test that confirms the results of the main tests

Political ties and corporate tax burden in Spain

ABSTRACTThis work examines the relationship between political ties and tax burden in a sample of non-financial Spanish-listed firms during the period 2003–2013. Moreover, we analyse whether such incidence is dependent upon family control. In a context where political ties exist for business strategy reasons rather than for public policy ones, our results reveal that politically connected boards reduce tax burden. Thus, for politically connected firms, the benefits of tax avoidance strategies outweigh their associated costs and risks. Furthermore, our results also show that politically connected family firms increase tax burden. These results are consistent with family firms’ distinctive features, increasing the costs and risks derived from strategies aimed at decreasing the tax burden in the presence of political ties. Alternatively, this latter result might also be explained by a greater need to legitimise corporate behaviour using tax policy for politically connected family firms.

Value-Added Tax Reform, Markup Dispersion and Resource Allocation

As an important part of the proactive fiscal policy, tax reduction is a powerful means for a country to implement macro regulations. The Chinese government has always taken reducing the corporate tax burden as the main content of structural adjustment and growth promotion. Especially in recent years, the policy of slashing tax and fee reduction has been implemented one after another, in order to enable enterprises to really lightweight, effectively reduce their tax burden, improve their business performance, and thus drive the vitality of the whole economic market. It is undeniable that the transformation of value-added tax from production to consumption plays a crucial role in reducing the tax burden of enterprises. However, considering the significance of value-added tax reform from the view of reducing tax burden is far from enough. From a more profound perspective, tax reduction also has the role of leveling competition areas in market competition and improving the efficiency of resource allocation”. The essence of tax reduction is to improve the efficiency of resource allocation. However, little literature has examined the effect of the value-added tax reform on markup dispersion and resource allocation in manufacturing industries. Based on 1998—2007 Chinese manufacturing firm-level data and using China’s value-added tax pilot reform in 2004 as a quasi-natural experiment, this paper estimates the impact of tax deduction on markup dispersion with the difference-in-differences method. In addition, we identify the specific mechanism of price and marginal cost channels affecting markup dispersion, and test the heterogeneity of industry technology level, SOE share and capital intensity. The results indicate that tax incentive provided by value-added tax reform reduces markup dispersion significantly and improves the efficiency of resource allocation. The further mechanism analysis suggests that value-added tax reform has a larger effect on markups at higher quantiles than at lower quantiles, and flattens markup distribution through price and marginal cost channels, thus improving resource allocation in manufacturing industries. In addition, the heterogeneity analysis across industries with different SOE share, capital intensity and technology level shows that the effect is significant in high SOE share industries, labor-intensive industries and low-tech industries. Therefore, we should continue to implement the tax reduction policy and regard tax deduction as the basic path for China to deepen the reform of the fiscal and taxation system in the future, and then give full play to the important role of taxation tools in promoting economic growth, adjusting structural imbalance, and accelerating the development of transition.

Interest and tax burden on corporations in the Czech industrial and banking sector after 2008

Abstract The present paper deals with the interest and tax burden of corporations in the Czech industrial and banking sector as well as with the identification of the differences between the two sectors, including the evaluation of their developmental trends in the period after the economic and financial crisis of 2008. The interest and tax burden on business entities is determined by negative cash flows that reduce the value of their assets and equity. The basis of the research is the analysis of both components of the financial burden on corporations in these sectors over the past eight years and the identification of factors influencing their capital structure and performance. According to DuPont's equation, the burden is expressed by interest and the tax reduction of corporation's earnings before interest and taxes. The amount of the financial burden depends on the macroeconomic environment where the corporations operate. Our analysis identified an asynchronous dependence between the real payments and changes in the interest and tax rates. The reduction of both rates has had a positive effect on the performance of Czech corporations and increased their capital resources. They became more attractive to foreign investors, and the return on invested capital improved. Based on the results of the analysis, we evaluated the differences in the performance of the average corporation in the banking and industrial sectors.