Tax Adviser Research Articles

RETRACTION NOTICE: Promotion of Tax Culture through Tax Advisory Centers

Retraction note: Crespo García, M., & Romero Lalangui, M. A. (2023). Promotion of Tax Culture through Tax Advisory Centers. TECHNO REVIEW. International Technology, Science and Society Review Revista Internacional De Tecnología, Ciencia Y Sociedad, 15(1), 2–15. https://doi.org/10.37467/revtechno.v14.4834 The Editorial Office of Eurasia Academic Publishing Group has retracted this article. An investigation carried out by our Research Integrity Department has found a group of articles, among which this one is found, that are not within the thematic scope of the journal. We believe that the editorial process was manipulated and, furthermore, acceptance decisions were made under possibly inappropriate peer review.

Shaping the Future of Tax Advisory Using Artificial Intelligence

Shaping the Future of Tax Advisory Using Artificial Intelligence

Is aggressive tax planning a failure of tax adviser integrity?

PurposeThis paper aims to address the fundamentals of tax planning and seeks to focus on the opportunities and root causes for tax planning.Design/methodology/approachThe paper reviews the current state of tax planning with case studies that reveal fundamental statutory structural opportunities.FindingsWhile some, possibly many, tax advisers lack integrity and recommend tax structures to their clients that are inconsistent with reasonable interpretations of the tax law, most advisers, even very aggressive and creative advisers, probably do not. The paper suggests that it may be futile to seek to deter tax professionals from designing and marketing tax plans unless legislation makes tax advisers jointly responsible with their clients for their clients’ tax underpayments.Practical implicationsShort of such a radical approach, governments must commit first to altering the basic structure of their tax laws to make aggressive tax planning uninviting.Originality/valueThe paper offers original insights into the inseparability of the legislative process from the creation of unnecessary tax planning opportunities.

Tackling BEPS in the Global South: Evidence from Peru’s tax reform

This study assesses the effect of a transfer pricing reform on tax payments at the firm level. Given the critical role that the consulting firms play in tax avoidance schemes, we include the effect of expenditure on tax advisory. Exploiting the reform’s particular features, we use a regression discontinuity design to estimate the causal effect of the tax reform. We find that firms affected by the intervention on average paid more taxes in 2017. Although we do not find effects for 2018, we find no conclusive evidence that spending on tax advisory drove such an effect.

Abstract P510: Increase in Obesity Reduction Initiatives in San Francisco After Sugary Beverages Tax Implementation

A diet high in sugar sweetened beverages (SSB, has been shown to be associated with adverse health outcomes. Several cities across the US have implemented SSB taxes to decrease consumption and distribution of sugary drinks. Revenues generated from taxes were often allocated to fund public health programs and enhancements to reduce obesity. We examined efforts in San Francisco where the Sugary Drinks Distributor Tax (SDDT or “soda tax”) was implemented in 2018. SDDT legislation mandated the establishment of the Sugary Drinks Distributor Tax Advisory Committee (SDDTAC), responsible for making annual recommendations for the allocation of tax-generated revenues. We reviewed SDDTAC recommendations and funding for new and existing services that support public health through reduction and prevention of diet related diseases. We assessed if there was a significant increase in funding and number of health promotion programs implemented in San Francisco after the implementation of the SDDT. We documented obesity prevention initiatives resulting from increased tax revenue. We reviewed city government budget documents and press releases at least 1 year before tax implementation (2017) and 4 years post (2018-2022). We cataloged initiatives for adults and children including health education, nutrition and lifestyle, and community projects. The first full year of SDDT implementation (2018-19) saw the highest revenue generated at $16,097,908. Total revenue for the implementation period (2018-2021) was reported as $42,415,548. The revenue generated in the first six months of fiscal year (FY) 2018 was spent in FY2019-2020. During that period, the San Francisco Public Health Foundation awarded 26 one-year SDDT community grants - aligning with priority expenditure categories for SDDTAC - totaling $1,702,211. SDDTAC priority categories include decreasing consumption of sugary drinks, increasing water consumption, oral health, healthy food access, physical activity, and other (e.g. research/Community-Based Participatory Research, new innovations, etc.). [ACV1] In FY2019-2020 78% of SDDT revenues were spent on Healthy Communities, oral health, Healthy Food Purchasing Supplement grants and SF City Funded Agencies’ programming. The remaining 22% were spent on social media grants, infrastructure, and administrative costs. To address COVID-19, $1.65 million of unused funds from FY2019-20 supported food security and food distribution for vulnerable populations. Tax generated funding for 65 new or existing programs since implementation. New programs are funded each year: five new Policy Systems and Environmental Change programs were funded in FY2019-2020 and one new school-based program funded in FY2021-22. We observed a significant increase in number of health programs in San Francisco since SDDT implementation.

Local Tax Advisory Firm Boundaries and Client Tax-Motivated Income Shifting: Evidence from PwC Europe

Local Tax Advisory Firm Boundaries and Client Tax-Motivated Income Shifting: Evidence from PwC Europe

Personal Tax Planning: Reviewing a Will—Tax Considerations for Non-Legal Advisers

A will is a critical part of an estate plan. A tax adviser must frequently review a client's will as part of the estate-planning process. To review a will confidently, the tax adviser should have an understanding of the standard provisions of a will and thus be able to comment on the tax implications of the document. The objective of this article is to provide comments on the broad structure of a standard will and the tax issues to be considered and addressed as part of a will review, from the perspective of a tax adviser without legal training.

The Role of Tax Adviser in Tax Planning and Compliance of Taxpayers

The Role of Tax Adviser in Tax Planning and Compliance of Taxpayers

The CFE’s Contribution to European Taxation’s 60th Anniversary Issue: 60 Years of Tax Advisory Work in the Area of EU Tax Policy

In this note, the CFE comments on 60 years of tax advisory work in the area of EU tax policy. The CFE emphasizes that effective cooperation between tax advisers implies a stronger impact on EU and international tax developments, and hence a more robust protection of taxpayer rights. This is particularly important in the face of the current challenges facing the tax advisory community, such as the digitalization of the economy.

Tax Advisors and Tax Aggressiveness: A Bargaining Model

We study the bargaining game between a tax agency and a tax advisor-taxpayer team. Specifically, we focus on the factors that motivate tax aggressiveness, and the role of tax advisors in tax aggressiveness. We begin by characterizing the conditions under which tax advisors would give aggressive advice to their clients. Next, we analyze the optimal number of bargaining rounds for the tax agency. Third, we study the counteroffers that the tax agency makes in each round of the bargaining game. In addition, we investigate the conditions under which a high-tax taxpayer type would hire a reputable tax adviser. Last, we analyze when would the taxpayer accept or reject the tax advisor’s recommendation.

Impact of Tax Advisers and Corrupt Tax Auditors on Taxpayer Compliance

Using two experiments, this study examines taxpayers' decisions on how much income to report in the presence of tax auditors and post-reporting tax advisers, respectively. In the first experiment, we examine taxpayers' compliance in the presence and absence of corrupt auditors. In the second experiment, we examine taxpayers' compliance in the presence of corrupt tax auditors and compare it with their compliance in the presence of tax advisers retained by the taxpayers upon being audited. The bribes sought by corrupt auditors from audited taxpayers are expressed in the form of a percentage of taxes and penalties payable. The sequence of events in the first experiment is as follows: (1) the taxpayer decides what percentage of income to report to the tax authority; (2) the taxpayer finds out whether or not he or she is audited; and (3) the taxpayer pays any unpaid taxes and penalties if audited by a non-corrupt auditor, or decides whether to pay a bribe if the auditor is corrupt. In the second experiment, step 3 is replaced by the taxpayer having to decide whether to bribe the corrupt tax auditor without hiring a tax adviser, or to retain a (dispute resolution) tax adviser in the absence of a corrupt tax auditor to contest the penalties and underreporting of income. Participants' learning from earlier rounds of the experiment can affect their reporting choice in subsequent rounds. The results of our first experiment show that overall taxpayer compliance is reduced in the mere presence of a corrupt tax auditor, even when bribe-seeking may offer no net after-tax monetary benefits to the taxpayers. This demonstrates the corrosive effects of corrupt auditors. Taxpayer compliance declines even further when taxpayers receive net monetary benefits from bribing the corrupt auditor. The second experiment examines whether the involvement of a professional tax adviser increases or decreases the percentage of income reported compared to the baseline compliance in the presence of a corrupt tax auditor. If the tax adviser serves as a gatekeeper and moral authority, the percentage of income reported by the taxpayer client could increase in the presence of a tax adviser. However, if the tax adviser effectively serves to simply override the tax penalties imposed on the taxpayer, the percentage of income reported by the taxpayer client could decrease. Our experimental results show that in the absence of corrupt auditors, tax advisers are better at improving taxpayer compliance compared to the baseline compliance in the presence of a collusively corrupt tax auditor. This suggests that tax advisers do serve as moral gatekeepers for the tax system.

Auditor-Provided Tax Services and Clients’ Tax Avoidance: Do Auditors Draw a Line in the Sand for Tax Advisory Services?

Recent incidences of audit failures and tax aggressiveness linked to non-audit services have called into question audit firms’ compliance with current restrictions on the provision of aggressive tax planning to their clients. This study investigates whether U.S. audit firms comply with existing regulations. Using quantile regressions, we observe an upper bound in the positive association between auditor-provided tax services (APTS) and tax avoidance. We interpret this bound as evidence of audit firms’ compliance. Interestingly, we observe that the association turns negative for clients with low effective tax rates. This nonlinearity suggests that audit firms take steps to reduce their exposure to these clients. Whereas our main results demonstrate some compliance, trend analysis shows an increase in tax avoidance associated with APTS during our sample period. We also find a more persistent association for larger clients, suggesting that economic bonding influences the tax strategies an audit firm is willing to provide.

Impact of Tax Advisors and Corrupt Tax Auditors on Taxpayer Compliance

Using two experiments, this study examines taxpayers' decisions on how much income to report in the presence of tax auditors and post-reporting tax advisers, respectively. In the first experiment, we examine taxpayers' compliance in the presence and absence of corrupt auditors. In the second experiment, we examine taxpayers' compliance in the presence of corrupt tax auditors and compare it with their compliance in the presence of tax advisers retained by the taxpayers upon being audited. The bribes sought by corrupt auditors from audited taxpayers are expressed in the form of a percentage of taxes and penalties payable. The sequence of events in the first experiment is as follows: (1) the taxpayer decides what percentage of income to report to the tax authority; (2) the taxpayer finds out whether or not he or she is audited; and (3) the taxpayer pays any unpaid taxes and penalties if audited by a non-corrupt auditor, or decides whether to pay a bribe if the auditor is corrupt. In the second experiment, step 3 is replaced by the taxpayer having to decide whether to bribe the corrupt tax auditor without hiring a tax adviser, or to retain a (dispute resolution) tax adviser in the absence of a corrupt tax auditor to contest the penalties and underreporting of income. Participants' learning from earlier rounds of the experiment can affect their reporting choice in subsequent rounds. The results of our first experiment show that overall taxpayer compliance is reduced in the mere presence of a corrupt tax auditor, even when bribe-seeking may offer no net after-tax monetary benefits to the taxpayers. This demonstrates the corrosive effects of corrupt auditors. Taxpayer compliance declines even further when taxpayers receive net monetary benefits from bribing the corrupt auditor. The second experiment examines whether the involvement of a professional tax adviser increases or decreases the percentage of income reported compared to the baseline compliance in the presence of a corrupt tax auditor. If the tax adviser serves as a gatekeeper and moral authority, the percentage of income reported by the taxpayer client could increase in the presence of a tax adviser. However, if the tax adviser effectively serves to simply override the tax penalties imposed on the taxpayer, the percentage of income reported by the taxpayer client could decrease. Our experimental results show that in the absence of corrupt auditors, tax advisers are better at improving taxpayer compliance compared to the baseline compliance in the presence of a collusively corrupt tax auditor. This suggests that tax advisers do serve as moral gatekeepers for the tax system.

1950년대 후반 세제개혁과 미국 조세고문단의 활동

Analyzed in this article is the tax reform plan that progressed in the second half of the 1950s, as well as the activities of the U.S. Tax Advisory Group at the time, in order to determine how the government mobilized private individual capital to use it in national governance. At the time, the Korean government was determined to enhance national defense, and aspired for a national economic development based upon large businesses, foreign capital as well as a certain sacrifice on the general public’s part. Prior studies of the 1950s’ tax system evaluated it as the beginning of an unfair tax system, based upon economic analyses of the items -upon which taxes were levied- and their individual percentages (inside the tax system). As such analyses were based upon a chronological overview of changes which occurred in Korean economic policies, prior studies based upon that perspective contributed to defining the nature of the government’s policy-wise response to both domestic and foreign changes that were happening in the 1950s. There are, however, additional elements other than tax items and percentages to be accounted for in the task of evaluating the nature of an entire tax policy. Tax policy usually reflects the primary aim of the government itself, so the government’s series of choices that led to such policy should be evaluated, in terms of both its background and the process of discussion. Newly revealed in this article are as follow: First, general discourses -concerning tax operation directives- which had been floating around since the liberation in 1945 shows us that the Korean government was clearly aspiring for an ‘unfair’ tax system based upon the public’s sacrifice, in the name of aiming for efficient allocation of resources. Second, the U.S. government, while cutting its aids for Korea, did dispatch an advisory group and had them influence the Korean economic policy to move in a specific direction that would befit the U.S. foreign policy in general. Third, the Korean government accepted the counsel of the advisory group, and this became the backbone of the business-centric economic management which we have today.

Post-BEPS Tax Advisory and Tax Structuring from a Tax Practitioner’s View

textabstractThe international tax landscape is changing and it is changing fast. The political perception is that taxation of multinational enterprises is not aligned with the ‘economic activity’ that produces their profits (i.e. not aligned with ‘value creation’). The perception links ‘value creation’ with ‘employees and sales’. In the BEPS Project of the OECD, the OECD attempts to combat base erosion and profit shifting and to align taxation with value creation. In this article, the authors discuss the impact they expect BEPS to have on tax advisory and tax planning. The focus goes to BEPS Actions 7, 8-10 and 13. By maintaining the separate entity approach under BEPS for the taxation of multinationals, has the OECD been forced to ‘stretch’ existing rules beyond their limits? Will the created uncertainty lead to a shift from ‘aggressive tax planning’ by multinationals to ‘aggressive tax collection’ by tax administrations? Will the role of tax advisory change from advising on the lowest possible effective tax rate to a broader advice including risk appetite and public expectations?

Responsabilidad del asesor fiscal en el fraude fiscal

El objetivo del presente trabajo de fin de Grado en Derecho, es establecer el marco de referencia legal en el cual se definen las responsabilidades asociadas al ejercicio de la actividad profesional de los asesores fiscales. Para lo cual comenzaremos con una introducción, en la que abordaremos las problemáticas en cuanto a la definición de asesor fiscal, así como los desafíos que hacen necesaria la implantación, y posterior desarrollo de la figura. Seguidamente, describiremos de una manera somera el sector económico de la asesoría fiscal. A continuación, analizaremos la responsabilidad tributaria del asesor fiscal y la responsabilidad penal del asesor fiscal derivada del delito de defraudación tributaria. Por último, analizaremos la normativa actual de blanqueo de capitales, así como su incidencia en el desarrollo de la profesión del asesor fiscal, haciendo especial hincapié en las dudas, o directamente problemas, que han sido ocasionadas por la nueva regulación sobre la materia, y realizaremos unas conclusiones generales.

LIETUVOS KAPITALO ĮMONĖ KAIP MOKESTINĖS BYLOS ŠALIS LENKIJOJE

A limited liability company or joint stock company with its headquarters in Lithuania can be a taxpayer of Polish direct or indirect taxes. The Lithuanian company is authorized to be a party to the proceedings before the tax authorities of first or second instance. Since the Polish tax procedure is based on the subjective or objective criterion, there are no obstacles to the proceedings regarding the Lithuanian resident taking place. Note, however, that it must be represented before the authorities by an attorney who uses the Polish language. It is best if this person is a lawyer, legal adviser or tax adviser of Polish origin. If a limited liability company based in Lithuania has its branch in Poland, a person representing a branch may appear before the tax authority. Note, however, that all the repercussions on the course and outcome of the proceedings will affect the parent entity. The fact is that the branch of the company is present in the proceedings in the name and on behalf of the founding company. The lack of current regulations on deliveries in tax proceedings specifically relating to foreign taxpayers should be regarded as a de lege lata application. There is a possibility of delivering the letter by means of electronic communication. However, the taxpayer must already be familiar with complex rules relating to this method of delivery and meet its formal requirements. The need to extend the statutory definition of the taxpayer (located in the Tax Code) with a reference to entities located outside Poland was recognized as a de lege ferenda application. It is worth confirming, through legislative changes, the equality of rights and responsibilities of all taxpayers in the Polish tax procedure, regardless of their residence.

Vyvolané náklady daňového systému v ČR

The paper presents methods and results of tax compliance costs (TCC) in the Czech Republic and uses the econometric analysis to show which factors affect their size at the level of individual taxpayers. The results of the author's measurement of the TCC for the Czech Republic are following (% of tax revenue): VAT 4,5; CIT 5,5; PIT on employees 3,0; PIT on self-employed 34,4; SSC 1,5-3,5. The econometric analysis of the factors affecting the level of TCC shows the regressive character of these costs. However the decreasing of a relative value of TCC gradually slows down for large taxpayers. The analyses also show statistical signifi cance of the relationship between TCC and costs for external tax advisory. Hiring external actors is therefore more expensive than similar activities ensured by own employees (in- house service). Firms that consider the tax system is complex have on an average higher relative TCC than others. The opposite relationship was identifi ed for tax administration: fi rms that are less satisfi ed with administrators have lower relative TCC.

Legal Regulation of Tax Advisory Services in Relation to Their Quality

This article analyzes the suitability of the legal regulation of tax advisory services in relation to their quality based on our comparative analysis of the (non)regulation of tax advisory services in selected EU states, our analysis of the existing regulatory framework in Slovenia, as well as stakeholders’ opinions. We use the results of all three analyses to propose an optimal model of regulation of the profession and the level of regulation, centred on the need to ensure quality services for clients, service providers, the state, and society as a whole. The key finding is that greater regulation would improve the quality of tax advisory services, which is important not only for clients of services, but also the public interest as it increases confidence in tax returns and financial statements prepared by tax advisors, which in turn improves the economy and mitigates operative risks.

Opinion Statement of the CFE on the Case Law of the European Court of Justice on Transfer Pricing Related to Loans (Decision of 21 January 2010 in Case C-311/08, SGI)

This is an Opinion Statement prepared by the ECJ Task Force Members of the Task Force are: Axel Cordewener, Paul Farmer, Daniel Gutmann, Volker Heydt, Eric Kemmeren, Michael Lang, Franck Le Mentec, Pasquale Pistone, Albert Raedler, Stella Raventos-Calvo (Chair), Isabelle Richelle, Friedrich Roedler and Kelly Stricklin-Coutinho. The views expressed in this statement do not necessarily represent the views of each individual member of the Task Force or of organisations with which any of the members are associated. of the CFE. The CFE is the leading European association of the tax profession with 33 national tax adviser organisations from 24 European countries representing over 180,000 tax advisers.