This paper investigates the relationship between corporate income tax rates (CITR) and firm-level productivity growth using AMADEUS data of 304,410 observations from 79,842 European firms from 2006 to 2019. The results imply a robust non-linear relationship: higher CITRs are positively...

This paper investigates the relationship between corporate income tax rates (CITR) and firm-level productivity growth using AMADEUS data of 304,410 observations from 79,842 European firms from 2006 to 2019. The results imply a robust non-linear relationship: higher CITRs are positively...

We study the optimal taxation of corporate and dividend income when entrepreneurs can use retained earnings to reduce their tax burden. We show that eliminating dividend taxes while increasing the corporate income tax (CIT) to keep investment unchanged raises total tax revenue. Our simulations...

In recent years, a growing number of countries have enacted tax rules that require multinational enterprises (MNEs) to document their intra-firm trade prices and show that they are set as in third-party trade. The objective of these rules is to limit opportunities for strategic trade mis-pricing...

This study examined how a company's tax exposure, conceptualized as a capital structure decision factor, influences the financial performance of state-owned sugar manufacturing corporations in Western Kenya. Grounded in Modigliani and Miller's capital structure model and drawing on trade-off,...

Die Fraktionen von CDU, CSU und SPD planen im Investitionssofortprogramm die Abschreibungsbedingungen für Ausrüstungsinvestitionen zu verbessern, Forschung und Entwicklung stärker steuerlich zu fördern sowie die betriebliche Nutzung von E-Autos steuerlich besser zu stellen. Das Paket könnte...

Although citizens value competitive markets and support small businesses, we observe substantial variation in market concentration. Why do politicians abstain from taking action to reduce concentration? We propose an often overlooked political benefit to concentrated markets: When concentration...

How do corporate tax systems shape the boundaries of the firm? This paper shows that nonlinear corporate income taxation can distort firms' organizational structures by inducing tax-motivated firm splitting. I use administrative data on corporations and their owners and exploit two reforms that...

What leads self-employed entrepreneurs to incorporate? I examine how tax incentives interact with the cost of incorporation to answer this question. I exploit the abolition of minimum capital requirements to set up a limited liability company in the Netherlands and compare entrepreneurs that...

In this paper we theoretically analyse the European Union's ongoing political impasse regarding the choice of a single method to allocate multinational enterprises' profits across countries and we find that this strategic situation resembles a coordination game with distributional consequences....

This study examines how the appointment of independent directors after a CEO assumes office (co-opted directors) affects corporate tax avoidance. While formally independent, such directors may be more aligned with the CEO, potentially weakening board oversight. Using a panel of 7084 U.S....

This study examines the real effects of earnings stripping rules introduced in the European Union in 2019, which tie interest deductibility to contemporaneous profitability. Exploiting a quasi-natural experiment created by the EU's harmonized implementation under the Anti-Tax Avoidance Directive...

As corporate income tax rates have fallen across the world, other capital taxes become more important. This paper studies the choice between income taxation at the corporate and shareholder level. I develop a sufficient-statistics framework to determine optimal tax reforms. The main result is...

We examine changes in the corporate tax rate across the U.S. and their implications on the pricing and quantity of loans. We find that the cost of credit decreases (increases) by approximately ten (nine) basis points in response to a one percentage tax cut (hike). The estimates are more...

This paper documents the rise of corporate tax-base narrowing measures in the EU using a novel dataset covering both tax rate and tax base reforms implemented between 2014 and 2022. Our findings indicate a shift away from the ’cut rate – broaden base’ approach, as governments increasingly...

We provide novel evidence on the incidence of business taxes using comprehensive survey and experimental data from German firms. Leveraging randomized variation in hypothetical tax changes, we find that the incidence of profit taxes is highly asymmetric. Tax decreases are more likely to benefit...

Corporate taxation assumes a pivotal role in all economies, as it constitutes a substantial source of revenue for governmental agencies tasked with fulfilling social obligations. Nonetheless, modifications in financial policies and the unpredictability of macroeconomic factors result in a...

Tax expenditures are tax relief measures targeted at some socially desirable activities or specific groups of taxpayers. This paper reviews issues related to tax expenditures in the EU and presents some stylised facts related to tax expenditures in personal income taxation (PIT), value-added...

Effective policymakers must balance the demands of formulating a corporate tax system that raises revenue and spurs economic activity (e.g., investment) while promoting a "level playing field" across firms. Balancing these tradeoffs has likely caused tax systems to become more complex over time,...

A broad empirical literature examines the impact of corporate taxes on firms' investment, location, and tax avoidance behaviour. Other corporate adjustment margins have received little attention. In this paper, we use administrative customs and tax return data from South Africa to demonstrate...

We extend Trade-Off Theory (TOT) by assuming that EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization), rather than EBIT (Earnings Before Interest and Taxes), follows a Geometric Brownian Motion (GBM), and we thus consider the role of tax depreciation allowances (TDA) in...

This study examines the impact of vertical interlock on corporate tax avoidance in business groups using data on Chinese listed companies from 2003 to 2019. We find that vertical interlock has a negative impact on corporate tax avoidance. Our result is robust to alternative measures,...

Die Fraktionen von CDU, CSU und SPD planen im Investitionssofortprogramm die Abschreibungsbedingungen für Ausrüstungsinvestitionen zu verbessern, Forschung und Entwicklung stärker steuerlich zu fördern sowie die betriebliche Nutzung von E-Autos steuerlich besser zu stellen. Das Paket könnte...

We study how the OECD transfer pricing guidelines aimed at curbing tax-motivated transfer pricing practices affect investment incentives. Our theoretical model integrates the different OECD's transfer pricing methods into the tax planning cost function of an MNC to evaluate how the choice of...

This Perspective discusses the fiscal and economic impacts of the global minimum tax; currently being implemented by many countries around the world. The global minimum tax is expected to raise tax revenues, reduce profit-shifting, and allow jurisdictions to strike a better balance between...

The effective corporate tax rate is a critical measure reflecting a nation's fiscal policy and its attractiveness to foreign investment. This study investigates the relationship between macroeconomic determinants and effective corporate tax rates, focusing on Slovakia's competitiveness within...