Corporate Taxation Group Debt Funding And Base Erosion

Author : Gianluigi Bizioli,Mario Grandinetti,Leopoldo Parada,Giuseppe Vanz,Alessandro Vicini Ronchetti
Publisher : Kluwer Law International B.V.
Page : 386 pages
File Size : 55,7 Mb
Release : 2020-02-07
Category : Law
ISBN : 9789403512310

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Corporate Taxation, Group Debt Funding and Base Erosion by Gianluigi Bizioli,Mario Grandinetti,Leopoldo Parada,Giuseppe Vanz,Alessandro Vicini Ronchetti Pdf

The EU’s Anti-Tax Avoidance Directive (ATAD), implemented in January 2019, confronts Member States with complex challenges, particularly via the introduction of an interest limitation rule. This timely book, the first in-depth analysis of the features and implications of the directive, provides insightful and practical discussions by experts from around Europe on the crucial interactions of the ATAD with other existing anti-tax avoidance measures, the European financial sector and the fundamental freedoms. Specific issues and topics covered include the following: relation with the OECD’s Base Erosion and Profit Sharing project (BEPS) and the EU’s Common Corporate Tax Base initiative; technical subjects relating to corporate taxation and debt funding; problems caused by the diametrically opposite tax treatment of debt and equity within a group of companies; exclusion clauses for interest expenses; and interplay between interest limitation rules and anti-hybrid rules. A comparative analysis of implementation issues in four leading Member States—Germany, Italy, Spain and The Netherlands—as well as a global general survey with regard to interest limitation rules allow readers to assess the particular complexities associated to the implementation of the ATAD. This matchless commentary by leading European tax law academics and practitioners on an important and much-debated item of EU legislation gives practitioners, enterprises and tax authorities an early opportunity to understand the practical effects of the directive in the various Member States.

Author : Organization for Economic Cooperation and Development
Publisher : Organization for Economic Co-Operation & Development
Page : 0 pages
File Size : 46,9 Mb
Release : 2016-12-15
Category : Corporations
ISBN : 9264268324

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Limiting Base Erosion Involving Interest Deductions and Other Financial Payments, Action 4 - 2016 Update by Organization for Economic Cooperation and Development Pdf

The 2015 Report established a common approach which directly links an entity's net interest deductions to its level of economic activity, based on taxable earnings before interest income and expense, depreciation and amortisation (EBITDA).

Author : Dan Throop Smith
Publisher : Unknown
Page : 332 pages
File Size : 50,8 Mb
Release : 1952
Category : Business enterprises
ISBN : STANFORD:36105060643546

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Effects of Taxation by Dan Throop Smith Pdf

Author : Ruud A. de Mooij,Shafik Hebous
Publisher : International Monetary Fund
Page : 20 pages
File Size : 50,7 Mb
Release : 2017-02-10
Category : Business & Economics
ISBN : 9781475578294

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Curbing Corporate Debt Bias by Ruud A. de Mooij,Shafik Hebous Pdf

Tax provisions favoring corporate debt over equity finance (“debt bias”) are widely recognized as a risk to financial stability. This paper explores whether and how thin-capitalization rules, which restrict interest deductibility beyond a certain amount, affect corporate debt ratios and mitigate financial stability risk. We find that rules targeted at related party borrowing (the majority of today’s rules) have no significant impact on debt bias—which relates to third-party borrowing. Also, these rules have no effect on broader indicators of firm financial distress. Rules applying to all debt, in contrast, turn out to be effective: the presence of such a rule reduces the debt-asset ratio in an average company by 5 percentage points; and they reduce the probability for a firm to be in financial distress by 5 percent. Debt ratios are found to be more responsive to thin capitalization rules in industries characterized by a high share of tangible assets.

Author : Oecd
Publisher : Org. for Economic Cooperation & Development
Page : 118 pages
File Size : 53,8 Mb
Release : 2015-10-15
Category : Electronic
ISBN : 9264241167

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OECD/G20 Base Erosion and Profit Shifting Project Limiting Base Erosion Involving Interest Deductions and Other Financial Payments, Action 4 - 2015 Final Report by Oecd Pdf

Addressing base erosion and profit shifting (BEPS) is a key priority of governments. In 2013, OECD and G20 countries, working together on an equal footing, adopted a 15-point Action Plan to address BEPS. This publication is the final report for Action 4.

Author : OECD
Publisher : OECD Publishing
Page : 116 pages
File Size : 43,9 Mb
Release : 2015-10-05
Category : Electronic
ISBN : 9789264241176

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OECD/G20 Base Erosion and Profit Shifting Project Limiting Base Erosion Involving Interest Deductions and Other Financial Payments, Action 4 - 2015 Final Report by OECD Pdf

Addressing base erosion and profit shifting (BEPS) is a key priority of governments. In 2013, OECD and G20 countries, working together on an equal footing, adopted a 15-point Action Plan to address BEPS. This publication is the final report for Action 4.

Author : OECD
Publisher : OECD Publishing
Page : 91 pages
File Size : 48,6 Mb
Release : 2013-02-12
Category : Electronic
ISBN : 9789264192744

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Addressing Base Erosion and Profit Shifting by OECD Pdf

This report presents studies and data available regarding the existence and magnitude of base erosion and profit shifting (BEPS), and contains an overview of global developments that have an impact on corporate tax matters.

Author : Aqib Aslam,Maria Delgado Coelho
Publisher : International Monetary Fund
Page : 50 pages
File Size : 40,6 Mb
Release : 2021-06-08
Category : Business & Economics
ISBN : 9781513561073

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A Firm Lower Bound: Characteristics and Impact of Corporate Minimum Taxation by Aqib Aslam,Maria Delgado Coelho Pdf

This paper examines the role of minimum taxes and attempts to quantify their impact on economic activity. Minimum taxes can be effective at shoring up the corporate tax base and enhancing the perceived equity of the tax system, potentially motivating broader taxpayer compliance. Where political and administrative constraints prevent reforms to the standard corporate income tax, a minimum tax can help mitigate base erosion from excessive tax incentives and avoidance. Using a new panel dataset that catalogues changes in minimum tax regimes over time around the world, firm-level analysis suggests that the introduction or reform of a minimum tax is associated with an increase in the average effective tax rate of just over 1.5 percentage points with respect to turnover and of around 10 percent with respect to operating income. Minimum taxes based on modified corporate income lead to the largest increases in effective tax rates, followed by those based on assets and turnover.

Author : OECD
Publisher : OECD Publishing
Page : 44 pages
File Size : 41,5 Mb
Release : 2013-07-19
Category : Electronic
ISBN : 9789264202719

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Action Plan on Base Erosion and Profit Shifting by OECD Pdf

This action plan, created in response to a request by the G20, identifies a set of domestic and international actions to address the problems of base erosion and profit sharing.

Author : OECD
Publisher : OECD Publishing
Page : 212 pages
File Size : 51,9 Mb
Release : 2016-12-22
Category : Electronic
ISBN : 9789264268333

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OECD/G20 Base Erosion and Profit Shifting Project Limiting Base Erosion Involving Interest Deductions and Other Financial Payments, Action 4 - 2016 Update Inclusive Framework on BEPS by OECD Pdf

The 2015 Report on BEPS Action 4 established a common approach which directly links an entity’s net interest deductions to its level of economic activity, based on taxable EBITDA. Further work on two aspects of the common approach was completed in 2016 and this is included in this update.

Author : Raffaele Petruzzi
Publisher : Kluwer Law International B.V.
Page : 338 pages
File Size : 44,5 Mb
Release : 2013-10-20
Category : Law
ISBN : 9789041167330

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Transfer Pricing Aspects of Intra-Group Financing by Raffaele Petruzzi Pdf

For corporate managers, maximization of the profits and the market value of the firm is a prime objective. The logical working out of this principle in multinational enterprises has led to an intense focus on transfer pricing between related companies, principally on account of the very attractive tax advantages made possible. Inevitably, numerous countries have established transfer pricing legislation designed to combat the distortions and manipulations that are inherent in such transactions. This important book, one of the first in-depth analysis of the current worldwide working of transfer pricing in intra-group financing and its resonance in law, presents the relevant issues related to loans, financial guarantees, and cash pooling; analyses an innovative possible approach to these issues; and describes new methodologies that can be implemented in practice in order to make intra-group financing more compliant with efficient corporate financing decisions and the generally accepted OECD arm’s length principle. Comparing the tax measures implemented in the corporate tax law systems of forty countries, this study investigates such aspects of intra-group financing as the following: – corporate finance theories, studies, and surveys regarding financing decisions; – application of the arm’s length principle to limit the deductibility of interest expenses; – impact of the OECD’s Base Erosion and Profit Shifting (BEPS) project; – transfer pricing issues related to intra-group financing; – credit risk in corporate finance; – rationales utilized by credit rating agencies; and – the assessment of arm’s length nature of intra-group financing. The author describes ways in which the application of the arm’s length principle can be strengthened and how the related risk of distortion and manipulation can be minimized. The solutions and methodologies proposed are applicable to any business sector. Given that determination of the arm’s length nature of transactions between related companies is one of the most difficult tasks currently faced by taxpayers and tax administrations around the world, this thorough assessment and analysis will prove extraordinarily useful for in-house and advisory practitioners, corporate officers, academics, international organizations, and government officials charged with finding effective responses to the serious issues raised. In addition to its well-researched analysis, the book’s comparative overview of how loans, financial guarantees, and cash pooling are currently addressed by OECD Member States and by their national courts is of great practical value in business decision making.

Author : International Monetary Fund. Fiscal Affairs Dept.
Publisher : International Monetary Fund
Page : 78 pages
File Size : 42,5 Mb
Release : 2016-12-10
Category : Business & Economics
ISBN : 9781498345200

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Tax Policy, Leverage and Macroeconomic Stability by International Monetary Fund. Fiscal Affairs Dept. Pdf

Risks to macroeconomic stability posed by excessive private leverage are significantly amplified by tax distortions. ‘Debt bias’ (tax provisions favoring finance by debt rather than equity) has increased leverage in both the household and corporate sectors, and is now widely recognized as a significant macroeconomic concern. This paper presents new evidence of the extent of debt bias, including estimates for banks and non-bank financial institutions both before and after the global financial crisis. It presents policy options to alleviate debt bias, and assesses their effectiveness. The paper finds that thin capitalization rules restricting interest deductibility have only partially been able to address debt bias, but that an allowance for corporate equity has generally proved effective. The paper concludes that debt bias should feature prominently in countries’ tax reform plans in the coming years.

Author : Ms.Grace Weishi Gu,Ruud A. de Mooij,Mr.Tigran Poghosyan
Publisher : International Monetary Fund
Page : 35 pages
File Size : 55,8 Mb
Release : 2012-11-30
Category : Business & Economics
ISBN : 9781475540680

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Taxation and Leverage in International Banking by Ms.Grace Weishi Gu,Ruud A. de Mooij,Mr.Tigran Poghosyan Pdf

This paper explores how corporate taxes affect the financial structure of multinational banks. Guided by a simple theory of optimal capital structure it tests (i) whether corporate taxes induce subsidiary banks to raise their debt-asset ratio in light of the traditional debt bias; and (ii) whether international corporate tax differentials vis-a-vis foreign subsidiary banks affect the intra-bank capital structure through international debt shifting. Using a novel subsidiary-level dataset for 558 commercial bank subsidiaries of the 86 largest multinational banks in the world, we find that taxes matter significantly, through both the traditional debt bias channel and the international debt shifting that is due to the international tax differentials. The latter channel is more robust and tends to be quantitatively more important. Our results imply that taxation causes significant international debt spillovers through multinational banks, which has potentially important implications for tax policy.

Author : Sebastian Beer,Ruud A. de Mooij,Ms.Li Liu
Publisher : International Monetary Fund
Page : 45 pages
File Size : 41,6 Mb
Release : 2018-07-23
Category : Business & Economics
ISBN : 9781484363997

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International Corporate Tax Avoidance: A Review of the Channels, Magnitudes, and Blind Spots by Sebastian Beer,Ruud A. de Mooij,Ms.Li Liu Pdf

This paper reviews the rapidly growing empirical literature on international tax avoidance by multinational corporations. It surveys evidence on main channels of corporate tax avoidance including transfer mispricing, international debt shifting, treaty shopping, tax deferral and corporate inversions. Moreover, it performs a meta analysis of the extensive literature that estimates the overall size of profit shifting. We find that the literature suggests that, on average, a 1 percentage-point lower corporate tax rate will expand before-tax income by 1 percent—an effect that is larger than reported as the consensus estimate in previous surveys and tends to be increasing over time. The literature on tax avoidance still has several unresolved puzzles and blind spots that require further research.

Author : Peter Harris
Publisher : Cambridge University Press
Page : 651 pages
File Size : 45,6 Mb
Release : 2013-03-07
Category : Business & Economics
ISBN : 9781107033535

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Corporate Tax Law by Peter Harris Pdf

A comprehensive and comparative analysis of corporate tax systems, focusing on structural defects and how they are addressed in practice.