Handbuch Investment in Germany
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5th International Conference on Accounting, Auditing, and Taxation (ICAAT 2016) TAX TRANSPARENCY – AN ANALYSIS OF THE LUXLEAKS FIRMS Johannes Manthey University of Würzburg, Würzburg, Germany Dirk Kiesewetter University of Würzburg, Würzburg, Germany Abstract This paper finds that the firms involved in the Luxembourg Leaks (‘LuxLeaks’) scandal are less transparent measured by the engagement in earnings management, analyst coverage, analyst accuracy, accounting standards and auditor choice. The analysis is based on the LuxLeaks sample and compared to a control group of large multinational companies. The panel dataset covers the years from 2001 to 2015 and comprises 19,109 observations. The LuxLeaks firms appear to engage in higher levels of discretionary earnings management measured by the variability of net income to cash flows from operations and the correlation between cash flows from operations and accruals. The LuxLeaks sample shows a lower analyst coverage, lower willingness to switch to IFRS and a lower Big4 auditor rate. The difference in difference design supports these findings regarding earnings management and the analyst coverage. The analysis concludes that the LuxLeaks firms are less transparent and infers a relation between corporate transparency and the engagement in tax avoidance. The paper aims to establish the relationship between tax avoidance and transparency in order to give guidance for future policy. The research highlights the complex causes and effects of tax management and supports a cost benefit analysis of future tax regulation. Keywords: Tax Avoidance, Transparency, Earnings Management JEL Classification: H20, H25, H26 1. Introduction The Luxembourg Leaks (’LuxLeaks’) scandal made public some of the tax strategies used by multinational companies. -
The Government of the Hungarian People's Republic
CONVENTION BETWEEN THE GOVERNMENT OF THE HUNGARIAN PEOPLE'S REPUBLIC AND THE GOVERNMENT OF THE ITALIAN REPUBLIC FOR THE AVOIDANCE OF DOUBLE TAXATION WITH RESPECT TO TAXES ON INCOME AND CAPITAL AND THE PREVENTION OF FISCAL EVASION.1 The Government of the Hungarian People's Republic and the Government of the Italian Republic, desiring to promote and facilitate the economic relations between the two countries, have agreed to conclude a Convention for the avoidance of double taxation with respect to taxes on income and capital and the prevention of fiscal evasion of which the provisions are the following: Article 1 - Personal scope This Convention shall apply to persons who are residents of one or both of the Contracting States. Article 2 - Taxes covered 1. This Convention shall apply to taxes on income and on capital imposed on behalf of each Contracting State or its political or administrative subdivisions or local authorities, irrespective of the manner in which they are levied. 2. There shall be regarded as taxes on income and on capital taxes imposed on total income, on total capital, or on elements of income or of capital, including taxes on gains from the alienation of movable or immovable property, taxes on the total amounts of wages or salaries paid by enterprises, as well as taxes on capital appreciation. 3. The existing taxes to which this Convention shall apply are the following: (a) in the case of the Italian Republic: (1) the individual income tax (imposta sul reddito delle persone fisiche); (2) the tax on the income of legal entities (imposta sul reddito delle persone giuridiche); and (3) the local income tax (imposta locale sui redditi), even if withheld at the source (hereinafter referred to as "Italian tax"); (b) in the case of the Hungarian People's Republic: (1) the income taxes (j”vedelemad¢k); (2) the profit taxes (nyeres‚gad¢k); (3) the enterprises' special tax (v llalati kl”nad¢); (4) the tax on buildings (h zad¢); 1 Date of Conclusion: 16 May 1977. -
Environmental Taxes and Subsidies: What Is the Appropriate Fiscal Policy for Dealing with Modern Environmental Problems?
William & Mary Environmental Law and Policy Review Volume 24 (2000) Issue 1 Environmental Justice Article 6 February 2000 Environmental Taxes and Subsidies: What is the Appropriate Fiscal Policy for Dealing with Modern Environmental Problems? Charles D. Patterson III Follow this and additional works at: https://scholarship.law.wm.edu/wmelpr Part of the Environmental Law Commons, and the Tax Law Commons Repository Citation Charles D. Patterson III, Environmental Taxes and Subsidies: What is the Appropriate Fiscal Policy for Dealing with Modern Environmental Problems?, 24 Wm. & Mary Envtl. L. & Pol'y Rev. 121 (2000), https://scholarship.law.wm.edu/wmelpr/vol24/iss1/6 Copyright c 2000 by the authors. This article is brought to you by the William & Mary Law School Scholarship Repository. https://scholarship.law.wm.edu/wmelpr ENVIRONMENTAL TAXES AND SUBSIDIES: WHAT IS THE APPROPRIATE FISCAL POLICY FOR DEALING WITH MODERN ENVIRONMENTAL PROBLEMS? CHARLES D. PATTERSON, III* 1 Oil spills and over-fishing threaten the lives of Pacific sea otters. Unusually warm temperatures are responsible for an Arctic ice-cap meltdown. 2 Contaminated drinking water is blamed for the spread of avian influenza from wild waterfowl to domestic chickens.' Higher incidences of skin cancer are projected, due to a reduction in the ozone layer. Our environment, an essential and irreplaceable resource, has been under attack since the industrial age began. Although we have harnessed nuclear energy, made space travel commonplace, and developed elaborate communications technology, we have been unable to effectively eliminate the erosion and decay of our environment. How can we deal with these and other environmental problems? Legislators have many methods to encourage or discourage individual or corporate conduct. -
FINANCE Offshore Finance.Pdf
This page intentionally left blank OFFSHORE FINANCE It is estimated that up to 60 per cent of the world’s money may be located oVshore, where half of all financial transactions are said to take place. Meanwhile, there is a perception that secrecy about oVshore is encouraged to obfuscate tax evasion and money laundering. Depending upon the criteria used to identify them, there are between forty and eighty oVshore finance centres spread around the world. The tax rules that apply in these jurisdictions are determined by the jurisdictions themselves and often are more benign than comparative rules that apply in the larger financial centres globally. This gives rise to potential for the development of tax mitigation strategies. McCann provides a detailed analysis of the global oVshore environment, outlining the extent of the information available and how that information might be used in assessing the quality of individual jurisdictions, as well as examining whether some of the perceptions about ‘OVshore’ are valid. He analyses the ongoing work of what have become known as the ‘standard setters’ – including the Financial Stability Forum, the Financial Action Task Force, the International Monetary Fund, the World Bank and the Organization for Economic Co-operation and Development. The book also oVers some suggestions as to what the future might hold for oVshore finance. HILTON Mc CANN was the Acting Chief Executive of the Financial Services Commission, Mauritius. He has held senior positions in the respective regulatory authorities in the Isle of Man, Malta and Mauritius. Having trained as a banker, he began his regulatory career supervising banks in the Isle of Man. -
Tax Heavens: Methods and Tactics for Corporate Profit Shifting
Tax Heavens: Methods and Tactics for Corporate Profit Shifting By Mark Holtzblatt, Eva K. Jermakowicz and Barry J. Epstein MARK HOLTZBLATT, Ph.D., CPA, is an Associate Professor of Accounting at Cleveland State University in the Monte Ahuja College of Business, teaching In- ternational Accounting and Taxation at the graduate and undergraduate levels. axes paid to governments are among the most significant costs incurred by businesses and individuals. Tax planning evaluates various tax strategies in Torder to determine how to conduct business (and personal transactions) in ways that will reduce or eliminate taxes paid to various governments, with the objective, in the case of multinational corporations, of minimizing the aggregate of taxes paid worldwide. Well-managed entities appropriately attempt to minimize the taxes they pay while making sure they are in full compliance with applicable tax laws. This process—the legitimate lessening of income tax expense—is often EVA K. JERMAKOWICZ, Ph.D., CPA, is a referred to as tax avoidance, thus distinguishing it from tax evasion, which is illegal. Professor of Accounting and Chair of the Although to some listeners’ ears the term tax avoidance may sound pejorative, Accounting Department at Tennessee the practice is fully consistent with the valid, even paramount, goal of financial State University. management, which is to maximize returns to businesses’ ownership interests. Indeed, to do otherwise would represent nonfeasance in office by corporate managers and board members. Multinational corporations make several important decisions in which taxation is a very important factor, such as where to locate a foreign operation, what legal form the operations should assume and how the operations are to be financed. -
Explanation of Proposed Estate and Gift Tax Treaty Between the United States and the Kingdom of Denmark
[JOINT COMMITTEE PRINT] EXPLANATION OF PROPOSED ESTATE AND GIFT TAX TREATY BETWEEN THE UNITED STATES AND THE KINGDOM OF DENMARK SCHEDULED FOR A HEARING BEFORE THE COMMITTEE ON FOREIGN RELATIONS UNITED STATES SENATE ON APRIL 26, 1984 PREPARED BY THE STAFF OF THE JOINT COMMITTEE ON TAXATION APRIL 25, 1984 U .S. GOVERNMENT PRINTING OFFICE 33-7070 WASHINGTON: 1984 JCS-18-84 CONTENTS Page [NTRODUCTION .......................... ...................... ........................... .......... 1 1. SUMMARy..... ..... ........................................................................... 3 II. OVERVIEW OF UNITED STATES TAXATION OF INTERNATION- AL GRATUITOUS TRANSFERS AND TAX TREATIES ................ A. United States Estate and Gift Tax Rules ... ............. B. Causes of Double Taxation ......................... .. .. ............ C. United States Estate and Gift Tax Treaties ........ .. .. III. EXPLANATION OF PROPOSED TAX TREATy................................ 11 Article 1. Personal Scope........ .... .. ........... ...................... ... 11 Article 2. Taxes Covered...... ......... .... ............................... 11 Article 3. General Definitions.... ......................... ............. 12 Article 4. Fiscal Domicile ................................................. 13 Article 5. Real Property..... .. ............................................. 14 Article 6. Business Property of a Permanent Estab- lishment and Assets Pertaining to a Fixed Based Used for the Performance of Independent Person- al Services...... ................. -
World Energy Perspectives Rules of Trade and Investment | 2016
World Energy Perspectives Rules of trade and investment | 2016 NON-TARIFF MEASURES: NEXT STEPS FOR CATALYSING THE LOW- CARBON ECONOMY ABOUT THE WORLD ENERGY COUNCIL The World Energy Council is the principal impartial network of energy leaders and practitioners promoting an affordable, stable and environmentally sensitive energy system for the greatest benefit of all. Formed in 1923, the Council is the UN- accredited global energy body, representing the entire energy spectrum, with over 3,000 member organisations in over 90 countries, drawn from governments, private and state corporations, academia, NGOs and energy stakeholders. We inform global, regional and national energy strategies by hosting high-level events including the World Energy Congress and publishing authoritative studies, and work through our extensive member network to facilitate the world’s energy policy dialogue. Further details at www.worldenergy.org and @WECouncil ABOUT THE WORLD ENERGY PERSPECTIVES – NON-TARIFF MEASURES: NEXT STEPS FOR CATALYSING THE LOW-CARBON ECONOMY The World Energy Perspective on Non-tariff Measures is the second report in a series looking at how an open global trade and investment regime concerning energy and environmental goods and services can foster the transition to a low-carbon economy. Building on the previous report on tariff barriers to environmental goods, this report highlights twelve significant non-tariff measures (NTMs) directly affecting the energy industry and investments in this sector. The World Energy Council has identified that these barriers greatly impact countries’ trilemma performance, the triple challenge of achieving secure, affordable and environmentally sustainable energy systems. Through this work, the Council seeks to inform policymakers as to what extent countries should address non-tariff measures to improve trade conditions, and eliminate unnecessary additional costs to trade, ultimately fostering national economic development. -
International Tax Planning and Reporting Requirements
international tax planning and reporting requirements Foreign earned income exclusions and foreign tax credits can significantly reduce the U.S. tax liability incurred on foreign- source income and help to avoid double taxation. Complex reporting is required for U.S. persons owning foreign assets including bank accounts and other financial investments. 106 NEW IN 2018 filed electronically. It is due April 17, 2018 and can be extended. Reportable transactions between the U.S. LLC and its foreign The Tax Cuts and Jobs Act of 2017 will have a significant impact owner include contributions and distributions between the two, in the international tax arena. Most notably, there is a manda- and would certainly include the setup and closure of the LLC. 2018 personal tax guide tory one-time repatriation of offshore foreign earnings held in There are onerus penalties for non-filing. a specified foreign entity. All U.S. shareholders with at least 10% ownership in a specified foreign entity are required to include EisnerAmper their share of the offshore earnings and profits which have not FOREIGN TAX ISSUES previously been taxed in the U.S. Only a portion of the foreign earnings are taxable based on the applicable percentage. U.S. Multinational clients with cross-border income from employ- shareholders will be allowed a 77.1% deduction for non-cash ment and investments are in today’s mainstream. Many taxpayers amounts and a 55.7% reduction for cash amounts. The effec- are discovering that they are subject to taxation and/or report- tive tax rate will ultimately depend on the U.S. -
2021 Tax Rates, Schedules, and Contribution Limits
2021 tax rates, schedules, and contribution limits Income tax Tax on capital gains and qualified dividends If taxable Income income But Of the Single Married/Filing jointly/Qualifying Widow(er) Tax rate is over not over The tax is amount over $0–$40,400 $0–$80,800 0% Married/Filing $0 $19,900 $0.00 + 10% $0 jointly and $19,900 $81,050 $1,990 + 12% $19,900 Over $40,400 but not Over $80,800 but not over qualifying over $445,850 $501,600 15% widow(er)s $81,050 $172,750 $9,328 + 22% $81,050 Over $445,850 Over $501,600 20% $172,750 $329,850 $29,502 + 24% $172,750 Additional 3.8% federal net investment income (NII) tax applies to individuals $329,850 $418,850 $67,206 + 32% $329,850 on the lesser of NII or modified AGI in excess of $200,000 (single) or $250,000 $418,850 $628,300 $95,686 + 35% $418,850 (married/filing jointly and qualifying widow(er)s). Also applies to any trust or $628,300 $168,993.50 + 37% $628,300 estate on the lesser of undistributed NII or AGI in excess of the dollar amount Single $0 $9,950 $0.00 + 10% $0 at which the estate/trust pays income taxes at the highest rate ($13,050). $9,950 $40,525 $995 + 12% $9,950 Kiddie tax* $40,525 $86,375 $4,664 + 22% $40,525 Child’s unearned income above $2,200 is generally subject to taxation at $86,375 $164,925 $14,751 + 24% $86,375 the parent’s marginal tax rate; unearned income above $1,100 but not $164,925 $209,425 $33,603 + 32% $164,925 more than $2,200 is taxed at the child’s tax rate. -
Base Erosion and Profit Shifting (BEPS)
Base Erosion and Profit Shifting (BEPS) BEPS Action 7 Additional Guidance on the Attribution of Profits to Permanent Establishments 4 October 2017 2 TABLE OF CONTENTS AFME and UK Finance .................................................................................................................. 5 Andrew Cousins & Richard Newby ............................................................................................... 8 Andrew Hickman ............................................................................................................................ 13 ANIE (Federazione Nazionale Imprese Elettrotecniche ed Elettroniche) ....................................... 19 Association of British Insurers ....................................................................................................... 22 BDI ...... .......................................................................................................................................... 24 BDO...... .......................................................................................................................................... 26 BEPS Monitoring Group ................................................................................................................ 29 BIAC ... .......................................................................................................................................... 47 BusinessEurope ............................................................................................................................. -
Taxation Convention with Austria Message from The
TAXATION CONVENTION WITH AUSTRIA MESSAGE FROM THE PRESIDENT OF THE UNITED STATES TRANSMITTING CONVENTION BETWEEN THE UNITED STATES OF AMERICA AND THE REPUBLIC OF AUSTRIA FOR THE AVOIDANCE OF DOUBLE TAXATION AND THE PREVENTION OF FISCAL EVASION WITH RESPECT TO TAXES ON INCOME, SIGNED AT VIENNA ON MAY 31, 1996. GENERAL EFFECTIVE DATE UNDER ARTICLE 28: 1 JANUARY 1999 TABLE OF ARTICLES Article 1----------------------------------Personal Scope Article 2----------------------------------Taxes Covered Article 3----------------------------------General Definitions Article 4----------------------------------Resident Article 5----------------------------------Permanent Establishment Article 6----------------------------------Income from Real Property Article 7----------------------------------Business Profits Article 8----------------------------------Shipping and Air Transport Article 9----------------------------------Associated Enterprises Article 10--------------------------------Dividends Article 11--------------------------------Interest Article 12--------------------------------Royalties Article 13--------------------------------Capital Gains Article 14--------------------------------Independent Personal Services Article 15--------------------------------Dependent Personal Services Article 16--------------------------------Limitation on Benefits Article 17--------------------------------Artistes and Athletes Article 18--------------------------------Pensions Article 19--------------------------------Government Service Article 20--------------------------------Students -
Narrative Report on Panama
NARRATIVE REPORT ON PANAMA PART 1: NARRATIVE REPORT Rank: 15 of 133 Panama ranks 15th in the 2020 Financial Secrecy Index, with a high secrecy score of 72 but a small global scale weighting (0.22 per cent). How Secretive? 72 Coming within the top twenty ranking, Panama remains a jurisdiction of particular concern. Overview and background Moderately secretive 0 to 25 Long the recipient of drugs money from Latin America and with ample other sources of dirty money from the US and elsewhere, Panama is one of the oldest and best-known tax havens in the Americas. In recent years it has adopted a hard-line position as a jurisdiction that refuses to 25 to 50 cooperate with international transparency initiatives. In April 2016, in the biggest leak ever, 11.5 million documents from the Panama law firm Mossack Fonseca revealed the extent of Panama’s involvement in the secrecy business. The Panama Papers showed the 50 to 75 world what a few observers had long been saying: that the secrecy available in Panama makes it one of the world’s top money-laundering locations.1 Exceptionally 75 to 100 In The Sink, a book about tax havens, a US customs official is quoted as secretive saying: “The country is filled with dishonest lawyers, dishonest bankers, dishonest company formation agents and dishonest How big? 0.22% companies registered there by those dishonest lawyers so that they can deposit dirty money into their dishonest banks. The Free Trade Zone is the black hole through which Panama has become one of the filthiest money laundering sinks in the huge world.”2 Panama has over 350,000 secretive International Business Companies (IBCs) registered: the third largest number in the world after Hong Kong3 and the British Virgin Islands (BVI).4 Alongside incorporation of large IBCs, Panama is active in forming tax-evading foundations and trusts, insurance, and boat and shipping registration.