PoliticsState-owned Firms avoid Taxes too, according to a New...

State-owned Firms avoid Taxes too, according to a New Study

-

- Advertisment -sslate

Despite the assumption that governments are committed to tackling tax avoidance, certain state-owned enterprises exhibit low effective tax rates, implying that even these firms engage in tax planning. This is the somewhat striking finding of a new study conducted by Professor Eva Eberhartinger and David Samuel, Ph.D. from the Vienna University of Economics and Business (WU Vienna).

The empirical study focuses on a sample of German companies as Germany offers a setting where different types of governmental entities with different taxing rights (e.g., the municipalities) act as state owners.

taxes

Using financial statement data, the study finds that certain state-owned entities engage in tax planning behaviour that is similar to that of comparable privately owned firms.

However, not all state-owned firms exhibit the same degree of tax avoidance. Only those state-owned firms in which the state owners do not directly benefit from tax revenues engage in tax planning. In contrast, in cases where the state owner is the direct beneficiary of the firm´s tax payments, the tax planning of state-owned firms is significantly lower. The study concludes that a state owner that benefits from the tax payments has adequate incentives to properly monitor the firm´s tax planning activities.

As such, the researchers suggest that even state owners need an incentive to ensure that “their” companies do not seek tax loopholes. Ensuring that the state owner receives a share of the tax revenues can create such an incentive.

euros

The study also makes an important contribution to the current discussion about nationalisations in the wake of the economic crisis caused by the COVID-19 pandemic. The findings inform policymakers about a potential measure – the participation of state owners in tax revenues – to ensure low tax planning activities of nationalised firms.

Eva Eberhartinger, Professor at the Institute for Accounting & Auditing and Head of the Business Tax Group at WU Vienna, says:

“Shareholder incentives matter for tax planning activities. To curb tax avoidance, policymakers should not only focus on the firm itself, but also on the shareholders.”

germany taxes

The study, ‘Monitoring and Tax Planning – Evidence from State- Owned Enterprises’, was published as part of the WU International Taxation Research Paper Series.

Sunshine Slate
Sunshine Slatehttps://www.sunshineslate.com
Sunshine Slate is your news, entertainment, music fashion website. We provide you with the latest breaking news and videos straight from the United States of America.

LEAVE A REPLY

Please enter your comment!
Please enter your name here

Latest news

Things You Should Know About the Evaporative Cooling Solution Offered

The bonaire evaporative cooling services can reduce the money you spend on your power bill. Know About the Evaporative Cooling Solution.

Top 4 AC Features you Need in 2023

In this article, we'll explore the top 4 AC features you need in 2023, with a particular focus on Hitachi Cooling & Heating

From Raw Material to Masterpiece: The Process of Steel Fabrication

Steel fabrication is the process of turning raw steel into finished goods. Globally, the steel fabrication business is important to many nations' economies.

Not just aNYplace: SS23 Campaign at GANT.com

This spring, GANT invited a cast of creatives to show how their unique style channels the chaos and coolness of New York City.
- Advertisement -

Black, Male, Blood type A: New review identifies risk factors for Pancreatic Cancer

Smoking, gender, ethnicity, and even gum disease and blood type can be risk factors of pancreatic cancer, reveals new insights

Florida Group Works to Keep Eligible People on Medicaid

Public health emergency and returns its Medicaid program to pre-pandemic rules, a possibility that older people could lose their coverage
edealo.com
- Advertisement - Motel 6
transformerscon

Must read

8 Reasons to Use Bidet Converter Kit

Overall, bidet converter kits offer a range of benefits for personal hygiene, environmental sustainability, and overall health and well-being. If you're considering making the switch from traditional toilet paper, a bidet converter kit may be a great option to explore.

5 Best Hair Treatment Salon in Dubai You Feel Excited to Visit

They get to explore new places while looking their stunning best. If you are a foreigner looking to visit Dubai or are a local who wants top-quality hair treatment, then keep reading. Why? Well, we are going to list the best hair treatment salons in Dubai.
- Advertisement -
- Advertisement -sslate

You might also likeRELATED
Recommended to you