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Purpose: The goal of the study is to provide guidelines for a simplified South African Value-Added Tax (VAT) Act.Motivation: The current VAT Act lacks logical structure and is therefore complex to teach, apply in practice and administer. The study on which this article reports investigated the structure of the VAT Act as an element of legal complexity.Design/Methodology/Approach: The research was conducted in two phases: a literature review, followed by semi-structured interviews.Main findings: Existing empirical studies confirm that the poor structure, layout and organisation of the VAT Act contribute to its complexity. In addition, research confirms that improvements to structure, layout and organisation enhance the readability of statutes. Interviewees agreed that the current incoherent structure of the VAT Act contributes to its complexity. The findings confirm that the complexity of the VAT Act raises compliance and administrative costs.Practical implications/Managerial impact: The literature review and interview findings contribute to the development of guidelines for a simplified South African VAT Act, which is the contribution of this study. The principles include adhering to a VAT vendor’s lifecycle, grouping sections together, introducing headings and subheadings, using clear signposting, employing international benchmarks and seeking a solution that addresses local challenges most effectively.Novelty/Contribution: One recommendation that stands out is to completely rewrite the VAT Act. As a first step in this rewrite project, it is recommended that an index be developed using the guidelines. This is an initial step towards simplification of the South African VAT Act. [ABSTRACT FROM AUTHOR]

The article focuses on the implications of the Federal Fiscal Court (BFH) judgment of December 16, 2020 regarding free-of-charge benefits and input tax deduction. Topics include the general conditions for a business to be eligible for input tax deduction, and input tax deduction for services indirectly connected to entrepreneurial activities, and changes in the Umsatzsteuer-Anwendungserlass (UStAE) related to free-of-charge benefits and input tax deduction.

The article focuses on the interpretation of tax invoicing rules in relation to German tax laws, particularly section 24 Abs. 1 of Umsatzsteuergesetz (UStG), German Value Added Tax Act, considering various legal provisions and court decisions. Topics include the treatment of tax invoicing when there is a transfer of assets due to dissolution of a partnership, the applicability of average tax rate taxation, and the treatment of transactions not subject to specific tax provisions.

The article focuses on the interpretation of Art. 30, Art. 60, and Art. 71 Abs. 1 Subpara. 2 of the VAT Directive in a case involving the illegal import of cigarettes into the EU. Topics include the conflict between national regulations referring to the Union Customs Code and the VAT Directive, the application of Art. 215 Abs. 4 of the Customs Code to determine the place of origin of import VAT, and the relevance of the territorial principle in allocating revenues from import VAT.

The article focuses on recent amendments to the German Value Added Tax Act (UStG) and the Value Added Tax Implementation Ordinance (UStDV) resulting from the Growth Opportunities Act and other current laws. Topics include the objectives of the Growth Opportunities Act, changes in the taxation of services for non-profit, charitable, or religious purposes, and the impact of the amendments on the application of reduced tax rates for activities serving tax-exempt purposes.

This paper examines the price effects of a VAT (value-added tax) reduction for menstrual hygiene products in Germany. Several aspects make this VAT reduction particularly interesting: the reduction is exogenous to economic conditions, the reduction was substantial and permanent, and demand can be assumed to be inelastic. We find that the VAT reduction was completely passed through to consumers. In fact, pass-through rates of significantly more than 100% can be observed. We find that the excess pass-through occurred in relatively competitive market segments, and that it is almost fully explained by retailers rounding down prices after the reduction. [ABSTRACT FROM AUTHOR]

In light of the economic recession in the post‐pandemic era, countries have implemented a wide array of fiscal stimulus measures as a means of addressing the prevailing economic challenges but often neglect to consider the consequences of these stimuli on the environment. Therefore, it is crucial for the government to take environmental considerations into economic stimulus packages, aiming to achieve a sustainable "green recovery." Using China's value‐added tax (VAT) reform as a quasi‐natural experiment, we find that VAT incentives have significantly improved the firm's energy efficiency through factor substitution and technological progress, indicating that tax incentives are beneficial to economic stimulus and energy saving. In addition, we find that energy market distortions play a significant negative moderating role, which weakens energy efficiency gained from the VAT incentives. Furthermore, heterogeneity analysis shows that the improvement of energy efficiency is concentrated in non‐state, high‐capital intensity, and high financing‐dependent firms. According to our findings, policymakers should have a thorough understanding of the potential of tax incentives for investment as a policy tool for achieving a "green recovery" as long as the energy market is efficient. [ABSTRACT FROM AUTHOR]

Fiscal policy stands as a crucial pillar of economic development through its economic financing function. The regulatory effects of fiscality have been shown to reduce the ripple effects of uncertainties on economic growth within the EU. Unlike the average European economy, the Romanian economy has exhibited particularities concerning economic growth (ranking highly in economic growth among European nations in absolute terms), partly due to a more assertive fiscal policy applied to a consumption-based economy affected by hyperinflation (especially in the last five calendar years). The research issue stems from the premise of the lack of predictability in Romanian fiscal policy and its implications for the business environment. Our aim is to develop an econometric model of the fiscal effects of VAT on the business performance of the construction sector in Romania for the period 2010–2021. The methods employed involve empirical analysis and the development of consolidated industry-level databases followed by econometric modeling using the multiple linear regression method. The results of the research demonstrate that financial independence and solvency promote excessive taxation in emerging markets and developing countries, such as Romania, being correlated with the macroeconomic evolution of the respective state. Additionally, the results indicate that tax pressure can constitute a barrier to the sustainable development of firms, with direct repercussions for consumers. Attractiveness to investors is also affected, remaining a priority for companies. The study's findings will enable the identification of the main impediments and opportunities brought about by VAT taxation on branch-level performance, proving useful for construction sector managers and fiscal policy makers in fostering sustainable industry development and establishing a sustainable fiscal regime to safeguard investors. [ABSTRACT FROM AUTHOR]

The article discusses special obligations for payment service providers as mandated by Article 17 of the Jahressteuergesetz 2022, integrating specific requirements outlined in Directive (European Union) into national law. It states that payment service providers are required to maintain records and report cross-border payments quarterly to the Federal Central Tax Office, contributing to the Central Electronic System of Payment Information aimed at enhancing Value-added tax fraud detection.

The article examines the alignment of national regulations with EU law concerning the application of reduced VAT on renovation and repair services for private dwellings, specifically addressing whether the eligibility criteria tied to the actual residential use during renovation comply with EU directives. It mentions a case involving a disagreement between the Portuguese Tax and Customs Authority and HPA - Construções SA concerning the applicable VAT rate for renovation services.

The article discusses the obligations of taxpayers in relation to the principles of legal certainty and the primacy of Union law, particularly in the context of value-added tax deduction rights and the interpretation of Union law. It delves into a legal dispute between Global Ink Trade Kft. and the Nemzeti Adó- és Vámhivatal Fellebbviteli Igazgatósága (National Tax and Customs Administration, Hungary) concerning the denial of VAT deduction rights for purchased goods.

The article focuses on the taxable provision of services by shareholders concerning the construction of a building for energy storage purposes in the context of a wind energy project. It states that the case involves a German GmbH & Co. KG, operating a wind park, where the construction of a storage facility was a key aspect. It mentions that the tax implications of the shareholder's commitment to constructing the building and subsequent issues related to value-added tax deductions are explored.

Companies that issue tax documents to defraud the tax authorities with the transfer of credits of Brazil's state value-added tax (ICMS) without the movement of goods cause financial losses to the government and, therefore, to society as a whole. Several initiatives to combat tax fraud have successfully used data analysis and Machine Learning techniques. This work sought to investigate the use of these techniques in identifying a specific practice of tax fraud, practiced by shell companies, formed exclusively to issue non-due ICMS credits, the tax on operations related to the circulation of goods, and the provision of interstate, intercity, and communication services. Based on document analysis and consultation with auditors and specialists, typologies and variables relevant to identifying tax evasion events carried out by shell companies were identified. Around these variables, data from the Finance Department of the Federal District were collected and prepared. With this data, it was possible to explore the use of predictive models based on Machine Learning capable of pointing out potentially fraudulent behavior. The good results obtained by these models demonstrate their potential as part of systematic monitoring and fiscal audits by tax authorities. [ABSTRACT FROM AUTHOR]

The article discusses a tax dispute regarding the waiver of a contractual delivery right by a farmer for consideration. It mentions that the dispute involves a taxpayer, which had a contract with a GmbH & Co. for agricultural product delivery, centering on whether the payment received for waiving the delivery right is subject to average rate taxation. It states that the Federal Fiscal Court ruled that the waiver is taxable but does not fall under the specific agricultural average rate taxation.

The article discusses a legal case in Germany, regarding the admissibility of a resolution based on Section 126a FGO and the determination of the location of an economic task. It focuses on the interpretation of tax law, specifically related to the location of business operations and the taxation of services provided. It mentions that the case involves a company engaged in Internet Protocol Television (IPTV) services, with a dispute over the tax jurisdiction of its services.

The article discusses the challenges and complexities of German sales tax law, focusing on the European internal market. It highlights the significance of the German value-added tax system as a major source of state revenue and its evolution over the years. It emphasizes the intricate nature of the VAT system, especially in the context of cross-border transactions within the European Union.

Copyright of Umsatzsteuer-Rundschau is the property of De Gruyter and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

The article discusses recent significant decisions by the German Federal Fiscal Court (BFH) regarding the actual taxation principles under § 20 UStG, emphasizing the July 12, 2023 ruling (XI R 5/21). It introduces new standards set by the BFH for revoking permission for actual taxation, specifically in cases where there is no statutory turnover tax of the actual taxpayer, and simultaneous input tax deduction by the service recipient.

In the development of this investigative work, the importance of the return of the value added tax is reflected in the economy of the elderly of the Noboa parish, 24 de Mayo, where these people do not have defined knowledge about the return of the Tax Added Value (VAT). That is why the general objective was defined, which is to analyze the return of the VAT and its importance in the economy of the elderly of the Noboa parish, taking into consideration the existing lack of knowledge on the part of the adults greater. A mixed methodology was used, field, bibliographic and descriptive research; In the same way, bibliographic, deductive, inductive and statistical methods were implemented, to obtain relevant information, a survey technique was developed where non-probabilistic sampling was chosen, and the sample of 30 older adults was selected to apply said technique. The results indicate that the older adults surveyed are unaware of the VAT refund and that, furthermore, they have not received talks on this topic, concluding that these people need training so that they can enjoy this benefit and have a stable life. [ABSTRACT FROM AUTHOR]

Objective: Food taxation can improve diets by making unhealthy foods more expensive and by making healthy foods cheaper. In the Netherlands, a political window of opportunity arose in December 2021 to reduce the value-added tax (VAT) on fruits and vegetables to zero percent. The policy is now facing institutional friction along several fronts, however, delaying and potentially averting its implementation. We analysed this institutional friction to inform future food tax policies. Design: We qualitatively analysed open-access fiscal and health experts' position papers about benefits and downsides of the zero-rate that were discussed with members of parliament in June 2023. Setting: The Netherlands. Participants: Not applicable. Results: Health and fiscal experts expressed noticeably different viewpoints towards the utility of the zero-rate. One important argument fiscal experts based their negative advice upon pertained to the legal restrictions for distinguishing between healthier and unhealthier forms of fruits and vegetables (i.e. the principle of neutrality). A zero-rate VAT on unhealthier forms of fruits and vegetables, e.g. processed cucumber, mixed with salt and sugar, would be undesirable, but differentiating between raw and processed cucumber would offend the neutrality principle. Conclusions: The Dutch attempt to give fruits and vegetables a tax break highlights the need for crystal-clear food classifications when designing food tax policies. Public health nutritionists should combine classifications based on caloric density, palatability, degree of processing and nutrient content to provide a database for evidence-informed tax differentiation according to food item healthfulness. [ABSTRACT FROM AUTHOR]

Copyright of Romanian Case Law Review / Revista Română de Jurisprudenţă is the property of Universul Juridic Publishing House and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

Four years before the Macedonian authorities submitted the request for membership in the European Union, they have started the process of tax harmonization with the EU law. Therefore, in 2000 the legislator adopted the Law on the Value Added Tax that was completely established on the basic principles of the VI VAT directive, considered as the raison d'etre for VAT in every EU member states. Different from the obligation to harmonize the national legislations with the EU rules in the area of indirect taxation, countries still preserve their tax sovereignty regarding the direct taxes. However, contemporary supranational tax problems and challenges, such as the issue of transfer pricing, aggressive tax planning, hybrid tax mismatches etc., require cross-border cooperation, mutual coordination and implementation of the measures adopted on EU level. In this context, most important is the EU Anti-Tax Avoidance Directive of 2016, which is a set of minimum standards and rules that aim to create a business environment with fair conditions for all EU members. For this entire pre-accession period, the Republic of North Macedonia has undertaken series of reforms in the area of income taxes, although all the changes and amendments were or still are in direction of “relaxing” the tax policy. Since the current corporate tax system has not provided the much wanted and expected benefits, the country is still “suffering” from the significant tax revenue losses. It is the right moment to undertake serious steps toward reforming the Macedonian income tax legislation. These legal changes should be implemented regardless of the status of North Macedonia in the EU integration process, considering that vital interest of every country is to have sustainable and healthy public finances. [ABSTRACT FROM AUTHOR]

Copyright of Runas. Journal of Education & Culture is the property of CICSHAL - Centro de Investigaciones en Ciencias Sociales y Humanidades desde America Latina and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

In 2024 the value added tax becomes 70 years old. This "crown of fiscal technique" arose on the basis of the turnover tax, which in turn was a product of the ancient excise tax. Today value added tax is the backbone of the tax system in almost all countries of the world. This paper is dedicated to the prehistory of the tax, the pioneering experience of France (and the European Union) from the middle of the last century and the implementation of the value added tax in Bulgaria. [ABSTRACT FROM AUTHOR]

Purpose: This study aims to investigate the relationship between trust in government, value added tax (VAT) compliance costs and VAT compliance in the Jordanian retail industry context. Design/methodology/approach: The study makes use of an online questionnaire survey to collect the required data, and the research model is eventually validated based on 189 responses gathered from the retail industry in Jordan. The obtained data was analyzed using partial least squares-structural equation modeling to examine the effects of trust in government and costs of VAT compliance on VAT compliance. Findings: The results showed that VAT compliance costs have no significant influence on VAT compliance; while trust in government was found statistically positive significant with VAT compliance. Practical implications: This study's results are expected to have implications for VAT authorities and policymakers in Arab countries, like Jordan in their policies formulation to enhance VAT compliance in retail industry. The study's findings are alerting the policymakers for the positive noneconomic consequences of VAT compliance. It provides evidence that trust in government can increase VAT compliance. Social implications: The results of the research have a plentiful of social implications. Higher VAT compliance will enable higher levels of government spending on a many of social targets such as health, education, welfare programs and infrastructure. Originality/value: While the study builds on recent research examining how to incentivize VAT compliance, it simultaneously seeks to make three contributions. First, the study design aims to apply recent advances in behavioral sciences (impact of trust in government and VAT compliance costs) in a policy area that has not seen much use of such interventions in the Jordanian context (i.e. VAT compliance). Second, the study is government procedures pertinent in the sense that it aims to increase the effectiveness of existing government policies by complementing them with behavioral primes. Third, there is nearly no literature found applying this topic in a developing country such as Jordan. To the best of the author's knowledge, this is the first study that examines the trust in government and VAT compliance costs on VAT compliance among Jordanian retail industry. Thus, this paper contributes to mitigating the literature gap by providing empirical evidence concerning the influence of trust in government and VAT compliance costs on the retail industry VAT compliance in the Jordanian context. [ABSTRACT FROM AUTHOR]

Are firms sophisticated maximizers, or do they appear to make mistakes? Using transaction data from Ugandan value-added tax returns, we show that sellers and buyers report different amounts 79% of the time, despite invoices being easily cross-checked. Our estimates suggest that most firms are "advantageous misreporters," but that 25% are "disadvantageous misreporters" who systematically overreport own sales minus purchases such that their tax liability increases. Similarly, many firms—especially disadvantageous misreporters—fail to VAT-report imported inputs they themselves reported at Customs, increasing their liability. On net, unilateral VAT misreporting cost Uganda about US$384 million in foregone 2013–2016 tax revenue. [ABSTRACT FROM AUTHOR]

This work aims to analyze the relationship between value added tax (VAT) and economic growth in China and Mexico for the period 1991-2021. This research uses the gross domestic product (GDP) as the dependent variable, for the independent variables this research uses VAT and tax revenue. The test results indicated that for China there is a strong and positive relationship between GDP and VAT, as for Mexico the relationship although positive is not strong. [ABSTRACT FROM AUTHOR]

Estimating effective VAT rates (EVATR) of industries to assess their tax burden and efficiency has drawn much interest in policy research; but the challenge is the lack of industrial Output VAT data. We develop a novel method to recover all VAT statistics at the industry level and endogenously solve EVATR from publicly available data by utilizing input-output relationship in a Computable General Equilibrium (CGE) structure. We apply the method to China's data, estimate EVATR, and analyze implied tax efficiency and the tax burden of individual industries. Our study identifies true reasons for "VAT over-taxation" in some Chinese industries: China's multiple-tier VAT rate system with unrefunded Input VAT and the accounting inconsistency between taxation and national accounts. [ABSTRACT FROM AUTHOR]

Innovation is crucial for technological progress and economic development. Using the value‐added tax (VAT) reform in China as a policy shock, this study explores whether tax incentives are beneficial in promoting corporate innovation. We find that the VAT reform has a significant positive impact on corporate innovation, and the finding holds under a series of robustness checks. Mechanism analysis suggests that the VAT reform promotes firms' innovation activities mainly by alleviating financing constraints and amplifying research and development intensity. This study offers policy implications for using tax policies to stimulate corporate innovation. [ABSTRACT FROM AUTHOR]

This paper investigates the effect of Phase 2 of the Golden Tax Project on the value-added tax (VAT) in China. The reform introduced computer-generated invoices and electronic transaction linking. Using a difference-in-differences strategy, we show that the reform increased VAT by reducing exaggerated VAT deductions. The introduction of the new digital technology had large positive effects on Chinese fiscal capacity. VAT gains from the reform explain approximately 13.7% of VAT growth during 1998–2007. [ABSTRACT FROM AUTHOR]

We discuss the reasons for the introduction of the Goods and Services Tax (GST) in Malaysia, its subsequent abolition, and the factors to consider if it is to be reinstated. The GST was implemented hastily to rein in mounting government deficits and debt. The lack of preparation to address its impact on the general price level, and incomes of poorer households in an economy already predisposed to inflation, led to widespread public discontent. The high compliance costs borne by smaller firms, delays in providing tax refunds to businesses, and the wasteful use of the additional revenues the tax generated strengthened the anti-GST sentiment. Any attempt to bring back the GST must focus on gaining acceptance rather than the revenue it generates. This is best achieved by timing its reintroduction correctly, keeping the rate low, the base broad, and implementing parallel measures to supplement the incomes of households seriously undermined by the tax on the consumption side. Additionally, addressing leakages, waste, and corruption in the public sector will strengthen public acceptance of the tax and instill confidence in public sector fiscal management. [ABSTRACT FROM AUTHOR]

Copyright of Zeitschrift für Abgaben-, Finanz- und Steuerrecht is the property of Verlag Oesterreich GmbH and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

The pioneering step of implementation of GST in India, has brought initial producer's and service provider's and retailers in one tax regime reducing the burden of all other taxes, including the burden of CENVAT and service tax. GST is a Major step designed to streamline the taxation of goods and services. The changes in the tax structure led to the changes in the prices of goods. These changes were significant in few cases and they impacted the consumer behaviour largely. The objective of this paper is to study the consumer behaviour by analysing the impact of GST/Tax policies on automobile industry. The focus of the study is LMV (cars). The purchase pattern of cars is studied before and after the implementation of GST. The hypothesis-based research method is used and tested. The secondary data for the analysis of the production and sales is obtained from Web-based information, literature so far published in the journals is used to analyse the gap. The analysis is carried out using correlations methods such as t-test and paired t-test. This research should add significant value in understanding the implications of GST on purchase behaviour, the paper further tests possibilities of reduction of carbon footprints as an implication of policy change. The reduced number of vehicles will reduce the carbon footprint whereas the increased number of vehicles will increase the carbon footprint. Shift to electric vehicles and achieving green mobility is at the top of the agenda for developed nations. Countries like USA and China are incentivising green mobility through policy changes. India also supports green mobility by no tax and 5% GST. However, the green mobility policies should be enacted in sync with state and centre government. The results should help to understand LMV (Car) sector sales before and after GST and its implications. [ABSTRACT FROM AUTHOR]

The value-added tax (VAT) is a cornerstone of the modern tax system. It has many desirable properties in theory: it does not distort firms' production decisions, it is difficult to evade, and it generates a substantial amount of revenue. Yet, in many countries there are discrepancies between the textbook model of the VAT and its practical implementation. Where the VAT implementation diverges from its textbook model, the tax may lose its desirable properties. We draw on firm-level administrative VAT records from 11 countries at different income levels to examine the functioning of real-world VAT systems. We document four stylized facts that capture departures from the textbook VAT model which are particularly pronounced in lower-income countries. We discuss the effects on VAT performance and simulate a counterfactual retail sales tax and a turnover tax. Despite its shortcomings, we conclude that the real-world VAT is superior to the alternatives. [ABSTRACT FROM AUTHOR]

The value added tax is part of the category of modern taxes and is included in the category of indirect taxes. This type of tax can be found in the economic circuit in the prices of the products, in the successive stages of each stage of the production and distribution of goods of an economic nature. From this perspective, the Value Added Tax qualifies as a universal tax and a neutral tax. The concrete applicability of the Value Added Tax (VAT) is ensured by the Fiscal Code and the Fiscal Procedure Code, which on a national scale in terms of Value Added Tax regulate the following aspects: 1. Scope of Value Added Tax (VAT); 2. The generating fact of the Value Added Tax (VAT); 3. Chargeability of Value Added Tax (VAT); 4. Tax base of Value Added Tax (VAT); 5. The tax rates of the Value Added Tax (VAT); 6. The regime of deductions related to Value Added Tax (VAT); 7. Obligations of Value Added Tax (VAT) payers; 8. Accounting for Value Added Tax (VAT) operations. The main objective of the second part of this work is to research the current legislative changes brought about by the new regulations of the Fiscal Code effective from January 1, 2024 harmonized with the community regulations regarding the common value added tax system. [ABSTRACT FROM AUTHOR]

The article discusses a legal case involving a company's Value-added tax deductions following a corporate spin-off. It highlights objections made by suppliers against invoices, detailing the complexities arising from the waiver of tax exemption, and emphasizes the legal implications and challenges in resolving VAT-related issues post-restructuring.

The article discusses the dispute over input tax refunds and the expiration suspension, particularly concerning a Mauritius-based company's claim for Value-added tax deductions in Germany. It involves the examination of a German office's role in marketing and its connection to the company's operations abroad. It mentions that the tax authority rejected the company's claim, citing lack of domestic output sales and the absence of a taxable presence.

The article discusses the dispute over whether revenue from operating a toilet facility and a parking lot, offered to paying visitors of a museum, is subject to Value-added tax or considered incidental to the tax-exempt museum revenue under German Section 4 No. 20 Letter a UStG. It states that the conflict revolves around a GmbH operating alongside a monument, contesting the tax authority's denial of tax exemption for revenue generated by additional facilities.

The article delves into the value-added tax treatment of remanence costs and severance payments in the exchange of services between a transfer company and the former employer in Germany. It focuses on the legal complexities regarding the VAT applicability to various financial transactions associated with employee transfers to a transfer company, such as additional payments made by the transfer company to the former employer for the provision of extended employee benefits and severance payments.

Copyright of Umsatzsteuer-Rundschau is the property of De Gruyter and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

Copyright of Revista Catalana de Dret Ambiental is the property of Universitat Rovira I Virgili and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

This study examines the influence of the reduction in value-added tax (VAT) rates in China during 2018 and 2019 on corporate financialization. By employing a difference-in-differences model and utilizing data from Chinese A-share listed companies between 2017 and 2020, we assess the effects of tax reduction policies. Moreover, it achieves this outcome through three main pathways: alleviating financing constraints, boosting fixed asset investment, and weakening corporate financial arbitrage motives. Further analysis demonstrates that the inhibitory effect of VAT rate reduction on corporate financialization is more pronounced for non-manufacturing companies, businesses reliant on the basic tax rate as their primary revenue source, companies with low intermediate input rates, and those with a strong ability to shift the tax burden. Additionally, debt financing costs play a crucial role in moderating the relationship between tax reduction policies and corporate financialization. The conclusions drawn from this study provide valuable empirical evidence that can contribute to the refinement of VAT reduction policies and the prevention and resolution of financialization at the micro-level. [ABSTRACT FROM AUTHOR]