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Copyright of Contemporary Accounting Research is the property of Canadian Academic Accounting Association 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.)

We examine the association between aggressive tax planning and labor investment efficiency among U.S. firms. Labor is an important input to production that is material to many firms, and prior research suggests that inefficient labor investments can negatively affect future profitability and growth. We provide evidence that firms engaging in aggressive tax planning are associated with deviations from expected labor investments, which is indicative of labor investment inefficiency. We find that our results are concentrated in labor underinvestment, consistent with risks and uncertainties from aggressive tax planning making firms more cautious when investing. Our findings are strongest among firms with greater tax risk, higher labor costs, and weaker corporate governance. Our study contributes to the literature examining tax planning consequences by providing evidence that a tradeoff exists between aggressive tax planning and investments in labor. Therefore, our results suggest that managers should carefully consider the cash flow benefits of tax planning in conjunction with the potential effects of lower labor investments to ensure that the overall long-term effect of the tax strategy is value-increasing. [ABSTRACT FROM AUTHOR]

Copyright of Contemporary Accounting Research is the property of Canadian Academic Accounting Association 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 Contemporary Accounting Research is the property of Canadian Academic Accounting Association 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.)

We investigate whether the Tax Cuts and Jobs Act (TCJA) of 2017 motivated firms to increase capital investments. Using a unique approach that identifies firm-level tax benefits and incentives introduced by the TCJA, we find that firms that realized tax benefits increased their investment in fixed assets in the following year. Specifically, as a result of the change, an increase in forecasted earnings and an increase in nonrecurring tax benefits stimulated growth in capital investments. We also find that the investment-inducing effect of the TCJA was larger for firms with a higher cost of capital and for those with better alignment between management and shareholder interests. Although our study is not able to explain the long-term consequences of TCJA, it improves upon the previous literature demonstrating that the mixed findings of previous studies may be the result of the unequal distribution of tax benefits among firms. [ABSTRACT FROM AUTHOR]

It is important of tax burden stickiness to reveal the special phenomena that the operating conditions of enterprises are not synchronised with the changes of tax burden, but research on overall tax burden stickiness in emerging markets is relatively scarce. This study aims to investigate the suppressing effect of R&D investment on overall tax avoidance and overall tax burden stickiness of Chinese listed companies. We obtain the following conclusions: (1) Overall tax burden stickiness exists among listed Chinese companies. (2) Chinese listed companies have generally significant overall tax avoidance. (3) Overall tax avoidance has a significant positive direct effect, alleviating overall tax burden stickiness, but R&D investment partially offsets the positive influence of overall tax avoidance on overall tax burden stickiness, and the suppressing effect reaches 0.007. Our results illustrate that the implementation of tax planning for R&D projects can reduce R&D investment, so overall tax avoidance will deteriorate overall tax burden stickiness through R&D investment. Therefore, to improve resource utilisation efficiency and tax burden sensitivity to changes in revenue, tax planning should strike a balance between an effective reduction of R&D investment and alleviating tax burden stickiness as operating conditions fluctuate to achieve maximum tax benefits. [ABSTRACT FROM AUTHOR]

Similar to other countries, Australian firms are increasingly using corporate foundations (CFs) to manage their philanthropic giving. While research has explored the global expansion of CFs, there has been limited understanding on why they are established. This study involving 16 Australian CF managers used qualitative thematic analysis to identify the following four motivational factors that most influence organizational establishment of CFs: 1) centralizing corporate giving; 2) stakeholder influences; 3) financial advantages of foundation structure; and 4) strategic benefits to the establishing firm. The results suggest most Australian firms establish CFs to undertake strategic philanthropy, assisting those in need while capitalizing on the legitimizing social benefits. Many also use it to market activities to their staff, thereby enhancing internal engagement and retention. Yet despite such positive benefits, there is rarely a reduction in principal-agency costs when using a structured CF controlled by corporate executives rather than ad-hoc corporate giving. Furthermore, the decision to establish a CF is often based on normative isomorphism (copying competitors). Additionally, no CFs were established for direct taxation benefits, rather most were focused on the tax benefits associated with employee giving and donations from the general public. The uniqueness of these results, compared with other research, suggests there could be differing motivations to establish CFs based on the organization and the environment of the country where it is located. [ABSTRACT FROM AUTHOR]

I show that the corporate group structure generates tax benefits that create incentives for higher leverage. The tax benefits arise when losses on distressed subsidiaries are tax deductible for a parent firm. Higher tax rates then imply that more of these losses are borne by the government instead of the parent firm, reducing the expected costs of bankruptcy and thereby incentivizing the subsidiaries to take on higher leverage. Using data from a large sample of European multinationals, I show that this tax benefit exists on top of the trade-off theory and debt-shifting effects, and is stronger when deductions of subsidiary losses are more generous. [ABSTRACT FROM AUTHOR]

Problem definition: Opportunity zones (OZs) are designated census tracts in which real estate investments can gain tax benefits. Introduced by the U.S. Tax Cuts and Jobs Act of 2017, the goal of the OZ program is to foster economic development in distressed neighborhoods. In this paper, we investigate and optimize the OZ selection process and examine the impact of OZs by exploiting two data sets: a proprietary real estate data set that includes 36.1 million residential transactions spanning all 50 U.S. states and census-tract demographics data between 2010 and 2019. Methodology/results: We show that census tracts with higher poverty and unemployment rates were more likely to be selected. Counterintuitively, however, tracts with a higher average real estate price were also more likely to be selected. We then apply difference-in-differences, synthetic control, and matching techniques to rigorously assess the impact of the OZ program on two key real estate metrics: price and transaction volume. We find that the OZ program increased real estate prices by 4.03%–6.13% but do not observe a significant effect on the transaction volume. We also find that investors primarily targeted the high-end real estate market, namely, exhibiting a cherry-picking behavior. To better fulfill its intended societal and economic goals, we propose an optimization framework with fairness considerations for OZ assignment decisions. We show that the OZs assigned from our fairness-aware optimization formulation can better serve distressed communities and mitigate investors' cherry-picking behavior. Managerial implications: Our paper underscores the importance of incorporating fairness in OZ designation to achieve a desirable real estate market reaction. Our large-scale empirical analysis provides a comprehensive assessment of the current government OZ assignment, and our fairness-aware optimization framework provides concrete recommendations for policy makers. Supplemental Material: The online appendix is available at https://doi.org/10.1287/msom.2024.0746. [ABSTRACT FROM AUTHOR]

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.)

This study investigates the association between variable rate premiums (VRPs) charged by the Pension Benefit Guaranty Corporation (PBGC) and defined benefit pension funding in the United States. The PBGC requires VRPs from firms that fail to adequately fund their pension plans. Because millions rely on pension income, it is important to understand how government incentives impact pension funding decisions. In the aggregate, VRPs are positively associated with increases in pension funding. However, these premiums are not associated with excess pension contributions (EPCs) for financially distressed firms. These results suggest that financially distressed US firms engage in risk shifting. The lack of association persists even for financially distressed firms with tax benefits associated with pension funding. Finally, the association between VRPs and EPCs holds only for firms with combined lower borrowing costs and higher premiums. This finding suggests that higher premiums are not an effective incentive when firms also face higher borrowing costs and that lower premiums are not an effective incentive for EPCs, regardless of a firm's borrowing cost. [ABSTRACT FROM AUTHOR]

A dual holder simultaneously owns (private) debt and equity in the same firm. Private debt has a tax advantage, a positive cashflow, which incentivizes its use. This cashflow leads to a lower net cost of debt, which again reduces default risk as well as the cost of external debt. The usual trade‐off between tax benefits and bankruptcy costs is altered. Debt priority affects both financing and default decisions. We find that an enterprise‐value maximizing firm should issue senior, external debt and junior, private debt, rather than debt with pari‐passu priority. Our analysis further highlights that tax authorities can effectively curtail the tax‐motivated use of private debt through straightforward measures. [ABSTRACT FROM AUTHOR]

This study investigates the influence of climate risks on the tax shields of US-based firms. The findings show a significant negative correlation between climate risks and debt-related tax shields (DTS), indicating reduced reliance on debt financing due to potential financial risks and regulatory uncertainties. Conversely, non-debt tax shields (NDTS) demonstrate a positive relationship with climate risks, highlighting firms' proactive efforts to seek tax benefits from alternative sources. Additionally, the study uncovers distinct dynamics for high and low-leveraged firms in utilizing tax advantages. The research contributes valuable insights into the intricate interplay of climate risks, tax benefits, and corporate financing decisions. [ABSTRACT FROM AUTHOR]

This study examines the effects of the interaction of a size-dependent tax policy that exempts firms whose stated capital is at or below a certain threshold from taxation and financial frictions on firm growth and financing. Our empirical findings can be summarized as follows: First, firms with lower productivity, a positive potential tax benefit, and smaller stated capital are more likely to conduct the cash-out capital reduction to or below the threshold in response to the policy. Second, this capital reduction causes ex-post lower firm growth and fewer debt. Third, such causal effects are observed for firms with less cash flow ratios. These results indicate that the interaction between a size-dependent tax policy and financial constraints deters firm growth. Plain English Summary: The interaction of a size-dependent tax policy that exempts firms whose stated capital is at or below a certain threshold from taxation and financial frictions deters firm growth. We use the introduction of the pro forma standard taxation system in Japan that exempts firms (SMEs), whose stated capital is at or below a threshold, from taxation to empirically examine how firms react to this institutional change and how such a reaction systematically affects their financing and real outcomes. We show that size-dependent tax policies can have a significant effect on firms' growth and financing through financial constraints. It indicates that firms decide whether to obtain an SME status by considering the trade-off between a more severe borrowing constraint and a smaller tax payment. The results obtained in this study indicate that such indirect effects of a size-dependent tax policy on firm dynamics should be considered when designing the policy. Moreover, governments should understand that an institutional change in their tax systems generates a heterogeneous reaction from firms and thus has heterogeneous effects on their dynamics. [ABSTRACT FROM AUTHOR]

Taxation problems are traditionally relevant. Currently, this issue is becoming even more relevant due to the need to transform the Russian tax system, considering the need to ensure sustainable economic development. The issues of tax reform for both individuals and legal entities are considered by many researchers, however, some aspects have not been sufficiently studied and covered in the specialized scientific literature. In particular, the presented work examines the possibilities of using tax incentives to involve individuals more actively in investment processes. Proposals for the implementation of these measures are presented. The research also discusses some of the most relevant areas of tax administration that need to be actively developed in the near future.

Recent years have been characterized by significant fluctuations in the economy due to the influence of external factors, such as the pandemic, which significantly affected the economy of Ukraine, and the full-scale invasion of Russia. Value added tax is an essential part of the state budget revenues, which was also subject to constant changes under the influence of these circumstances. During this period, both business practices and legislative initiatives underwent significant changes. The article analyzes revenues to the state budget over the past five years, identifies important components in the structure of filling the state budget, and defines the value added tax as the main revenue part of the state. The tax under study directly depends on external and internal factors that affect the economy and the state in general, and a large number of changes occur due to the pressure of such factors on the functioning of the state and citizens who conduct their activities both in the middle of the country and with foreign counterparties. The latest changes regarding the procedure for registration of VAT payers, changes in VAT rates, both in the general and simplified taxation systems, in relation to VAT benefits, VAT in export and import transactions, the application of fines for violation of VAT legislation, as well as the preparation of tax returns were considered. invoices and tax declaration with VAT. It is taken into account that each country independently regulates the legislation on the tax burden, taking into account the peculiarities of its economic situation, therefore the experience of other countries is taken into account. It was emphasized that the reform of the taxation system should ensure not only an increase in revenues to the state budget, but also should be acceptable to citizens as direct tax payers.

For harmonious socio-economic development of the Russian Federation, national goals in the most important spheres of the state were defined. The first Decree of the President of the Russian Federation, signed by V. V. Putin 07.05.2024, defined the national goals until 2030 and for the period until 2036. The strategy of spatial development of Russia until 2030 is aimed atreducing the high level of uneven development of individual territorial parts of the state, which will increase the sustainability of the economy. Tax incentive instruments have a significant role to play in achieving the objectives set. In order to realize the task of increasing the effectiveness of tax instruments of impact on economic processes, it is important to have a correctview of the terminology used in the development of economic, including tax, policy, which has become the central subject of the study. The purpose of the study is to offer the author’s identification of such definitions as: spatial, territorial, regional, cluster development; tax preferences and tax benefits; special tax regimes; regional tax policy and others. It is proved that the allocation of spatial development as an object of influence of tax policy is the result of institutionalization of multilevel tax regulation. The classification of tax preferences with the allocation of those important for spatial development and the proof that special tax regimes are a form of preferences is proposed. The classification of tax instruments as a manifestation of multilevel system of tax regulation in the context of stimulating spatial development of the country is shown. The diversity of special tax regimes, the content of which is realized both within the framework of regional tax policy and based on the competence of tax policy of the regions, is stated. Conclusion: the use of theoretically verified tax terminology in the justification of tax innovations will improve the quality of decision-making for the spatial development of the country.

By means of counterfactual simulation methods, this paper quantifies the role of tax–benefit policies in mitigating the shock of the COVID-19 pandemic to household income in the European Union. The tax-benefit microsimulation model for the European Union EUROMOD is used to decompose changes in the income distribution into the effects of: (i) earnings losses due to COVID-19, (ii) automatic stabilizers, (iii) monetary compensation schemes introduced during the pandemic; and (iv) COVID-19-specific reforms to taxes and benefits implemented by European Union governments. The results show a great deal of heterogeneity between countries in terms of earnings losses and the effect of tax-benefit policies during the COVID-19 pandemic. In most countries, the largest contribution to cushioning the economic shock of the pandemic comes from monetary compensation schemes. Automatic stabilizers also play a role, mainly through the effects of social insurance contributions, taxes, and unemployment insurance benefits. Tax-benefit systems cushioned incomes to a large extent even among those most severely affected by the shock to earnings, with an important role for monetary compensation schemes, but also a larger stabilizing effect of unemployment insurance. Among automatic stabilizers, social assistance benefits played an important role in cushioning the income shock for the poorest quintiles among the most severely affected, but only in selected countries. [ABSTRACT FROM AUTHOR]

This document provides summaries of research papers published in the Journal of the American Taxation Association. The first paper examines the relationship between stock price incentives and earnings management using tax expense. It finds that while stock price incentives are not significantly associated with earnings management on average, firms are more likely to manage earnings using tax expense as opportunities increase. The second paper discusses the impact of corporate tax disclosure regulation and highlights the limited effectiveness of disclosure regimes. The third paper presents a field experiment conducted by the California Franchise Tax Board, showing that improving Interactive Voice Response systems can enhance tax collection efficiency. The fourth paper investigates the effect of the Tax Cuts and Jobs Act on employees' pay satisfaction, finding a greater decline in satisfaction at firms announcing bonuses compared to those that do not. These papers offer valuable insights into various aspects of taxation and have implications for policymakers and firms. [Extracted from the article]

We document the evolution of working‐age individual pre‐tax and disposable income inequality in France since the late 1960s using household surveys. Disposable income inequality declined over the 1960s and 1970s and remained stable thereafter. This trend can be explained, in part, by changes in the tax and benefit system, notably through changes in employer contributions, and the evolution of the national minimum wage. Other dimensions than income bring a less positive perspective: low‐income individuals are now more likely to be immigrants, have low education, and live in households with no working adults. [ABSTRACT FROM AUTHOR]

This paper begins by contrasting the caricatures 'homo and femina economicus' with 'homo and femina realitus'. Against this backdrop, the paper considers three 'apparently falsified' empirical predictions of the standard expected utility model of individual decision-making concerning participation in fiscal crimes: that tax evasion and benefit fraud can be treated identically; fiscal crimes should be endemic; and that all individuals, depending on parameter values, should be either honest or dishonest. A utility function relating to decisions with a moral dimension is used to offer insight into the rationalization of the predictions and involves defining an individual's 'optimal honesty' in the context of fiscal crimes. The policy implications of the approach are briefly explored. [ABSTRACT FROM AUTHOR]

This paper studies the role of fiscal capacity in European state consolidation. Our analysis is organized around novel data on the territories and cities of the Holy Roman Empire in the early modern period. Territories implementing an early fiscal reform were more likely to survive, increased in size, and achieved a more compact extent. We provide evidence for the causal interpretation of these results and show key mechanisms: revenues, military investments, and marriage success. The imposition of Imperial taxes, quasi‐random in timing and size, increased the benefits of an efficient tax administration on the side of rulers, driving the implementation of fiscal centralization. Within territories, Chambers became the dominant administrative institution, tilting the consolidating states toward absolutism. [ABSTRACT FROM AUTHOR]

This study examined the impact of changes in tax codes on voluntary giving to universities and colleges. While higher education institutions have drawn attention to individual gifts and philanthropic donations as supplementary financial resources, the recent introduction of the Tax Cuts and Jobs Act of 2017 in the United States reduced tax incentives for charitable contributions, thus raising concerns regarding considerable declines in charitable giving. By using panel data from the Voluntary Support of Education Survey, this research revealed that changes in tax benefits on charitable giving as a consequence of the new tax policy are associated with an overall decrease in the sum of individual donations and the number of individual donors. This loss of voluntary contribution is notably observed in private colleges and universities with an emphasis on research activities. [ABSTRACT FROM AUTHOR]

This study investigates the efficacy of two prominent valuation methods, Weighted Average Cost of Capital (WAAC) and Adjusted Present Value (APV), in assessing the financial performance and worth of companies with complex financial structures and varying cash flows. Our analysis reveals that APV, which considers tax benefits and other non-operating items, provides a more comprehensive and accurate valuation compared to WAAC. The results show that APV valuations are lower than WAAC valuations, considering significant tax benefits and debt. This research contributes to the ongoing debate on valuation methods and provides insights for investors, analysts, and researchers seeking to accurately value companies with complex financial profiles. [ABSTRACT FROM AUTHOR]

Optimal strategies are a key lever for business success in the current difficult conditions, and the hospitality sector is no exception. The aim of the study was to determine how management practices affect economic indicators in the hospitality sector. The research employed methods of regression and correlation analysis, and descriptive statistics analysis. Cost management was found to have a positive effect on the Return on Assets (ROA) (0.088) and the Occupancy Rate (0.191). The analysis showed that the factor of staff training investment has a positive but weak effect on the return on assets (0.068) and the utilization rate (0.005). It was identified that the seasonality factor also has a positive effect on the utilization rate (0.510). The market competition factor was found to have a slight negative effect on the profitability of assets (-0.018) and the utilization rate (-0.009). Key financial management tools such as the development of a detailed budget and regular updating of business financial forecasts are identified. Emphasis is placed on the importance of managing cash flows to ensure the necessary liquidity and planning short-term financial needs. Optimization of the tax burden through the use of tax benefits as an element of financial management in difficult business conditions is proposed. Further research will focus on the impact of digitalization on optimal business strategies and their impact on the main economic indicators in the hospitality sector in view of increased uncertainty in the business environment. [ABSTRACT FROM AUTHOR]

The choice of inventory cost flow assumption is a key financial reporting decision. The resurgence of inflation has renewed interest in this option. We derive algebraic models of the LIFO‐FIFO difference in cost of goods sold and the LIFO tax savings as a function of inflation, turnover, inventory increments, and tax rates. Managers and researchers can use these models to estimate the likely financial and tax impacts of LIFO adoption. Historic trends in public company LIFO usage since 1971 are consistent with the changing impacts estimated by our model. We infer an approximate cost level of using LIFO based on historic public company behavior. In the 1971–2022 period, LIFO adoptions were only common when the tax benefit in our model exceeded about 0.35% of COGS. Even when inflation rose in 2021 and 2022, the tax savings remained below this threshold, and there were far more LIFO abandonments than adoptions. [ABSTRACT FROM AUTHOR]

Using a model from political economy, we predict that U.S. Internal Revenue Code sections and related Treasury Regulations will have more verbiage, complex terms, and cognitive complexity for tax-reducing sections to limit free riding and the scope of tax benefits. Using textual analysis, we find our model's predictions are generally supported using both Code and Regulations from 1997 to 2017. Importantly, the complexity of tax-reducing sections has a disproportionate impact on the Code and Regulations as a whole, which in turn may result in outsized compliance time and costs. Policy implications include that complexity (and related deadweight costs) may be an unavoidable feature of tax law, that tax benefits may be underutilized, and that suboptimal taxpayer behavior may result. [ABSTRACT FROM AUTHOR]

We propose a general structural model for valuing risky corporate debt securities within a two-dimensional framework. The state variables in our model include the firm's asset value, described as a geometric Brownian motion stochastic process, and the short-term interest rate, following a mean-reverting Ornstein–Uhlenbeck stochastic process. Our model accommodates flexible debt structure, multiple seniority classes, tax benefits, bankruptcy costs, and a stochastic endogenous default barrier. The proposed methodology relies on a two-dimensional dynamic program coupled with finite elements where key transition parameters are computed in closed form, and effective approximations using local interpolations are made during backward recursion. Our design incorporates space discretization without imposing time discretization, which is advantageous, particularly in the valuation of corporate bonds where exercise opportunities are often distant. Our methodology distinguishes itself by assuming a numerical error, setting it apart from statistical methods. Together, the above features establish dynamic programming coupled with finite elements as a competitive valuation approach as compared to its counterparts in the existing literature. We use parallel computing to enhance the efficiency of our methodology. We conduct a numerical and and an empirical investigation, both of which show consistency with several empirical evidence documented in the literature. [ABSTRACT FROM AUTHOR]

developed and vibrant corporate bond market provides an important means of financial resources to corporate, in addition to bank financing. It brings transparency and prudence into financial system and helps in minimizing risks in financial system through diversification. The main objective of this study is to find out the various issues and hurdles faced by retail investors and come out with appropriate suggestions in this regard. A modest attempt has also been made to understand the present status of the Indian corporate bond market in reference to retail investors participation. The study reveals that, in spite of sincere efforts of policymakers, the participation of retail investors in Indian corporate bond market are negligible. It has also been observed that the important issues of retail investors are related to safety of principal, returns, liquidity and tax benefits. It is expected that the suggestions made in this paper, if implemented, will definitely helpful in attracting retail investors to Indian corporate bond market. [ABSTRACT FROM AUTHOR]

Copyright of FinanzRundschau 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.)

"It is not in the stars to hold our destiny, but in the tax benefits." Californians are accustomed to the occasional earthquake, technically the movement of tectonic plates far below the earth's surface. Most are benign (we stir our coffee with a 5.4 reading on the Richter scale), but a few are significant. In New York, the life and annuity industry--and resident consumers of insurance products--experienced a different kind of tectonic movement in the confirmation of new Client Best Interest and Product Suitability rules governing the sale of insurance products in New York. ("It's not in the stars to hold our destiny but ourselves" is a well-known Shakespearean quote about fate and destiny. The quote similarities are significant!). [ABSTRACT FROM AUTHOR]

This article investigates the occurrence and outcomes of corporate tax-related political activity through bribery. Specifically, it examines the extent to which firms bribe government officials through gift-giving, banqueting, and entertaining activities and the extent of payoffs that firms gain from these bribery practices. Using a large hand-collected dataset of Chinese listed firms for the period from 2009 to 2014, I find that firms that spend more on consumption bribery exhibit a significantly lower tax burden. This negative association is mainly driven by small firms, non-state-owned firms, state-owned firms with weak political connections, and firms in competitive industries. Further evidence shows that the tax benefits from bribery are more apparent in more corrupt, less economically developed, and less liberalized regions. Furthermore, the payoffs of tax bribery are mitigated by 45.4% after the implementation of China's anti-corruption campaign in 2012. These findings have policy implications for governments to optimize investment environments and increase tax revenue by curbing power-for-money deals. [ABSTRACT FROM AUTHOR]

The paper offers a comprehensive review of the investment environment in the Netherlands, a nation noted for its advanced economy, robust international trade links, and a solid legal framework that supports business activity. The Netherlands features a stable political environment, transparent governance, and administrative efficiency, creating a reliable backdrop for investment. This climate is conducive to innovation and attracts foreign direct investment, especially due to an advantageous tax system. The workforce in the Netherlands is highly skilled and multilingual, which is a critical asset, though the high labor costs could be seen as a deterrent. However, these costs are often offset by the high productivity and the business-friendly policies of the government. The Dutch market is well-connected and integral to the European trade landscape, making it a strategic entry point into the European Union. Transport and logistics infrastructure, particularly the Port of Rotterdam—the largest port in Europe—plays a crucial role in facilitating trade not only across Europe but globally. This infrastructure is supported by a top-tier digital network and service sector, with the Netherlands boasting one of the highest broadband penetration rates in Europe. Despite its many advantages, the investment climate in the Netherlands does face challenges such as regulatory complexity and stringent environmental regulations. These challenges are balanced by the country’s commitment to sustainability and the green economy, which opens up new investment opportunities in renewable energy and sustainable technologies. Furthermore, the Netherlands is proactive in fostering a favorable business environment through various government initiatives. These include incentives for research and development, enhancements in sustainable business practices, and subsidies for green energy projects, all aimed at maintaining the country’s competitive edge. The Dutch government’s approach to international business is also characterized by a network of treaties designed to protect foreign investments and prevent double taxation, making the Netherlands an attractive destination for multinational corporations. The presence of a strong legal system ensures that property rights and contracts are well protected, which is a critical consideration for investors. In conclusion, the Netherlands presents a balanced spectrum of opportunities and challenges. While the high cost of operations and regulatory demands pose hurdles, the strategic advantages, robust infrastructure, and government incentives create a favorable environment for significant investment returns. This detailed analysis serves as an essential guide for potential investors, providing insights into both the macroeconomic stability and sector-specific prospects within the Dutch market.

The subject of the study is a set of measures of tax incentives for the information technology industry in the Russian Federation — “tax maneuver in IT”, launched from the beginning of 2021. The purpose of the study is to identify and qualitatively assess the stimulating effect of the tax maneuver in IT, which is expressed in changes in key financial and natural performance indicators of IT industry organizations, and to develop proposals on ways of tax incentives for the development of the industry. The article describes the distortion of the aggregate tax reporting characterizing the IT industry, which takes into account not only recently established IT organizations, but also “nominal” separates from large organizations IT subdivisions or technically clarified classification code, making it inappropriate to use such reporting as a basis for analysis and reliable conclusions. Based on the data of the public financial statements of selected sample from the top-100 Russian IT organizations, the article analyzes the dynamics of financial indicators of their activities, among which are the profiles of profiles, operating profit, net profit, investment in basic assets, the number of staff, the amount of products supplied for export, the capitalization of the company. The observation was conducted for 2017– 2022 and covers the periods both before and during the engagement of tax benefits. A comparative study was carried out with similar indicators of the organizations of the “control group”, which included IT companies operating in other countries that were not affected by such tax benefits. According to the results of the study, small or no extra growth was observed in key financial indicators of IT organizations due to the tax maneuver compared with the “pre-maneuver” period and compared with the indicators of the control group. It is concluded that there is no evidence of a significant impact of the tax maneuver on the development of the IT industry in Russia. We proposed dismantling of the “maneuver” and transition, based on the Chinese and some EU countries approaches, to taxation of the qualified profit. The latter is the profit of Russian and foreign IT developers from the localization of IT development and value creation in Russia. The achievable effective rate is 2.5%.

For many planners, being able to achieve a step-up in basis at the death of a client is the most important tax planning goal in developing the plan. In many instances, this supersedes the goal of minimizing estate taxes. The reason for this is that, with the currently large exemption, for many clients the estate tax is minimal or nonexistent. Most planners are familiar with the basic step-up rule of Internal Revenue Code (IRC) Section 1014, namely, that if property is includible in the estate, the assets receive the stepup. However, IRC Sec. 1014 is more complex than that. The highest planning result, obviously, would be in having assets being estate tax free and still getting the step-up. As a result, a number of tax professionals are revisiting what at the time was a little-noticed Private Letter Ruling from 2012. In this ruling, a grantor irrevocable trust received a step-up in basis when the assets were distributed at the death of the grantor. This renewed interest has concurrently spurred Congressional calls for repealing the ability to get this seemingly double tax benefit. This article describes in detail the operation of IRC Sec. 1014 and how the IRS reached the positive decision in 2012. It examines the basis for the decision, as well as some of the current counter arguments. In addition, it examines some other arguments supporting the 2012 decision. [ABSTRACT FROM AUTHOR]

This study develops a recent database of corporate inversions, and we descriptively explore three different corporate inversion timeframes from 1982 to 2022. We examine how the external governance mechanism of the legal environment has impacted the structure, destination countries, industry preference, and firm-level effects of inverting firms over these timeframes. In addition, we highlight the various internal corporate governance mechanisms (board characteristics) and common accounting variables and ratios during these same periods. We find that inverting firms' boards during our later inversion period of 2018–2022 are smaller and less experienced and accounting ratios exhibit riskier profiles than the earlier inversion time periods. Besides building on the inversion literature, our findings should be of interest to practitioners and regulators who are interested in the current trends of inversions and we highlight new industry clustering in the manufacturing and service sectors and new inversions comprise mostly cannabis companies in the wake of conflicting federal, state and securities laws. [ABSTRACT FROM AUTHOR]

The article outlines accounting standards updates issued by the U.S. Financial Accounting Standards Board to its Accounting Standards Codification in 2023. The updates cover common control arrangements in leases, equity method and joint ventures in investments in tax credit structures, presentation of financial and income statements, distinction of liabilities from equity, stock compensation, joint venture formations, disclosure requirements in codification, and cryptocurrency asset disclosure.

Although the effect of fiscal drag is well‐studied in the industrialised world, empirical evidence from developing economies remains limited. Against this backdrop, this study aims to explore the effect of fiscal drag on income distribution and work incentives. To this end, the study employs SOUTHMOD, the tax‐benefit microsimulation model, for six African countries: Ethiopia, South Africa, Tanzania, Uganda, Mozambique, and Zambia. Three important conclusions are drawn from our empirical investigation. First, in the absence of proper tax parameter adjustment, the distribution of fiscal drag is determined by the liability progression of personal income tax in the pre‐inflation period. Second, the impact of fiscal drag on the redistributive effects and progressivity of personal income taxes is differentiated among countries. On the one hand, it reduces the progressivity of personal income tax in Ethiopia, South Africa, Tanzania, Uganda, and Zambia; on the other hand, it improves progressivity in Mozambique. However, it decreases the redistributive effect of personal income tax only in Ethiopia, Tanzania, and Uganda. Third, fiscal drag reduces financial work incentives to increase earnings in all countries. Addressing fiscal drag becomes very crucial considering the soaring inflation due to the war between Ukraine and Russia. [ABSTRACT FROM AUTHOR]

This research simulates the impact on tax liabilities of five tax provisions that provide benefits to farm households by race and ethnicity. Using pooled data from the Agricultural Resource Management Survey (2017–2021), we find that, relative to White non‐Hispanic principal operator farm households, certain business tax benefits are less prevalent and of lower value for Hispanic, African American, and Native American principal operator farm households due to differences in income and investment levels. Household tax credits are significantly higher for Hispanic and Native American principal operator farm households and Asian principal operator farm households have significantly higher total tax benefits from the five provisions examined. [ABSTRACT FROM AUTHOR]

This article examines the issue of labor shortages in various countries, particularly in OECD countries, and how the COVID-19 pandemic has exacerbated this problem. It discusses the factors contributing to labor shortages, such as temporary demand-driven shortages and shifts in the labor force. The article emphasizes the potential impact of labor shortages on global growth, trade, and inflation, especially in developing and emerging countries. It also explores the decline in average hours worked and its implications for labor market adjustment and wage growth. The article suggests that policymakers should focus on mobilizing untapped labor supply, improving skills, and promoting productivity through digital and green transitions. Additionally, it discusses the potential role of artificial intelligence (AI) in addressing labor shortages, but highlights the concentration of market power in the AI industry as a barrier. The article concludes that addressing labor shortages requires a comprehensive approach that considers various factors such as demographics, migration, education, and macroeconomic conditions. [Extracted from the article]