Does Accounting for Taxes on Income Provide Information about Tax Planning Performance? – Evidence from German Multinationals


Overesch, Michael ; Schreiber, Ulrich


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URL: https://ub-madoc.bib.uni-mannheim.de/1456
URN: urn:nbn:de:bsz:180-madoc-14561
Document Type: Working paper
Year of publication: 2006
The title of a journal, publication series: Discussion Paper / ZEW
Volume: 06-072
Place of publication: Mannheim
Publication language: English
Institution: Sonstige Einrichtungen > ZEW - Leibniz-Zentrum für Europäische Wirtschaftsforschung
MADOC publication series: Veröffentlichungen des ZEW (Leibniz-Zentrum für Europäische Wirtschaftsforschung) > ZEW Discussion Papers
Subject: 330 Economics
Subject headings (SWD): International Accounting Standards 12 , Einkommensteuer , Finanzbuchhaltung , Betriebsdaten
Keywords (English): International Taxation , Financial Accounting , Income Taxes , Firm-level Data
Abstract: This paper investigates the quality of information on tax planning performance which is provided by financial accounting based on IAS 12 (Income taxes). A simple theoretical investment model is used to show that reported tax expenses can be misleading as an indicator of tax planning performance, since timing effects of tax depreciations are suppressed. However, it is shown that IAS 12 provides meaningful information if tax planning strategies are driven by statutory tax rate differences, e.g. in the case of profit shifting. Our empirical analysis of actual tax planning behaviour, based on a panel of German balance sheet data, suggests that in practice international tax planning is significantly driven by statutory tax rates. However, we find that tax depreciation impacts on the size of investment as well and thus, IAS 12 does not fully disclose tax planning performance.
Additional information:

Dieser Eintrag ist Teil der Universitätsbibliographie.

Das Dokument wird vom Publikationsserver der Universitätsbibliothek Mannheim bereitgestellt.




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Overesch, Michael ; Schreiber, Ulrich (2006) Does Accounting for Taxes on Income Provide Information about Tax Planning Performance? – Evidence from German Multinationals. Open Access Discussion Paper / ZEW Mannheim 06-072 [Working paper]
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