examining the history of the VAT acts in different EU Member States, one can often find that the Member States have maintained some of the legislation that they had before the common EU VAT entered into force. Interestingly, the structure of some VAT acts and some of the provisions in them can be traced back to the time before VAT was introduced. For example, there are provisions in the Swedish VAT act Mervärdesskattelagen (1994:200), the Swedish VAT Act (SVATA). that stems from the omsen , which was the general sales tax that was applied before VAT (SW: momsen ) was
consumption tax Laffer curves. The authors show that Laffer curve for consumption tax rate can be hump shaped if the utility function is additively separable in consumption and labor supply and, on the other hand, it cannot be hump shaped if the utility function is non separable. In this paper, it is shown that the result by Hiraga and Nutahara (2016) breaks down when home production is introduced into the model.
This result of monotonically increasing Laffer curve for consumption tax, which stems from the often used model specification, can be questioned. When the
discussing the background of the phenomena, reviewing prior research and documenting differences in earnings management between types of firms. In Section 3 , I review tax research in accounting with a specific focus on tax-induced earnings management. In Section 4 , I discuss current studies on earnings management in response to CTR changes in private firms. The last section concludes and discusses future research opportunities.
A review of earnings management
Definition of earnings management
The concept of earnings management stems from the trade
obligations owed by Sweden and Macedonia to each other under international law, it was not until the 1998 Act of Parliament entered into force that physical and legal persons resident in Sweden could claim tax relief for dividends on shares paid by a company resident in Macedonia. Obviously, incorporation entails consequences only on the condition that Swedish tax authorities are entitled to impose tax on such dividends according to other tax legislation . The example highlights the importance of clearly distinguishing, on the one hand, the effects stemming from a tax
Axel Hilling, Niklas Sandell and Anders Vilhelmsson
businesses), the tax rules de facto result in highly taxed work income being shifted to capital income, with its lower tax rate.
Legitimate or illegitimate tax planning?
In the previous section, we demonstrated that the options for owners of close companies regarding the classification of their income as stemming from labor or capital, is clearly given to them by the legislation, and constitutes an intentional tax policy. In other words, the legislation embodies a tax policy whereby individuals are encouraged to run close companies and thereby contribute to greater
interest rate on government bonds. In Belgium, however, losses cannot be carried with interest and unutilized losses when a firm goes out of business cannot be offset against other taxable income. Moreover, unused NID cannot be carried forward since 2013. Hence, there will be some risk attached to the NID deductions. The risk will differ across companies, depending on how much they are affected by the restrictions on loss offsets. A substantial part of the risk is likely to stem from the probability that the company goes bankrupt. This risk will be reflected in the rate
situations where international double taxation could arise. In reality, companies (and the alike) were exempted from the universality principle for many years, because of the special domestic rules on foreign relief ( udlandslempelse ), cf. SL sec. 6(f) (Den.). Upon the passing of the Corporate Tax Act in 1960, the advantages stemming from foreign relief were reduced, cf. Selskabsskatteloven [SEL] (Corporate Tax Act] (Den.), Law. no. 255 of June 11,1960. However, the access to foreign relief was not completely terminated until the passing of Law no. 486 of June 30, 1993