Transfer pricing as tax avoidance under different legislative schemes

This paper investigates transfer pricing as tax avoidance before and after reforms of anti-avoidance legislation. The reforms introduced and tightened obligatory documentation requirements for transfer prices to enforce that multinational enterprises (MNEs) set internal transfer prices at an arm's-length. Linking data from the Microdatabase Statistics on International Trade in Services that comprehends prices of MNEs' international service transactions to the Microdatabase Direct Investment, I create a unique, novel data set to obtain information on whether MNEs' transaction partners are affiliated companies or not. The results provide empirical evidence for tax-motivated transfer pricing during the entire first decade of the 2000s. Interestingly, MNEs target different types of service transactions for profit shifting via transfer pricing depending on the at the time applicable anti-shifting legislation. The findings show transfer pricing legislation to be effective in case of service transactions with observable market values. In contrast, the results clearly reveal the short-comings of transfer pricing legislation in case of intellectual property (IP) where an effective enforcement of the arm's-length principle is very limited as market values are unobservable. Here, the findings suggest the need for a change in tax policy in order to effectively prevent base erosion in case of IP-related transfer pricing

Economic Integration and Local Tax Mimicking

This paper provides empirical evidence for tax mimicking among unicipalities by exploiting a quasi-experiment in the German local fiscal equalization scheme. We show for the metropolitan area FrankfurtRheinMain that, besides neighborhood, the degree of economic integration of municipalities determines the interdependency among their tax policies. As the metropolitan area spreads across municipalities located in the two German federal states, Hesse and Rhineland-Palatinate, we can show that Rhineland-Palatine municipalities statistically significantly respond in their local tax rates to an exogenous change in the Hessian local fiscal equalization scheme. However, we find tax rate interdependency only for Rhineland-Palatine metropolitan municipalities which are arguably strongly economically integrated with Hessian metropolitan municipalities. The results suggest that regional economic integration is a key determinant for tax mimicking

Economic integration and interdependence of tax policy

This paper provides empirical evidence for interdependence of jurisdictions' tax policies. We study tax policy interdependence between municipalities in the economically integrated European Metropolitan Area Frankfurt/Rhein-Main, that spreads across two German states, Hesse, and Rhineland-Palatinate. For empirical identification, we exploit two reforms in the Hessian local fiscal equalization scheme in the 1990s that induced quasi-experimental variation in Hessian metropolitan municipalities' business tax rates. In response to the Hessian metropolitan municipalities' tax rate increase, Rhineland-Palatine metropolitan municipalities increase their local business tax rates more moderately as compared to a matched control group of Rhineland-Palatine non-metropolitan municipalities. We argue that primarily tax competition considerations drive the results, as the average tax-rate differential between metropolitan municipalities in Rhineland-Palatinate and Hesse stays stable during the analysis period. We conclude that an arguably strong economic integration of municipalities seems a key determinant for the interdependence of their tax policies

Stock Market Behavior on Ex-Dividend Dates: The Case of Cum-Ex Transactions in Germany

The paper explores the effect of cum-ex trading on the stock market on ex-dividend days. A loophole in the German withholding tax system until 2011 enabled cum-ex traders to achieve the issuance of cash-equivalent withholding-tax certificates without previous tax payment. The paper discusses the implications for the capital market equilibrium and derives empirical predictions for stock market behavior. The results indicate a major impact of the loophole on the capital market and trading volumes

Ligand-based design of selective peptidomimetic uPA and TMPRSS2 inhibitors with arg bioisosteres

Trypsin-like serine proteases are involved in many important physiological processes like blood coagulation and remodeling of the extracellular matrix. On the other hand, they are also associated with pathological conditions. The urokinase-pwlasminogen activator (uPA), which is involved in tissue remodeling, can increase the metastatic behavior of various cancer types when overexpressed and dysregulated. Another member of this protease class that received attention during the SARS-CoV 2 pandemic is TMPRSS2. It is a transmembrane serine protease, which enables cell entry of the coronavirus by processing its spike protein. A variety of different inhibitors have been published against both proteases. However, the selectivity over other trypsin-like serine proteases remains a major challenge. In the current study, we replaced the arginine moiety at the P1 site of peptidomimetic inhibitors with different bioisosteres. Enzyme inhibition studies revealed that the phenylguanidine moiety in the P1 site led to strong affinity for TMPRSS2, whereas the cyclohexylguanidine derivate potently inhibited uPA. Both inhibitors exhibited high selectivity over other structurally similar and physiologically important proteases

Withholding-tax non-compliance: the case of cum-ex stock-market transactions

Abstract This paper explores withholding-tax non-compliance in the context of dividend taxation. It focuses on a specific type of stock-market transactions around ex-dividend dates, so-called “cum-ex” trades, which caused considerable revenue losses due to illegitimate tax refunds in Germany and other countries. We use a stylized model of the stock-market equilibrium to analyze the incentives of traders on the German stock market and find that cum-ex trades are only profitable for both buyer and seller in the presence of collusive tax fraud. Our empirical analysis of market data for publicly traded German stocks from 2009 to 2015 confirms that transaction numbers of stocks suitable for cum-ex trades show the expected increase shortly before ex-dividend dates in the period before the tax refunding was reformed. In line with the collusion hypothesis, effects on stock-market prices are not found

A liver immune rheostat regulates CD8 T cell immunity in chronic HBV infection

Chronic hepatitis B virus (HBV) infection affects 300 million patients worldwide1,2, in whom virus-specific CD8 T cells by still ill-defined mechanisms lose their function and cannot eliminate HBV-infected hepatocytes3–7. Here we demonstrate that a liver immune rheostat renders virus-specific CD8 T cells refractory to activation and leads to their loss of effector functions. In preclinical models of persistent infection with hepatotropic viruses such as HBV, dysfunctional virus-specific CXCR6+ CD8 T cells accumulated in the liver and, as a characteristic hallmark, showed enhanced transcriptional activity of cAMP-responsive element modulator (CREM) distinct from T cell exhaustion. In patients with chronic hepatitis B, circulating and intrahepatic HBV-specific CXCR6+ CD8 T cells with enhanced CREM expression and transcriptional activity were detected at a frequency of 12–22% of HBV-specific CD8 T cells. Knocking out the inhibitory CREM/ICER isoform in T cells, however, failed to rescue T cell immunity. This indicates that CREM activity was a consequence, rather than the cause, of loss in T cell function, further supported by the observation of enhanced phosphorylation of protein kinase A (PKA) which is upstream of CREM. Indeed, we found that enhanced cAMP–PKA-signalling from increased T cell adenylyl cyclase activity augmented CREM activity and curbed T cell activation and effector function in persistent hepatic infection. Mechanistically, CD8 T cells recognizing their antigen on hepatocytes established close and extensive contact with liver sinusoidal endothelial cells, thereby enhancing adenylyl cyclase–cAMP–PKA signalling in T cells. In these hepatic CD8 T cells, which recognize their antigen on hepatocytes, phosphorylation of key signalling kinases of the T cell receptor signalling pathway was impaired, which rendered them refractory to activation. Thus, close contact with liver sinusoidal endothelial cells curbs the activation and effector function of HBV-specific CD8 T cells that target hepatocytes expressing viral antigens by means of the adenylyl cyclase–cAMP–PKA axis in an immune rheostat-like fashion.</p

Förderung phonologischer Fähigkeiten. Möglichkeiten und Grenzen eines entwicklungsproximalen Vorgehens

Semantik, Pragmatik, Grammatik, Aussprache – sie stellen die Hauptelemente unserer verbalen Kommunikation und damit eine unserer spezifisch menschlichen Fähigkeiten dar. Sind eine oder mehrere dieser Sprachebenen bei einem Menschen gestört, kann dies sowohl für ihn als auch für seine Kommunikationspartner1 zu Schwierigkeiten führen: Verständigungsprobleme treten auf. Dem einen „fehlen die Worte“, er kann sich und seine Bedürfnisse nicht richtig ausdrücken (wenn es sich um eine semantische Störung handelt), der andere fühlt sich im wahrsten Sinne des Wortes unverstanden, weil er die Worte nicht richtig aussprechen kann. Solche Situationen kennt Michael gut. Er ist ein Kind des Schulkindergartens. In der Arbeit werden Möglichkeiten der Diagnostik und Therapie aufzeigen, die für Kinder wie Michael zur Förderung der phonologischen Fähigkeiten zur Verfügung stehen, im Anschluss daran die Maß dargestellt. Dazu wird einleitend ein kurzer Blick auf den Wandel der Sichtweise auf Aussprachestörungen in Deutschland innerhalb der letzten 40 Jahre geworfen, der Spracherwerb auf Lautebene wird referiert, der dann die Gegenüberstellung mit Problemen beim Erwerb der phonetisch-phonologischen Ebene ermöglicht, die ich im Anschluss beschreiben werde. Das Wissen über den natürlichen Spracherwerb dient als Orientierung für ein entwicklungsproximales Vorgehen in der Förderung, das in Teil Drei der Arbeit näher beschrieben wird. Im zweiten Teil der Arbeit werden Diagnosemöglichkeiten vorgestellt. Der dritte Teil zeigt mögliche Vorgehensweisen zur Förderung von Aussprachefähigkeiten auf. Übungstherapeutisches und entwicklungsproximales Vorgehen werden dabei einander gegenübergestellt. Teil Vier der Arbeit stellt schließlich den Jungen und die Förderung mit ihm auf der Basis der zuvor gewonnenen Erkenntnisse über phonologische Störungen sowie deren Diagnose und Fördermöglichkeiten vor

Switching from Worldwide to Territorial Taxation: Empirical Evidence of FDI Effects

This paper explores empirically whether and how FDI is affected if multinationals’ home countries change taxation of foreign earnings by switching from worldwide to territorial taxation. Our analysis employs data for German inbound FDI based on the ultimate investing country concept. We use a quasi-experimental approach and provide counterfactuals using the synthetic-control method. Our results confirm effects of the switch from worldwide to territorial taxation on FDI but point at the importance of the actual tax rate. For Japan, which charges a higher tax rate on corporate profits than Germany, we find a substantial increase of FDI in Germany after the switch from worldwide to territorial taxation. For the UK, which imposes a lower tax rate than Germany, the switch to territorial taxation is not found to exert any significant effects on investment in Germany