Book-tax conformity: empirical evidence from Germany

We use a unique matched tax return - financial statement data set to examine the magnitude and sources of book-tax differences in Germany. For the first time, the data set enables us to evaluate the extent to which financial and tax accounting differ in Germany in the most accurate manner. Despite the close link between financial and tax accounting in Germany, we find that corporate taxable income and income reported to shareholders diverge considerably. Regression results suggest that this reporting gap is largely attributable to legal differences between financial and tax accounting and we cannot provide evidence that tax aggressive reporting adds to it. However, further analyses show that firms actively engaged in corporate restructuring exhibit larger book-tax differences than other firms. We interpret this result as evidence of firms willing to give up the administrative advantages of a one-book accounting system in order to achieve desired tax or financial accounting result, if book-tax conformity is not required. Thus, the results not only provide insights into the relatively unexplored area of behavioral response to changes in the degree of book-tax conformity, but also add a new perspective to the discussion surrounding the implementation of the German Accounting Law Modernization Act (BilMoG) in 2010

The Computation and Comparison of the Effective Tax Burden in Four Asian Countries

The Asia-Pacific region has gained economic power among the world's economies and offers enormous sales opportunities for multinational companies. When considering foreign direct investment in countries from this region, the specific taxation framework constitutes one determinant to be accounted for. The paper provides a comparative analysis of the corporate tax regimes in four important Asian countries, namely China, India, Japan and Singapore. It is not limited to a comprehensive description of the tax systems, but goes to a detailed analysis of the effective average tax burden, which is relevant for investors' decisions on location, scale and mode of finance of a potential investment. The calculation is based on the European Tax Analyzer. This approach allows capturing different types of taxes borne by corporations, the respective tax bases and tax rates in great detail and hence extends the literature on company taxation in Asia. In addition, we seek to contribute to literate not only by establishing a country ranking based on the overall tax burden, but also by identifying the underlying tax drivers. In doing so, sensitivity analyses are run to examine the effects of altering model assumptions, thereby illustrating the sensitivity of the base case results to selected financial ratios. As corporate income taxes might affect investments in various industry sectors differently, the comparison of the effective average tax burdens is finally extended to corporations representing different industries.Effective Average Tax Burden, European Tax Analyzer, Asia

Romania's development to a low-tax country: Effective corporate tax burden in Romania from 1992 to 2010 and Romania's current ranking among the eastern European member states

We trace back Romania's development to a low-tax country among the Member States of the European Union by analysing the major tax law changes in corporate taxation since 1992. We find that the significant reduction of the corporate income tax rate from 45% in 1992 to 16% since 2005 has not been accompanied by a comprehensive broadening of the corporate income tax base as prevalent in many longstanding Member States of the EU and the OECD. Our analysis is not limited to a comprehensive description of the development of corporate taxation in Romania, but goes on with a numerical analysis of the tax burdens at different periods of time which constitute milestones in the development of corporate taxation in Romania. For this purpose, we apply the European Tax Analyzer, which is a computer-based model firm approach. We find that the average company tax burden of the underlying model company has dropped significantly by almost 65% since 1992. Furthermore, our numerical analysis does not confirm the tax base broadening policy. As a result, Romania holds position two among the group of Central and Eastern European EU Member States. --corporate taxation,effective tax burden,transition economy,EU accession countries,tax reform,tax-rate-cum-base-broadening reform

Romania's development to a low-tax country - Effective Corporate Tax Burden in Romania from 1992 to 2010 and Romania's current ranking among the Eastern European Member States

We trace back Romania’s development to a low-tax country among the Member States of the European Union by analysing the major tax law changes in corporate taxation since 1992. We find that the significant reduction of the corporate income tax rate from 45% in 1992 to 16% since 2005 has not been accompanied by a comprehensive broadening of the corporate income tax base as prevalent in many longstanding Member States of the EU and the OECD. Our analysis is not limited to a comprehensive description of the development of corporate taxation in Romania, but goes on with a numerical analysis of the tax burdens at different periods of time which constitute milestones in the development of corporate taxation in Romania. For this purpose, we apply the European Tax Analyzer, which is a computer-based model firm approach. We find that the average company tax burden of the underlying model company has dropped significantly by almost 65% since 1992. Furthermore, our numerical analysis does not confirm the tax base broadening policy. As a result, Romania holds position two among the group of Central and Eastern European EU Member States

Evidence on book-tax differences and disclosure quality based on the notes to the financial statements

The German Accounting Law Modernization Act (BilMoG) represents a change in paradigm with regard to the traditionally close relationship between financial and tax accounting in Germany. At the same time, requirements on the disclosure of deferred taxes were revised considerably. We make use of these new disclosure provisions to disaggregate firms’ deferred tax position and to analyze the components of temporary book-tax differences that add to the reporting gap in Germany. To this end, we apply a unique dataset of hand-collected information from individual financial statements for the fiscal year 2010. We find considerable differences between financial and tax accounting and observe that temporary book-tax differences are mainly associated with mandatory differences in accounting for provisions. The scope and quality of tax-related disclosures vary substantially and the overall disclosure quality is low. In order to identify the determinants of the heterogeneity of disclosure quality, we construct an index for voluntary and mandatory disclosure of deferred tax information and conduct multivariate analyses to explain firms’ disclosure decisions. We show that the recognition of deferred tax assets and liabilities on the face of the balance-sheet is significantly and positively related with disclosure quality in the notes to the financial statements. Further, our results suggest that larger firms are more likely to have high-quality tax disclosures and that high implementation costs could also explain the observed shortfalls in disclosure quality. Moreover, we find that different reporting incentives might apply if reporting on losses is assessed in isolation. We use these insights to derive implications for the discussion about whether and how to reform disclosure re-quirements under German GAAP

Potential of FX06 to prevent disease progression in hospitalized non-intubated COVID-19 patients — the randomized, EU-wide, placebo-controlled, phase II study design of IXION

Background: More than 2.7 million hospitalizations of COVID-19-infected patients have occurred in Europe alone since the outbreak of the coronavirus in 2020. Interventions against SARS-CoV-2 are still in high need to prevent admissions to ICUs worldwide. FX06, a naturally occurring peptide in humans and other mammals, has the potential to reduce capillary leak by improving endothelial dysfunction and thus preventing the deterioration of patients. With IXION, we want to investigate the potential of FX06 to prevent disease progression in hospitalized, non-intubated COVID-19 patients. Methods: IXION is an EU-wide, multicentre, placebo-controlled, double-blinded, parallel, randomized (2:1) phase II clinical study. Patient recruitment will start in September 2022 (to Q2/2023) in Germany, Italy, Lithuania, Spain, Romania, Portugal, and France. A total of 306 hospitalized patients (>= 18 years and < 75 years) with a positive SARS-CoV-2 PCR test and a COVID-19 severity of 4-6 according to the WHO scale will be enrolled. After randomization to FX06 or placebo, patients will be assessed until day 28 (and followed up until day 60). FX06 (2 x 200 mg per day) or placebo will be administered intravenously for 5 consecutive days. The primary endpoint is to demonstrate a difference in the proportion of patients with progressed/worsened disease state in patients receiving FX06 compared to patients receiving placebo. Secondary endpoints are lung function, oxygen saturation and breathing rate, systemic inflammation, survival, capillary refill time, duration of hospital stay, and drug accountability. Discussion: With IXION, the multidisciplinary consortium aims to deliver a new therapy in addition to standard care against SARS-CoV-2 for the clinical management of COVID-19 during mild and moderate stages. Potential limitations might refer to a lack of recruiting and drop-out due to various possible protocol violations. While we controlled for drop-outs in the same size estimation, recruitment problems may be subject to external problems difficult to control for

HE-LHC: The High-Energy Large Hadron Collider: Future Circular Collider Conceptual Design Report Volume 4

In response to the 2013 Update of the European Strategy for Particle Physics (EPPSU), the Future Circular Collider (FCC) study was launched as a world-wide international collaboration hosted by CERN. The FCC study covered an energy-frontier hadron collider (FCC-hh), a highest-luminosity high-energy lepton collider (FCC-ee), the corresponding 100 km tunnel infrastructure, as well as the physics opportunities of these two colliders, and a high-energy LHC, based on FCC-hh technology. This document constitutes the third volume of the FCC Conceptual Design Report, devoted to the hadron collider FCC-hh. It summarizes the FCC-hh physics discovery opportunities, presents the FCC-hh accelerator design, performance reach, and staged operation plan, discusses the underlying technologies, the civil engineering and technical infrastructure, and also sketches a possible implementation. Combining ingredients from the Large Hadron Collider (LHC), the high-luminosity LHC upgrade and adding novel technologies and approaches, the FCC-hh design aims at significantly extending the energy frontier to 100 TeV. Its unprecedented centre-of-mass collision energy will make the FCC-hh a unique instrument to explore physics beyond the Standard Model, offering great direct sensitivity to new physics and discoveries

FCC-ee: The Lepton Collider: Future Circular Collider Conceptual Design Report Volume 2

In response to the 2013 Update of the European Strategy for Particle Physics, the Future Circular Collider (FCC) study was launched, as an international collaboration hosted by CERN. This study covers a highest-luminosity high-energy lepton collider (FCC-ee) and an energy-frontier hadron collider (FCC-hh), which could, successively, be installed in the same 100 km tunnel. The scientific capabilities of the integrated FCC programme would serve the worldwide community throughout the 21st century. The FCC study also investigates an LHC energy upgrade, using FCC-hh technology. This document constitutes the second volume of the FCC Conceptual Design Report, devoted to the electron-positron collider FCC-ee. After summarizing the physics discovery opportunities, it presents the accelerator design, performance reach, a staged operation scenario, the underlying technologies, civil engineering, technical infrastructure, and an implementation plan. FCC-ee can be built with today’s technology. Most of the FCC-ee infrastructure could be reused for FCC-hh. Combining concepts from past and present lepton colliders and adding a few novel elements, the FCC-ee design promises outstandingly high luminosity. This will make the FCC-ee a unique precision instrument to study the heaviest known particles (Z, W and H bosons and the top quark), offering great direct and indirect sensitivity to new physics

FCC Physics Opportunities: Future Circular Collider Conceptual Design Report Volume 1

We review the physics opportunities of the Future Circular Collider, covering its e+e-, pp, ep and heavy ion programmes. We describe the measurement capabilities of each FCC component, addressing the study of electroweak, Higgs and strong interactions, the top quark and flavour, as well as phenomena beyond the Standard Model. We highlight the synergy and complementarity of the different colliders, which will contribute to a uniquely coherent and ambitious research programme, providing an unmatchable combination of precision and sensitivity to new physics