Transfer Pricing or Formula Apportionment? Tax-Induced Distortions of Multinationals’ Investment and Production Decisions

For mitigating the problems of transfer pricing formula apportionment (FA) is discussed intensively. However, FA could even be more harmful than transfer pricing because income shifting would require changing economic decisions instead of just taking advantage of accounting options. We analyze the impact of different international tax allocation regimes on a corporate group’s investment and production decisions. We show that FA offsets the advantages of decision decentralization as it reverses the separation of responsibilities. It is not clear whether FA is desirable from a fiscal or an entrepreneurial perspective. The effects of FA compared to transfer pricing depend strongly on the parameter setting under consideration, especially the decision procedure within corporate groups.capital budgeting, formula apportionment, international taxation, investment incentives, multinational groups, transfer pricing

Transfer pricing or formula apportionment? Tax-induced distortions of multinationals' investment and production decisions

Multinational groups (MNGs) produce a major part of global output. Further, a substantial fraction of international transactions happens to be internal, i.e., intermediate products and services are traded between group members. Thus, the problem of co-ordinating economic decisions like investment or production within such large entities has been widely recog-nized in the theoretical and empirical literature. The findings suggest that transfer prices are a widespread device for splitting up complex decision situations and allocating the responsibility for the resulting subproblems to several decision makers. Apart from its co-ordination function transfer pricing is also used for tax purposes. Legally independent group members realize intra-group sales and contribute to a single product. Taxable group profits are often allocated among the participating companies by means of transfer prices. In this case, from the group's perspective, transfer pricing is a device of international tax planning. Of course, national tax authorities have been aware of potential misuse. In Europe, the problem has become especially severe since the mid-European countries joined the EU. Due to the emerging large tax rate differentials, tax revenues of high-tax legislations eroded. For mitigating this problem formula apportionment (FA) is discussed intensively. Under FA, a common tax base is calculated and divided among the host countries in accordance with given apportionment factors. As a consequence, earnings management fails to re-allocate profits to low-tax legislations and tax base erosion seems to be stopped. However, FA could even be more harmful than transfer pricing because under FA income shifting would require changing economic decisions instead of just taking advantage of accounting options. In addition to the erosion of tax revenues, capital investments and employment could decrease in high-tax legislations. The goal of our paper is to analyze the impact of different international tax allocation regimes on the MNG's investment and production decisions. In our theoretical model, we derive optimal decisions under transfer pricing and FA. A prominent result of our analysis is that FA offsets the advantages of decision decentralization as it reverses the separation of responsibility areas. It is not clear whether FA is desirable from a fiscal or an entrepreneurial perspective. We show that the effects of FA compared to transfer pricing depend strongly on the parameter setting under consideration. One of the most important determinants is the internal decision procedure within the MNG. --Capital budgeting,Formula apportionment,International Taxation,Investment Incentives,Multinational Groups,Transfer Pricing

Magneto-thermal transport indicating enhanced Nernst response in FeCo/IrMn exchange coupled stacks

We present an analysis of magneto-thermal transport data in IrMn/FeCo bilayers based on the Mott relation and report an enhancement of the Nernst response in the vicinity of the blocking temperature. We measure all four transport coefficients of the longitudinal resistivity, anomalous Hall resistivity, Seebeck effect, and anomalous Nernst effect, and we show a deviation arising around the blocking temperature between the measured Nernst coefficient and the one calculated using the Mott rule. We attribute this discrepancy to spin fluctuations at the antiferromagnet/ferromagnet interface near the blocking temperature. The latter is estimated by magnetometry and magneto-transport measurements

Betriebliches Datenmanagement und FMIS: Machbarkeitsstudie für „Betriebliches Datenmanagement und Farm-Management-Information-System (FMIS)“ in sächsischen Landwirtschaftsbetrieben

Die Studie gibt Auskunft über den Umgang mit Medienbrüchen und die Darstellung von Kennzahlen zur Unternehmenssteuerung in der Landwirtschaft. Datenvernetzung und Visualisierung sind die Voraussetzung zur Etablierung von „smart farming“ in der Praxis. In der Landwirtschaft kann ein hybrides Datenmanagement zu der Vernetzung betrieblicher Software beitragen. Dies besteht aus Datenhubs, Datenroutern und bilateralen Schnittstellen. Die Ergebnisse sind richtungsweisend für landwirtschaftliche Unternehmen, Softwareanbieter, Behörden und alle weiteren Teilnehmer im digitalen Ökosystem der Agrardomäne. Redaktionsschluss: 10.10.202

Cultivation-independent screening revealed hot spots of IncP-1, IncP-7 and IncP-9 plasmid occurrence in different environmental habitats

IncP-1, IncP-7 and IncP-9 plasmids often carry genes encoding enzymes involved in the degradation of man-made and natural contaminants, thus contributing to bacterial survival in polluted environments. However, the lack of suitable molecular tools often limits the detection of these plasmids in the environment. In this study, PCR followed by Southern blot hybridization detected the presence of plasmid-specific sequences in total community (TC-) DNA or fosmid DNA from samples originating from different environments and geographic regions. A novel primer system targeting IncP-9 plasmids was developed and applied along with established primers for IncP-1 and IncP-7. Screening TC-DNA from biopurification systems (BPS) which are used on farms for the purification of pesticide-contaminated water revealed high abundances of IncP-1 plasmids belonging to different subgroups as well as IncP-7 and IncP-9. The novel IncP-9 primer-system targeting the rep gene of nine IncP-9 subgroups allowed the detection of a high diversity of IncP-9 plasmid specific sequences in environments with different sources of pollution. Thus polluted sites are "hot spots" of plasmids potentially carrying catabolic genes.Facultad de Ciencias ExactasInstituto de Biotecnologia y Biologia Molecula

Cultivation-independent screening revealed hot spots of IncP-1, IncP-7 and IncP-9 plasmid occurrence in different environmental habitats

IncP-1, IncP-7 and IncP-9 plasmids often carry genes encoding enzymes involved in the degradation of man-made and natural contaminants, thus contributing to bacterial survival in polluted environments. However, the lack of suitable molecular tools often limits the detection of these plasmids in the environment. In this study, PCR followed by Southern blot hybridization detected the presence of plasmid-specific sequences in total community (TC-) DNA or fosmid DNA from samples originating from different environments and geographic regions. A novel primer system targeting IncP-9 plasmids was developed and applied along with established primers for IncP-1 and IncP-7. Screening TC-DNA from biopurification systems (BPS) which are used on farms for the purification of pesticide-contaminated water revealed high abundances of IncP-1 plasmids belonging to different subgroups as well as IncP-7 and IncP-9. The novel IncP-9 primer-system targeting the rep gene of nine IncP-9 subgroups allowed the detection of a high diversity of IncP-9 plasmid specific sequences in environments with different sources of pollution. Thus polluted sites are "hot spots" of plasmids potentially carrying catabolic genes.Facultad de Ciencias ExactasInstituto de Biotecnologia y Biologia Molecula

Spontaneous liver disease in wild-type C57BL/6JOlaHsd mice fed semisynthetic diet

Mouse models are frequently used to study mechanisms of human diseases. Recently, we observed a spontaneous bimodal variation in liver weight in C57BL/6JOlaHsd mice fed a semisynthetic diet. We now characterized the spontaneous variation in liver weight and its relationship with parameters of hepatic lipid and bile acid (BA) metabolism. In male C57BL/6JOlaHsd mice fed AIN-93G from birth to postnatal day (PN)70, we measured plasma BA, lipids, Very low-density lipoprotein (VLDL)-triglyceride (TG) secretion, and hepatic mRNA expression patterns. Mice were sacrificed at PN21, PN42, PN63 and PN70. Liver weight distribution was bimodal at PN70. Mice could be subdivided into two nonoverlapping groups based on liver weight: 0.6 SD 0.1 g (approximately one-third of mice, small liver; SL), and 1.0 SD 0.1 g (normal liver; NL; p<0.05). Liver histology showed a higher steatosis grade, inflammation score, more mitotic figures and more fibrosis in the SL versus the NL group. Plasma BA concentration was 14-fold higher in SL (p<0.001). VLDL-TG secretion rate was lower in SL mice, both absolutely (-66%, p<0.001) and upon correction for liver weight (-44%, p<0.001). Mice that would later have the SL-phenotype showed lower food efficiency ratios during PN21-28, suggesting the cause of the SL phenotype is present at weaning (PN21). Our data show that approximately one-third of C57BL/6JOlaHsd mice fed semisynthetic diet develop spontaneous liver disease with aberrant histology and parameters of hepatic lipid, bile acid and lipoprotein metabolism. Study designs involving this mouse strain on semisynthetic diets need to take the SL phenotype into account. Plasma lipids may serve as markers for the identification of the SL phenotype

A novel unconventional T cell population enriched in Crohn's disease

Objective One of the current hypotheses to explain the proinflammatory immune response in IBD is a dysregulated T cell reaction to yet unknown intestinal antigens. As such, it may be possible to identify disease-associated T cell clonotypes by analysing the peripheral and intestinal T-cell receptor (TCR) repertoire of patients with IBD and controls. Design We performed bulk TCR repertoire profiling of both the TCR alpha and beta chains using high-throughput sequencing in peripheral blood samples of a total of 244 patients with IBD and healthy controls as well as from matched blood and intestinal tissue of 59 patients with IBD and disease controls. We further characterised specific T cell clonotypes via single-cell RNAseq. Results We identified a group of clonotypes, characterised by semi-invariant TCR alpha chains, to be significantly enriched in the blood of patients with Crohn's disease (CD) and particularly expanded in the CD8+ T cell population. Single-cell RNAseq data showed an innate-like phenotype of these cells, with a comparable gene expression to unconventional T cells such as mucosal associated invariant T and natural killer T (NKT) cells, but with distinct TCRs. Conclusions We identified and characterised a subpopulation of unconventional Crohn-associated invariant T (CAIT) cells. Multiple evidence suggests these cells to be part of the NKT type II population. The potential implications of this population for CD or a subset thereof remain to be elucidated, and the immunophenotype and antigen reactivity of CAIT cells need further investigations in future studies