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Business and Economics > Corporate Taxation

You are looking at 1 - 4 of 4 items for :

  • Type: Journal Issue x
  • Financial Institutions and Services: Government Policy and Regulation x
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Cover IMF Staff Country Reports
Luxembourg: Selected Issues
International Monetary Fund. European Dept.
This Selected Issues paper considers features of the Luxembourg tax system that may be susceptible to changes in international tax transparency standards and surveys related policy options. Luxembourg’s predictable and generally low-rate tax system has helped establish it as a leading financial and commercial entrepôt and has supported its fiscal revenues. Its revenue base could, however, be susceptible to changes in the European Union and global tax environment. This paper highlights that to address potential challenges to Luxembourg’s revenue base, the tax policy review should explore selective rate increases and base broadening measures. Moreover, the tax practices should seek to avoid encouraging unnecessary complexity in corporate ownership structures and intragroup financial contracts.
Keywords:
ISCR; CR; firm; Luxemburg; bank; holding company; rate; Luxembourg tax policy; Group structure; nonbank company; bank supervisor; EU tax legislation; city state economy; bank shareholder suitability; franchise name; EU energy tax reform; Corporate income tax; Excises; Bank supervision; Value-added tax; Financial sector; Europe
Cover IMF Working Papers
Taxation and Leverage in International Banking
Ms. Grace Weishi Gu
,
Ruud A. de Mooij
, and
Mr. Tigran Poghosyan
This paper explores how corporate taxes affect the financial structure of multinational banks. Guided by a simple theory of optimal capital structure it tests (i) whether corporate taxes induce subsidiary banks to raise their debt-asset ratio in light of the traditional debt bias; and (ii) whether international corporate tax differentials vis-a-vis foreign subsidiary banks affect the intra-bank capital structure through international debt shifting. Using a novel subsidiary-level dataset for 558 commercial bank subsidiaries of the 86 largest multinational banks in the world, we find that taxes matter significantly, through both the traditional debt bias channel and the international debt shifting that is due to the international tax differentials. The latter channel is more robust and tends to be quantitatively more important. Our results imply that taxation causes significant international debt spillovers through multinational banks, which has potentially important implications for tax policy.
Keywords:
WP; short-term debt; tax credit; debt ratio; banking sector; parent bank; Bank taxation; corporate tax; debt bias; leverage; subsidiary bank; tax difference; capital requirement; bank leverage; Corporate income tax; Deposit insurance; Tax allowances; Global
Cover IMF Working Papers
Debt, Taxes, and Banks
Mr. Michael Keen
and
Ruud A. de Mooij
Understanding the impact of the asymmetric tax treatment of debt and equity on the capital structures of financial institutions is critical to shaping and assessing responses to the problem of excessive leverage that underlay the 2009 financial crisis - but there is no empirical evidence to draw on. Guided by a simple model of banks? financing decisions in the presence of both regulatory constraints and tax asymmetries, this paper explores the impact of corporate tax bias on bank leverage, the use of hybrid instruments and regulatory capital ratios for a panel of over 14,000 commercial banks in 82 countries over nine years. On average, the sensitivity of banks? debt choices proves very similar to that of non-financial firms, consistent with rough offsetting of two opposing effects suggested by the theory. As the model predicts, somewhat counter-intuitively, the impact of tax on hybrids is generally weak or insignificant. Responsiveness to taxation varies significantly across banks, however: those holding smaller equity buffers, and larger banks, are noticeably less sensitive to tax.
Keywords:
WP; capital structure; tax rate; Bank taxation; corporate tax; debt bias; leverage; capital requirement; leverage-asset ratio; bank assets; capital structure choice; bank capital structure; Corporate income tax; Capital adequacy requirements; Stocks; Deposit insurance; Tax arrears management; Europe
Cover IMF Staff Country Reports
Germany: 2011 Article IV Consultation: Staff Report; Public Information Notice on the Executive Board Discussion; and Statement by the Executive Director for Germany
International Monetary Fund
Germany’s economic growth and recovery from the global crisis are explained in this study. Tax, education, and innovation policies are specific measures supported by the authorities. External and financial shocks received by Germany and other outward spillovers are outlined. Germany has a high current account and international assets. From a long-term perspective, rebalancing of public finances to promote growth is desirable. Stress tests are conducted to confirm the capital buffers. Finally, the banking system of Germany reflects significant policy measures and economic recovery.
Keywords:
ISCR; CR; financing; authority; Three-Pillar banking system; demand; Rebounding export market share; government finance; deposit guarantee schemes regime; current account; financial system; consumption-savings proportion; budget consolidation in Germany; Commercial banks; Cooperative banks; Global; Europe