Business taxation

Critical analysis of the VAT treatment of vouchers since the annual Tax Act 2018

Carina Menhofer, Hochschule für angewandte Wissenschaften Augsburg (Master thesis)
Junior Management Science 8(1), 2023, 188-218

Vouchers are used in many different ways in numerous sectors and, in addition to the classic target group of end consumers, can now be observed throughout the entire service chain. The issuance of vouchers enables companies to generate liquid funds without providing any service immediately, so they have become very important for the economy. In the past, the VAT treatment of vouchers was characterized by legal uncertainties due to a lack of harmonization. The so-called Voucher Directive was intended to standardize the VAT treatment of vouchers within the EU member states. The aim of this paper is to analyze the implementation of the Voucher Directive into national law with the Annual Tax Act 2018 as well as the corresponding letter of the German Ministry of Finance with regard to its application in practice. In doing so, the scientific literature, case law, legislation and administrative regulations on the VAT treatment of vouchers are consulted. The work gives an overview of the tax treatment and points out problem areas as well as structuring possibilities. In this context, the temporary VAT reduction in connection with the Corona crisis and its effects are also addressed. The results show that an European regulation on the VAT treatment of vouchers is in principle to be viewed positively. However, numerous legal uncertainties remain with regard to the classification of vouchers and its assessment in general.

Keywords: VAT; single purpose voucher; multi purpose voucher; voucher directive.


Carbon Pricing: A Comparison between Germany and the United Kingdom

Karina Temoche González, Technical University of Munich (Master thesis)
Junior Management Science 7(3), 2022, 731-755

Climate change is a global problem that almost every country – 191 parties had signed the Paris Agreement – has committed to undertake. The European Union (EU) has been one of the pioneers in implementing policies that tackle greenhouse gas emissions (GHG). In 2005, the European Emissions Trading Scheme (EU ETS) was launched as the first carbon market. Despite the EU ETS evolving throughout the years, the United Kingdom (UK) implemented an additional policy. In 2013, the UK introduced a Carbon Price Floor (CPF). This paper examines the impact of carbon pricing on GHG emissions during phase III of the EU ETS (2017-2020) in Germany and the UK. Electricity generated by nuclear and renewable sources are considered in the analysis. There are two research questions. First, is the impact of carbon pricing in these two countries, measured by using an Ordinary Least Squares (OLS) model for panel data. The results show that the UK has been more successful in reducing GHG emissions because of the CPF implementation. Second, whether the Market Stability Reserve (MSR) – a policy within the EU ETS – acted as a Carbon Price Floor (CPF) for Germany. Using a model of Differences in Differences (DD), this paper showed that the MSR significantly reduced the CO2 emissions of Germany.

Keywords: Carbon price; EU ETS; CO2 emissions; carbon price floor; market stability reserve; differences in differences.

Usufruct as a Tax Structuring Tool

Ronja Reinwald, Technical University of Applied Sciences Ingolstadt (Bachelor thesis)
Junior Management Science 7(1), 2022, 218-266

Usufruct can be an expedient – albeit complex – instrument for tax planning in German tax law. It enables the separation of ownership and right of use. This paper examines in which cases the right of usufruct is favorable for tax purposes and which alternatives are conceivable. It analyses the academic literature, jurisdiction and administrative provisions with regard to the assessment of usufruct for income and inheritance tax purposes. The usufruct over private real estate is a proven and largely legally secure instrument for structuring anticipated inheritance and shifting income. However, there is some legal uncertainty regarding the usufruct over capital assets, business shares and unincorporated firms. This paper provides a topical overview of the fiscal treatment of usufruct and derives adequate options for tax planning.

Keywords: Nießbrauch; Steuergestaltung; Vorbehaltsnießbrauch; Zuwendungsnießbrauch; Buchwertfortführung.

Cross-border Tax Group

Leonie Rinke, Heinrich Heine University Düsseldorf (Bachelor thesis)
Junior Management Science 6(3), 2021, 568-589

The tax group for income tax purposes enables the income of a subsidiary to be attributed to the income of a parent company for corporate income tax and trade tax purposes. This makes it an important institution in German tax law, but in the cross-border case it harbors many ambiguities and problems. In this paper, therefore, the potential case constellations of a cross-border tax group are identified and examined for the possibility of forming a tax group. At the beginning, a brief description of the prerequisites and legal consequences of the tax group is given. Subsequently, a distinction is made between an inbound and an outbound situation as well as between a foreign domicile in an EU or EEA state and a foreign domicile in a non-member state. In particular, the problem areas in which the domestic application of law conflicts with EU case law are adressed. The results show that the ECJ case law has so far only been implemented by German courts to a limited extent. This leads to a legal situation which is to be classified as contrary to EU law, but which will probably only change through proceedings before the ECJ.

Keywords: Organschaft; § 14 KStG; internationale Gruppenbesteuerung; Niederlassungsfreiheit.

Corporate Taxation in the U.S. and Canada – A Comparative Analysis

Elif Gürlek, Ludwig Maximilian University of Munich (Bachelor thesis)
Junior Management Science 6(3), 2021, 489-506

As the degree of global trade integration increased, corporate taxation became a border-crossing matter that obliged governments to reassess the tax attractiveness of their jurisdictions. The U.S. and Canada are two major players of today’s trade landscape and the corporate tax environment of these two countries impact MNEs investment decisions. Historically, Canada offered a more favourable tax environment compared to its neighbour. However, the U.S. tax reform, TCJA, challenged Canada’s tax attractiveness. This paper aims to assess the similarities and differences of both countries’ tax systems after the tax reform based on the tax attractiveness criteria. Following, the paper examines lessons that can be derived for Canada to regain its strong position in the global tax attractiveness scenery. The U.S. and Canada have the potential to set an example for lawmakers and show that it is possible to create a corporate taxation environment that preserves governments’ interest whilst creating attractive taxation policies in the eye of MNEs.

Keywords: Corporate taxation; United States; Canada; tax attractiveness; Tax Cuts and Jobs Act.

Analysis of Global Tax Standards of the OECD on Digital Business Models

Christina Winder, University of Liechtenstein (Bachelor thesis)
Junior Management Science 6(1), 2021, 190-236

“With the emergence of new digital business models, the effectiveness of international tax law is increasingly disputed. The discussion whether tax law is still capable of taxing digital business models correctly and fairly is also being further ignited by US corporations. The OECD is working intensively on a global proposal to be able to tax digital corporations now in market states as well. The following research question “”Which challenges arise upon the taxation of digital business models and which global tax standards are proposed by the OECD in relation to the taxation of digital business models?”” is answered by this thesis.
This bachelor thesis illustrates that the basic concepts of international tax law are no longer able to effectively tax digital business models. The OECD’s proposed solution revolutionizes international tax law and increasingly turns away from the concept of physical presence. The proposal will lead to a shift of taxation substrate towards market states. The OECD’s Unified Approach is capable of reducing and solving existing problems in the taxation of the digital economy.”

Keywords: Digitale Geschäftsmodelle; internationale Unternehmensbesteuerung; Unified Approach; globale Steuerstandards.

The Impact of Taxation on Managerial Incentives and the Use of Bonus Banks

Daniel Dyck, Bielefeld University (Master thesis)
Junior Management Science 6(1), 2021, 100-148

This study examines how taxes and tax code features influence a firm owner´s use of a managerial incentive scheme known as bonus bank. Bonus banks have a unique property: part of the manager´s earned bonus in one period is withheld and subsequently paid out only in case future period´s firm goals are met. While prior literature on bonus banks either neglected taxes or took managerial incentives as given, I incorporate both aspects into a multi-period agency model with a risk neutral, limited liability agent. The model especially captures corporate income taxes, loss-offset restrictions as well as a manager´s flat, period-dependent income tax rate. The results are twofold: First, compared to fixed remuneration contracts, the use of bonus banks is adversely affected by all investigated taxes and tax code features, except for the loss-offset restrictions. Second, compared to periodical bonus remuneration, bonus banks possess an income smoothing characteristic, weakening the negative effect loss-offset restrictions and income tax progressivity have on a firm owner´s future value. Overall, the results complement the literature on the decision relevance of taxes when designing compensation contracts.

Keywords: Prinzipal-Agenten Theorie, Steuereffekte, Bonusbank, mehrperiodige Vertragsstruktur.

Withholding Tax on Digital Transactions – Status Quo and Potential Alternative Courses of Action

Markus Sebastian Gebhart, Ludwig Maximilian University of Munich (Master thesis)
Junior Management Science 5(4), 2020, 477-511

The providers of digital advertising services are criticised for being omnipresent worldwide, but to pay no significant corporate tax in many countries. In addition to supranational efforts at the OECD and EU level to solve the taxation problems of digital business models, some literature argues that providers of foreign digital advertising services are already subject to limited tax liability in Germany on the basis of existing tax laws. This paper therefore deals with the question of how German taxation rights for digital advertising services which are provided domestically by foreign corporations with the help of the internet can be ensured. To this end, the paper first examines whether German tax laws are capable of taxing cross-border digital advertising services. Subsequently, it will examine whether the draft directives discussed at EU level on the taxation of digital business models would be suitable for ensuring taxation in Germany. The study shows that the existing German tax laws cannot ensure the taxation of digital advertising services in most cases and that the introduction of the EU draft directives in their current form cannot be recommended.

Keywords: Digitale Werbeleistungen; Quellenbesteuerung; Rechteüberlassung; Digitalsteuer; signifikante digitale Präsenz.

Die aktuelle Änderung der umsatzsteuerrechtlichen Behandlung wirtschaftlicher Tätigkeiten von juristischen Personen des öffentlichen Rechts

Felix Frauendorf, University of Siegen (Master thesis)
Junior Management Science 5(1), 2020, 118-147

Der § 2b UStG setzt für die juristischen Personen des öffentlichen Rechts die Mehrwertsteuer-Systemrichtlinie in deutsches Recht um und löste die alte systemwidrige Rechtslage des §2 Abs. 3 UStGab. Die juristischen Personen des öffentlichen Rechts müssen daher bei jeder Leistung prüfen, ob sich der Umfang ihrer Umsatzbesteuerung geändert hat bzw. ändern wird unter dem Gesichtspunkt der Wettbewerbsverzerrung. Die Arbeit untersucht daher, welche Änderung der § 2b UStG auf die umsatzsteuerliche Behandlung von wirtschaftlichen Tätigkeiten von juristischen Personen des öffentlichen Rechts hat und wie sich diese auswirken. Die Arbeit stellt die Grundzüge der Umsatzbesteuerung, die Umsatzbesteuerung nach alter und nach neuer Rechtslage da. Abschließend wird der Umstellungsprozess zur neuen Rechtslage dargestellt. Als Ergebnis kann festgestellt werden, dass die unternehmerische Betätigung von juristischen Personen des öffentlichen Rechts sich vergrößern wird, da jede einzelne Leistung untersucht werden muss. Hierdurch kann es sowohl zu Fehleinschätzung bei der Leistungszuordnung kommen,was zu einer falschen Umsatzsteuerdeklaration führt. Auf der anderen Seite kann das Volumen des Vorsteuerabzuges sich erhöhen. Es bleibt abzuwarten, ob der § 2b UStG europarechtskonform ist.

Keywords: Umsatzbesteuerung; juristische Person des öffentlichen Rechts; § 2b UstG; Mehrwertsteuer-Systemrichtlinie; Umstellungskonzept.

Grunderwerbsteuerliche Konsequenzen der Umstrukturierung von Konzernen

Daniel Martin Teichmann, Heinrich Heine University Düsseldorf (Bachelor thesis)
Junior Management Science 4(4), 2019, 635-655

Die erfolgreiche Realisierung einer konzerninternen Umstrukturierung wird durch die GrESt gefährdet, sobald eine Grundstücksübertragung oder ein share deal beabsichtigt wird. Der steuerlichen Belastung steht kein Mittelzufluss gegenüber, weshalb das Vorhaben an der Leistungsfähigkeit scheitern kann. In Anbetracht dessen untersucht diese Arbeit, ob eine grunderwerbsteuerliche Optimierung möglich ist. Im Fokus stehen inländische Kapitalgesellschaftskonzerne und Restrukturierungen, die den Eigentumsübergang an Grundstücken sowie Anteilen von grundbesitzenden Gesellschaften vorsehen. Zu Beginn erfolgt eine Systematisierung relevanter Erwerbs-/Umwandlungsvorgänge, an die sich eine Analyse ihrer grunderwerbsteuerlichen Konsequenzen anschließt. Die Erkenntnisse münden in einen detaillierten Maßnahmenvergleich. Als Ergebnis steht der Appell eine Auslösung von GrESt zu vermeiden. Verhindern die Restrukturierungsziele eine Umgehung, besteht Optimierungsbedarf. Hierfür eignet sich ein share deal, da ein kluges Beteiligungsmanagement bereits die Steuerbegründung ausschließt (§ 1 III GrEStG). Weniger Gestaltungspotenzial eröffnet die Bemessungsgrundlage, da sie häufig dem starren Grundbesitzwert entspricht (§ 8 II GrEStG). Attraktiver erscheint § 6a GrEStG, der konzerninterne Umstrukturierungen steuerfrei stellt. Eine effektive Ausschöpfung erfordert jedoch die planungsintensive Beachtung des diffizilen Tatbestandes (95% Beteiligung, Vor-/Nachbehaltensfrist) und komplexer Ländererlasse.

Keywords: Grunderwerbsteuer; Kapitalgesellschaft; Konzern; share deal; Umstrukturierung.

Personal Taxes and Corporate Investment

Frédéric Herold, WHU – Otto Beisheim School of Management (Bachelor thesis)
Junior Management Science 4(1), 2019, 81-100

In this thesis, I present empirical evidence on the effect of personal taxes on firm-level investment. Exploiting a cross-country panel that consists of 40,608 firms from a total of 115 countries in the period 1999-2013, I employ a linear regression model in which I regress five different definitions of the personal tax wedge against capital investment of firms. I find that the average investment response of firms strongly depends on the definition of the personal tax wedge. My baseline regression
reveals that, if the pure personal tax rate increases, firms on average show a positive capital investment response. That is, if firms cannot shift the economic burden of personal taxes to other stakeholders, an increase in personal taxes, ceteris paribus, increases the factor price of labour and thus exerts higher pressure on corporate profits. Profit-maximising firms therefore counteract this pressure by (partially) substituting the more expensive input factor labour by capital, increasing their capital investment. This effect, however, does not hold true for alternative definitions of the personal tax wedge that additionally include social security contributions. Likewise, I obtain mixed results when testing for cross-sectional variation in capital investment responses arising from differences in relative market power, the ability to substitute input factors, and financial constraints. In this context, my thesis provides empirical evidence on the effect of personal taxes on investment behaviour at the firm level and thus adds to current literature, which mainly considers the effect of personal taxes on aggregate investment, economic growth, and total factor productivity.

Keywords: investment; personal tax; tax wedge.

The Tax System and Corporate Payout Policies

Nicholas Herold, WHU – Otto Beisheim School of Management (Bachelor thesis)
Junior Management Science 4(1), 2019, 63-80

In this thesis, I examine how corporate taxes, dividend taxes, personal income taxes, and consumption taxes affect corporate
payout behaviour. Using rich international panel data that consist of 40,609 firms across 115 countries from 1999 to 2013,
I run linear regressions of each of the four tax rates on three payout variables which measure frequency and magnitude of
regular cash dividends distributed by firms. In my baseline model, I find that the predictions of the new view – one of the
two views in neoclassical theory – on short-run payout responses only partially hold true. Inconsistent with initial hypotheses, corporate taxes on average do not impact a firm’s dividend payout behaviour in the short run. Regarding dividend taxes, my results show that the hypothesised dividend tax neutrality only holds true for the relative amount of dividends but not for a firm’s likelihood to distribute, increase, and initiate dividends. Consistent with initial hypotheses, personal income taxes and consumption taxes trigger mostly large payout responses in terms of frequency and magnitude of dividend payouts. In my two model extensions, in which I focus on payout behaviour of cash-rich firms and employ a more flexible definition of the time horizon characterising short-run payout, my findings are again only partially in line with predictions of the new view on short-run payout responses. With these results, this thesis not only analyses well-investigated tax rates – corporate taxes and dividend taxes – for which current literature shows mixed empirical evidence but also examines hitherto scarcely considered tax rates – personal income taxes and consumption taxes – in the neoclassical framework and determines their impact on corporate payout.

Keywords: corporate payout; corporate tax; dividend tax; personal income tax; consumption tax.

Besteuerung unternehmensverbundener Stiftungen

Iris Krampe, Westphalian University of Applied Sciences Gelsenkirchen (Bachelor thesis)
Junior Management Science 3(3), 2018, 55-73

4,3 Mrd. Euro jährliche Stiftungsausgaben für Satzungszwecke. Das entspricht der Höhe des Risikokapitals, das 2017 in Start-Ups in Deutschland investiert wurde.“, tituliert der Bundesverband deutscher Stiftungen. Das zeigt die eindrucksvolle Dimension der Stiftungslandschaft in Deutschland. Die Motivation zur Gründung einer Stiftung kann vielfältige Facetten haben. Meist ist nicht eine einzelne Zielsetzung ausschlaggebend eine Stiftung ins Leben zu rufen. Unternehmensverbundene Stiftungen zeichnen sich dadurch aus, dass ein (enger) Bezug zu einem Unternehmen besteht. So haben einige Unternehmer durch eine Stiftung die Möglichkeit geschaffen, ihr Lebenswerk auf Dauer zu erhalten. Zu den wohl bekanntesten unternehmensverbundenen Stiftungen zählen beispielsweise die Alfried Krupp von Bohlen und Halbach-Stiftung, die Fritz Thyssen Stiftung oder die Robert Bosch Stiftung. Bei Gründung einer rechtsfähigen Stiftung ergeben sich für den Stifter Gestaltungsspielräume beim Stiftungszweck, Stiftungsvermögen und bei der Stiftungsorganisation. Das Hauptaugenmerk dieser Arbeit liegt in der Analyse der Besteuerung der Stiftungen. Es wird dargelegt, inwiefern die Stiftung bei Errichtung, während des Bestehens und bei Auflösung besteuert wird. Zudem liegt der Fokus dieser Arbeit auf den möglichen Steuerbegünstigungen und den notwendigen Voraussetzungen hierfür, da 95 % aller Stiftungen gemeinnützige Zwecke verfolgen. Zuletzt kommt als besondere Gestaltungsform für Unternehmer die Kombination einer privatnützigen Familienstiftung mit einer gemeinnützigen Stiftung zur sogenannten Doppelstiftung in Betracht.

Keywords: Unternehmensstiftung, Unternehmensnachfolge, Gemeinnützigkeit,

Effects of fiscal R&D incentives on R&D expenditure

Anna Theresa Bührle, University of Mannheim (Master thesis)
Junior Management Science 3(2), 2018, 57-79

Special tax incentives aiming to foster research and development (R&D) investment are widely spread among the members of the Organisation for Economic Co-operation and Development (OCED). I investigate the effect such tax incentives have on business R&D investment. Fiscal R&D incentives can be categorized as input-oriented tax incentives such as tax credits, super deductions and accelerated depreciation, and as output-oriented incentives such as patent box regimes. In the first part of my thesis I provide an overview over the methodology of the B-Index, a measure for the generosity of input-oriented tax incentives. Calculations of the B-Index for 33 OECD-countries and China from 1991 to 2014 show an overall trend towards an increase in the generosity of input-oriented fiscal R&D incentives. In the second part of my thesis, I create a panel with country-level data on business R&D investment provided by the OECD. I test reactions to changes in R&D tax incentives and find a positive effect of input-oriented R&D tax incentives, but no significant impact of output-oriented R&D tax incentives. A more detailed analysis on the industry-level shows that the results are driven by effects on business R&D investment in the manufacturing and services sector.

Keywords: R&D, tax incentives, B-Index, taxation, OECD

Measuring Corporate Tax Avoidance – An Analysis of Different Measures

Markus Sebastian Gebhart, Ludwig Maximilian University of Munich (Bachelor thesis)
Junior Management Science 2(2), 2017, 43-60

This study (1) gives an overview of and analyzes the different existing measures of tax avoidance in the empirical tax research literature and (2) aims at answering the question of how closely related they are in measuring corporate tax avoidance. Starting with a theoretical comparison of different Effective Tax Rate based measures, Book-Tax-Differences based measures, the measure developed by \citet{henry2014data}, Tax Shelter Scores, and Unrecognized Tax Benefits an empirical comparison of the first three mentioned measures is conducted. The purely descriptive analysis reveals that although there are differences between the single measures and those differences persist over time, especially annual proxies exhibit considerable correlation, which increases with similarity in computation and inputs used. A comparison of annual with long-run measures implies that the reliability of annual measures in depicting long-run tax avoidance is not sufficiently high.

Keywords: tax avoidance, tax sheltering, Effective Tax Rate, Book-Tax-Difference