Abstract: According to the Swedish government, the Swedish general anti-avoidance rule that was already in place when the Anti-Tax Avoidance Directive was adopted sufficiently implements the general anti-avoidance rule of the Anti-Tax Avoidance Directive. The implementation strategy chosen raises questions of European Union (EU) law compatibility, as there are clearly differences between them. It also raises questions concerning the extent to which EU law will affect the interpretation of the Swedish general anti-avoidance rule in the future. The purpose of this article is to discuss these questions. PubDate: Wed, 03 May 2023 00:00:00 GMT
Abstract: The paper examines what happened to the profitability of foreign-acquired firms following acquisition in Norway in the period 1994–2005. Propensity score matching combined with a difference-in-difference estimator is used to show that the profitability of the firms acquired goes down significantly following the acquisition. Cost elements, driving the lower profitability of the foreign-acquired firms, are the elements that could reflect transfer price manipulations. Furthermore, the results indicate that despite deteriorating financial performance, there is no significant change in the operating efficiency, liquidity, or solvency of the acquired firms. This may indicate that the observed changes in profitability can be explained by profit shifting activities of the acquired firms. PubDate: Wed, 29 Mar 2023 00:00:00 GMT
Abstract: This article examines whether the Finnish controlled foreign corporation (CFC) regime fulfills its aim to effectively prevent the shifting of profit to foreign low-tax entities and what the effects of the most recent legal amendment were. In addition, the article addresses whether the Finnish CFC regime actualizes the principles of a good tax system. PubDate: Sat, 04 Mar 2023 00:00:00 GMT
Abstract: Finnish limited liability housing companies (LLHCs) are increasing their debt ratios quickly. In this paper, I argue that current tax rules encourage this behaviour owing to strong shareholder tax incentives for a higher debt ratio. Although tax rules are designed to be neutral, Finnish tax rules related to selling assets are profitable for LLHC shareowners in cases where debt rates are high owing to taxable profits being based not on actual acquisition costs but on presumed acquisition costs derived from the selling price. Both tax deductibility of LLHC financial charges and the presumed acquisition cost rule are from a time when interests and inflation were higher than they currently are. Both of these were used to counter the adverse effects of inflation and interest for asset owners and LLHC shareholders. Currently, when inflation and interest rates are close to zero, these rules have created an incentive for a behaviour that increases risks for the whole economy and reduces tax income. PubDate: Sat, 09 Jul 2022 00:00:00 GMT
Abstract: This is an introduction to the research papers that make out this Nordic Tax Journal special issue on inequality within the international tax regime. The special issue is an outcome of the discussions that took place at the (online) conference hosted by Copenhagen Business School in September 2020. In addition to introducing the papers of this special issue, this introduction also provides a contemporary guide to tax justice and tax fairness with an emphasis on theories and principles applicable to the international tax context as this was the overall theme of the conference. PubDate: Thu, 14 Oct 2021 00:00:00 GMT
Abstract: The OECD Programme of Work on the tax challenges arising from the digitalization of the economy comprises a so-called GloBE (Global Base Erosion) or Pillar Two proposal, consisting of a series of measures aimed at establishing a floor to tax competition by achieving minimum taxation of the income obtained by in-scope multinational enterprises. If such a measure is implemented, developing countries would be severely deprived of the possibility to grant tax incentives to attract FDI and potentially foster economic growth. This contribution emphasizes the importance of the thorough review of their tax policy preferences that developing countries should undertake amidst the rapid adoption of GloBE, which the OECD is pushing to achieve. To illustrate this concern, an examination of implementation issues shows that a deficient enactment of the income inclusion rule proposed in GloBE could paradoxically trigger the applicability of tax sparing clauses aimed at protecting the effectiveness of tax incentives, even when both sets of rules pursue opposing goals. PubDate: Thu, 14 Oct 2021 00:00:00 GMT
Abstract: Recently welfare economists and international political economy scholars have increasingly discussed how the corporations seek profits by corroding policies that tackle tax avoidance and undermine public interest. This article contributes to these discussions on so-called regulatory captures in the global wealth chains by providing a comprehensive case study on anti-tax avoidance legislative processes in Finland. The author analyzes the statements that various stakeholders provided during several phases of enacting the interest deduction limitation rule that targets so-called thin capitalization arrangements. Because of this specific research material, the author is able to undertake a nuanced analysis in describing how and whose statements made the difference from the draft version of legislation to the final wording of the law. The evidence suggests corporate interest groups and tax advisory firms influenced the content of the rule as notable tax base eroding loopholes have been included in the Finnish anti-tax avoidance rule. The author also assesses remedies of regulatory captures. PubDate: Tue, 05 Oct 2021 00:00:00 GMT
Abstract: This paper deals with the question whether there are reasons to deem multinational corporate groups ethically or legally responsible for paying their fair share of taxes. Ethical concepts argue that companies should generally be held responsible, but these findings contradict the mainstream market theory that understands companies as legal fictions and therefore not ethically but merely legally responsible. In contrast, we base our argumentation on the political-cultural market theory. We find that this theory provides reasons to ascribe an ethical responsibility for paying their fair share of taxes to multinational corporate groups. We argue, moreover, that this ethical responsibility also speaks for a legal responsibility. The prevailing tax law, particularly the arm's length principle, does generally not see groups as tax subjects. This currently missing legal responsibility gives reasons to rethink tax law. Therefore, we analyze whether the OECD Pillar One proposal may be an alternative to existing law. PubDate: Sat, 18 Sep 2021 00:00:00 GMT
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