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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. The Effects of Size-Based Regulation on Small Firms: Evidence from VAT Threshold Terms of use: Documents in EconStor may AbstractThere is only limited evidence of how small firms respond to size-based regulations applied in various countries. We study this question by examining the value-added tax (VAT) threshold in Finland. We find sizable bunching of firms in the sales distribution just below the exemption threshold, implying that firms actively avoid VAT liability. We utilize variation in both the VAT rate and reporting requirements to provide compelling evidence that the response is caused by the compliance costs of VAT reporting rather than the level of the tax rate. In addition, we find that compliance costs hinder the growth of small firms.JEL-Codes: D220, H250, H320, L110.

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If travellers' duty-free import allowance within the internal market is increased in the near future, the consumption of alcoholic beverages in Finland is set to increase – along with alcohol-related problems. This is true regardless of whether excise duties on alcoholic beverages are retained at their current level or whether they are lowered in response to the growth of duty-free imports. However, any decisions taken in Finland on excise duties will certainly influence the rate at which alcohol consumption and alcohol-related problems will increase; the extent to which people will buy their drink at home or import it; as well as state incomes from excise duties on alcoholic beverages and the business environment of alcohol-related industries. This article discusses the results of a project whose explicit aim was to weigh the health and social consequences of lowered excise duties on alcoholic beverages and lower prices, the impacts of such moves on the state and the public economy, and the impacts on alcohol-related industries.