Die Dis cus si on Pape rs die nen einer mög lichst schnel len Ver brei tung von neue ren For schungs arbei ten des ZEW. Die Bei trä ge lie gen in allei ni ger Ver ant wor tung der Auto ren und stel len nicht not wen di ger wei se die Mei nung des ZEW dar.Dis cus si on Papers are inten ded to make results of ZEW research prompt ly avai la ble to other eco no mists in order to encou ra ge dis cus si on and sug gesti ons for revi si ons. The aut hors are sole ly respon si ble for the con tents which do not neces sa ri ly repre sent the opi ni on of the ZEW.Download this ZEW Discussion Paper from our ftp server:ftp://ftp.zew.de/pub/zew-docs/dp/dp10036.pdf Non-technical summaryThis paper presents a new corporate microsimulation model, ZEW TaxCoMM, which allows for the coherent micro-based analysis (ex ante and ex post) of reform induced revenue implications and the distribution of the tax burden between firms of different characteristics. In this paper, ZEW TaxCoMM is employed to evaluate the consequences of the 2008 German corporate tax reform.The German corporate tax reform of 2008 has brought about important cuts in corporate tax rates, which were at the same time accompanied by significant changes in the determination of the tax base for both major German corporate taxes -corporate income tax and trade tax. The reform followed the distinct and internationally prevalent pattern of tax rate cut cum base broadening. Hence, the results on the distribution of the tax burden according to firm characteristics stand exemplarily for those reforms which follow a similar pattern. Especially in view of the current economic crisis, questions on the distribution of the tax burden among firms of different characteristics have arisen and still remain at the heart of the academic and political debate in Germany and other countries.As a result, the ZEW TaxCoMM simulations show that less than 5% of all corporations did not benefit from the 2008 German corporate tax reform. The average annual relief as measured by the average decline in the effective tax burden on cash flows amounts to 2.8 percentage points for large corporations and to 6 percentage points for small corporations. Clearly, small firms benefited more. As to tax revenues, the reform induced decrease amounts to € 9.8 billion. The decline in tax revenues is more important for the corporate income tax. The trade tax thus gains fiscally in importance.Furthermore, the simulation illustrates that firms with low profitability, high debt ratio and high capital intensity benefit least from the reform. This is a consequence of the reform detaching the tax base from profits by banning the deduction of business expenses. This additionally endangers the existence of firms in times of massive economic downturn. Indeed, policy makers in Germany and other countries reacted by modifying the most harmful regulations which implied the taxation of economic worth instead of profits. Abstract: The German corporate tax reform of 2008 has brought about important cuts in corporate tax rates, w...

Die Dis cus si on Pape rs die nen einer mög lichst schnel len Ver brei tung von neue ren For schungs arbei ten des ZEW. Die Bei trä ge lie gen in allei ni ger Ver ant wor tung der Auto ren und stel len nicht not wen di ger wei se die Mei nung des ZEW dar.Dis cus si on Papers are inten ded to make results of ZEW research prompt ly avai la ble to other eco no mists in order to encou ra ge dis cus si on and sug gesti ons for revi si ons. The aut hors are sole ly respon si ble for the con tents which do not neces sa ri ly repre sent the opi ni on of the ZEW.Download this ZEW Discussion Paper from our ftp server:ftp://ftp.zew.de/pub/zew-docs/dp/dp08117.pdf Non-Technical SummaryPolitical discussion in Germany and other European countries revealed the outstanding relevance accorded to revenue and distribution effects of tax reforms in the field of corporate taxation. Both issues are taken as crucial determinants for the feasibility and sustainability of tax systems thus eclipsing systematic aspects of taxation at least partially. So far, the coverage of existing quantitative approaches on the impact of corporate taxation does not reflect this demand. Widely recognised approaches focus on the computation of effective tax burdens thus providing important insights into the incentives of taxation. Unfortunately, these models do not allow robust conclusions on revenue impacts and distributional consequences of tax reforms. In view of the scarce evidence on these issues at least at corporate level, the intention of this paper is to put forward an instrument explicitly allowing for policy analysis of corporate tax reforms. The proposed corporate microsimulation model has been developed at the Centre of European Economic Research (ZEW) in collaboration with the University of Mannheim.The idea of this paper is to employ the methodology of microsimulation for policy analyses since this methodology captures structural differences of micro units and is thus appropriate to draw conclusions on the individual financial impacts of tax reforms. The key feature of the proposed corporate microsimulation model consists in processing financial statements taken from the DAFNE data base of the Bureau van Dijk and deriving the tax base for corporate income tax and trade tax endogenously. In this context the consideration of firm specific balance-sheet data and profit and loss account data provides a linkage to the real economic sphere which is crucial to account for the real development of corporations over time, to capture changes in the legal framework adequately and later on to integrate behavioural responses to tax reforms. To simulate tax regulations according to a reference tax system or a reform proposal, the data-set is supplemented by survey data on tax accounting practices. It is shown that the distinct set-up of the proposed model can account for tax regulations in great detail.Among other elements of the corporate tax base, regulations governing depreciation, provisions, creditors and financial results for tax purposes are conside...

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Die Dis cus si on Pape rs die nen einer mög lichst schnel len Ver brei tung von neue ren For schungs arbei ten des ZEW. Die Bei trä ge lie gen in allei ni ger Ver ant wor tung der Auto ren und stel len nicht not wen di ger wei se die Mei nung des ZEW dar.Dis cus si on Papers are inten ded to make results of ZEW research prompt ly avai la ble to other eco no mists in order to encou ra ge dis cus si on and sug gesti ons for revi si ons. The aut hors are sole ly respon si ble for the con tents which do not neces sa ri ly repre sent the opi ni on of the ZEW.Download this ZEW Discussion Paper from our ftp server:ftp://ftp.zew.de/pub/zew-docs/dp/dp10036.pdf Non-technical summaryThis paper presents a new corporate microsimulation model, ZEW TaxCoMM, which allows for the coherent micro-based analysis (ex ante and ex post) of reform induced revenue implications and the distribution of the tax burden between firms of different characteristics. In this paper, ZEW TaxCoMM is employed to evaluate the consequences of the 2008 German corporate tax reform.The German corporate tax reform of 2008 has brought about important cuts in corporate tax rates, which were at the same time accompanied by significant changes in the determination of the tax base for both major German corporate taxes -corporate income tax and trade tax. The reform followed the distinct and internationally prevalent pattern of tax rate cut cum base broadening. Hence, the results on the distribution of the tax burden according to firm characteristics stand exemplarily for those reforms which follow a similar pattern. Especially in view of the current economic crisis, questions on the distribution of the tax burden among firms of different characteristics have arisen and still remain at the heart of the academic and political debate in Germany and other countries.As a result, the ZEW TaxCoMM simulations show that less than 5% of all corporations did not benefit from the 2008 German corporate tax reform. The average annual relief as measured by the average decline in the effective tax burden on cash flows amounts to 2.8 percentage points for large corporations and to 6 percentage points for small corporations. Clearly, small firms benefited more. As to tax revenues, the reform induced decrease amounts to € 9.8 billion. The decline in tax revenues is more important for the corporate income tax. The trade tax thus gains fiscally in importance.Furthermore, the simulation illustrates that firms with low profitability, high debt ratio and high capital intensity benefit least from the reform. This is a consequence of the reform detaching the tax base from profits by banning the deduction of business expenses. This additionally endangers the existence of firms in times of massive economic downturn. Indeed, policy makers in Germany and other countries reacted by modifying the most harmful regulations which implied the taxation of economic worth instead of profits. Abstract: The German corporate tax reform of 2008 has brought about important cuts in corporate tax rates, w...

This paper analyzes the impact of the proposed German company tax reform for the year 2008 on the effective average tax burden of medium-sized companies. The effective average tax burden at the corporate level in Germany is reduced by tax rate cuts concerning the corporate income tax and the trade tax. Thus Germany becomes more attractive for international investors from a tax perspective. At the shareholder level the German tax reform results in a minor reduction of the effective tax burden compared to the corporate level. This is because the reduction of the corporate tax burden is compensated to some extent by the abolition of the half-income system and the introduction of a final withholding tax on capital income including dividends. For unincorporated partnerships the tax reform proposal can lead to higher effective tax burdens although there is an optional reduced rate of income tax for retained earnings. Therefore, the reform is not neutral towards the legal form of a company. In addition to that the reform fails to integrate corporate taxes into personal income tax. Der Beitrag untersucht den Einfluss der Unternehmensteuerreform 2008 in Deutschland auf die effektive Steuerbelastung mittelständischer Unternehmen. Aus der Sicht internationaler Investoren verbessert sich die steuerliche Standortattraktivität Deutschlands gemessen an der effektiven Durchschnittssteuerbelastung auf Kapitalgesellschaftsebene infolge von Tarifsenkungen im Bereich von Gewerbesteuer und Körperschaftsteuer. Unter Einbeziehung der Anteilseigner fällt die Entlastung jedoch geringer aus, wofür hauptsächlich der geplante Ersatz des bisherigen Halbeinkünfteverfahrens durch eine Abgeltungsteuer auf private Kapitalerträge verantwortlich ist. Ein anderes Bild zeichnet sich für ertragsstarke mittelständische deutsche Personengesellschaften ab, für die die Unternehmensteuerreform 2008 trotz der Möglichkeit der Inanspruchnahme einer niedrig besteuerten Thesaurierungsrücklage Mehrbelastungen mit sich bringen kann. Im Hinblick auf die nationale Unternehmensbesteuerung werden die Ziele einer Verbesserung der Rechtsform- und Finanzierungsneutralität der Besteuerung klar verfehlt. Ausschlaggebend ist die mangelnde Abstimmung der Unternehmensbesteuerung mit der vorgesehenen Abgeltungsteuer.Effective Company Tax Burden, International Tax Comparison, Company Tax Reform