Die steuerliche Berücksichtigung von Refinanzierungsaufwendungen beim internationalen Unternehmenskauf

Ruf, Martin

doi:10.1007/s11573-010-0376-0

Cited by 3 publications

(4 citation statements)

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“…One opinion is that to deny deductions on interest incurred to finance international investments that yield foreign income not subject to domestic tax is consistent with the matching principle. In contrast under the credit system, the danger of eroding the domestic tax base is not present, as the deduction of financing costs is conceded at the same rate at which foreign profits are taxed, which saves tax 238 JAAR 14,3 neutrality (Ruf, 2010), but reduces marginal prices. Following the international debate on firms eroding the domestic tax base through conducting highly leveraged transactions, it seems to be a matter of time until Japan and the UK, as a consequence of the change, discuss overhauling their anti-erosion measures such as interest deduction regulations to combat the negative consequences of introducing the exemption system at the expense of the competitiveness.…”

Section: Discussionmentioning

confidence: 99%

“…This applies to both UK and Japan investors in both international tax systems. Under the credit system the deduction of the financing costs diminishes the tax base at the same tax rate, at which the income of a subsidiary is taxed saving tax neutrality (Ruf, 2010). For the exemption method the same tax deduction however is subject to the potentially lower foreign tax rate, as long as there is no limitation to tax deductibility of financing expenses, In addition to that a reduced tax or no tax at all applies in the jurisdiction of the parent, while interest expenses are II, the marginal purchase prices for UK and Japan are denoted in monetary units (MU) and are calculated based on Equation ( 9) in connection with the capitalized earnings value Equations ( 1)-( 7) for the two extreme cases of either financing the acquisition entirely via equity or entirely via debt…”

Section: Jaar 143mentioning

confidence: 99%

“…Bauer et al (2009) show the implications of the introduction of a group relief system and changes in corporate and personal tax rates due to tax reforms like the reform act of business taxation 2008 in Germany on marginal purchase and seller prices in corporate acquisitions. Ruf (2010) analyses how the deduction of interest expenses when financing an international M&A transaction via debt affects the attractiveness of such transactions. Rossi and Volpin (2004) show that the volume of cross-border transactions is determined by accounting standards and shareholder protection across countries.…”

Section: Introduction Of the Exemption Systemmentioning

confidence: 99%

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The introduction of the exemption system for foreign profits and its effects on international acquisitions – the UK and Japan regaining international tax competitiveness?

Hohler

2013

Journal of Applied Accounting Research

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Purpose -Both, the UK and Japan abolished the tax credit system for foreign source dividends in 2009 in favour of the exemption system. With the move towards a dividend exemption system the governments intended to enhance the international tax competitiveness of their countries. The purpose of this paper is to evaluate the implications of substituting the credit system for the exemption system in the UK and Japan on cross-border transaction prices when competing for international acquisitions. Design/methodology/approach -The paper uses an economic model under certainty to analyse the changes in cross-border marginal purchase and seller prices as a result of the introduction of the newly introduced dividend exemption system. Findings -Shifting to an exemption system has ambiguous effects on the ability to compete for foreign acquisitions: investors from both countries are able to pay higher prices in the course of acquisitions, but while investors from the UK become more competitive, the relative competitive position for Japanese investors hardly changes and remains relatively constrained, independent of the form of double taxation relief. Thus the author verifies that the international tax regime is not the only determinant influencing the competitive position, ranking second to, e.g., the interaction with international tax rate differentials. Originality/value -The international tax reforms in UK and Japan in 2009 offer a unique opportunity to study the impact of international tax policy on the international tax competitiveness of multinational firms in the course of foreign acquisitions. Evidence from this paper is not exclusively applicable to the UK and Japan setting. The observed effects shed new light on the intensified debate in the USA of changing the international tax system by analysing the impact on the bidding situation in international acquisitions in a real-world transition scenario.

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Section: Discussionmentioning

confidence: 99%

Section: Jaar 143mentioning

confidence: 99%

Section: Introduction Of the Exemption Systemmentioning

confidence: 99%

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The introduction of the exemption system for foreign profits and its effects on international acquisitions – the UK and Japan regaining international tax competitiveness?

Hohler

2013

Journal of Applied Accounting Research

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“…10 Additionally, evidence indicates that multinationals use tax rate dierences for prot shifting 11 . Ruf (2010) summarizes the tax structuring options in international acquisitions. Generally, multinationals can decide to acquire a given target-company through an acquisition vehicle in the target-country or via a subsidiary in a dierent country.…”

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confidence: 99%

M&A and the Tax Benefits of Debt-Financing

Scheuering¹

2014

SSRN Journal

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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.M &A and the Tax Benets of Debt-Financing * Uwe ScheueringCentre for European Economic Research (ZEW) † March 2014Abstract:The deductibility of interest expenses from the corporate tax base creates an incentive for acquiring companies to nance a takeover with debt. In this paper, I investigate the impact of prot taxation on the nancing decision in corporate acquisitions for the rst time for a sample of dierent acquirer-countries mainly in Europe. The likelihood to observe a debt-nanced acquisition is found to increase in the acquirer's tax rate. In addition, I take into account that the nancing decisions of particular acquisitions might not be independent from other investment decisions. Therefore, I analyze the acquirer's capital structure development around the acquisition and nd an increase in the statutory tax rate by one %-point to be associated with a stronger increase in the debt ratio by 0.55 %-points during the acquisition period. Non-Technical Summary I examine the extent to which acquiring companies make use of the tax advantage of debt-nancing in the acquisition period. The intuition is that companies can reduce their tax burden by means of debt-nancing because interest expenses are deductible from the corporate tax base and therefore create a tax shield. In contrast, dividends, in a sense the interest payments to equity providers, are not deductible.The relevance of interest tax shields for acquiring companies was highlighted by the French announcement of increasing taxes and at the same time restricting the deductibility of interest expenses in 2012. Private equity rms, which often undertake mainly debtnanced acquisitions, heavily complained about this notication and even threatened to leave France.The tax advantage of debt might lead to economically inecient high debt ratios and, therefore, to higher risk of nancial distress and lower resistance to crisis. Moreover, it can make acquisitions protable, which would not occur in a world without tax discrimination of equity. Furthermore, multinational companies face tax planning opportunities when it comes to the nancing decision of corporate acquisitions due to the dierent tax systems and tax rates in the countries their subsidiaries are located in.I have analyzed the nancing decision in corporate acquisitions between 2001 and 2011 across many, mainly European countries. The empirical approach consisted of two parts. First, I examined the probability to observe a debt-nanced deal. Second, I took a look...

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Is analytical tax research alive and kicking? Insights from 2000 until 2022

Niemann

Sailer

2023

J Bus Econ

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This literature review evaluates the development and impact of analytical tax research (ATR) from 2000 until 2022. Based on 345 research papers, we (1) identify emerging and declining research topics in the area of ATR, (2) examine the trends in publication outlets and author teams, and (3) analyze citation metrics at both the level of articles and authors to measure perception and impact of ATR. First, we find that rather new topics, such as the impact of taxation on entrepreneurship, innovation and R&D, have begun to attract attention. Second, tax journals are not the preferred outlet for ATR and author teams exhibit a decreasing gender imbalance. Third, citation metrics are highly centered on specific publications and individual authors. Moreover, publications that appeared in economics and finance journals generate disproportionately large citation numbers compared to those that were published in tax, accounting and business research journals. Authors from Anglo-American institutions have significantly more citations than researchers from German-speaking countries. We find that ATR does not form a closed community. It unites researchers from different backgrounds based on their— sometimes nonrecurring—thematic interest in the effects of taxation on economic decisions.

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Die steuerliche Berücksichtigung von Refinanzierungsaufwendungen beim internationalen Unternehmenskauf

Cited by 3 publications

References 15 publications

The introduction of the exemption system for foreign profits and its effects on international acquisitions – the UK and Japan regaining international tax competitiveness?

The introduction of the exemption system for foreign profits and its effects on international acquisitions – the UK and Japan regaining international tax competitiveness?

M&A and the Tax Benefits of Debt-Financing

Is analytical tax research alive and kicking? Insights from 2000 until 2022

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