IDEAS home Printed from https://ideas.repec.org/a/prg/jnlefa/v2014y2014i4id130.html
   My bibliography  Save this article

The IFRS as Tax Base: Potential Impact on a Small Open Economy

Author

Listed:
  • David Procházka

Abstract

The IFRS adoption has improved the quality of accounting information significantly. However, huge costs are incurred by all subjects involved. The process has considerable consequences for tax systems, too. State authorities are solving how to ensure the control over tax duty fulfilment under a new financial reporting system. As corporate income tax systems in code law countries are tightly bound up with accounting regulation, governments are forced to decide whether and in which way companies preparing financial statements under the IFRS shall reflect the IFRS based figures in their income tax returns. The paper focuses on specifics of a small open economy, such as the Czech Republic. Four cardinal research issues are identified, if the eligibility of the IFRS as a tax base is ruminated on. Three issues are already assessed with the reference to publicly available data; the last one needs further scrutiny, as non-public data from tax returns are needed for the analysis.

Suggested Citation

  • David Procházka, 2014. "The IFRS as Tax Base: Potential Impact on a Small Open Economy," European Financial and Accounting Journal, Prague University of Economics and Business, vol. 2014(4), pages 59-75.
    • Handle: RePEc:prg:jnlefa:v:2014:y:2014:i:4:id:130
    DOI: 10.18267/j.efaj.130
    as

    Download full text from publisher

    File URL: http://efaj.vse.cz/doi/10.18267/j.efaj.130.html
    Download Restriction: free of charge
    File URL: http://efaj.vse.cz/doi/10.18267/j.efaj.130.pdf
    Download Restriction: free of charge
    File URL: https://libkey.io/10.18267/j.efaj.130?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Razin, Assaf & Sadka, Efraim, 1991. "International tax competition and gains from tax harmonization," Economics Letters, Elsevier, vol. 37(1), pages 69-76, September.
    2. Haverals, Jacqueline, 2005. "IAS/IFRS in Belgium: Quantitative Analysis of the Impact on the Tax Burden of Companies," ZEW Discussion Papers 05-38, ZEW - Leibniz Centre for European Economic Research.
    3. Fuest, Clemens & Huber, Bernd & Mintz, Jack, 2005. "Capital Mobility and Tax Competition," Foundations and Trends(R) in Microeconomics, now publishers, vol. 1(1), pages 1-62, December.
    4. Oestreicher, Andreas & Spengel, Christoph, 2007. "Tax Harmonisation in Europe: The Determination of Corporate Taxable Income in the EU Member States," ZEW Discussion Papers 07-035, ZEW - Leibniz Centre for European Economic Research.
    5. Heckemeyer, Jost H. & Overesch, Michael, 2013. "Multinationals' profit response to tax differentials: Effect size and shifting channels," ZEW Discussion Papers 13-045, ZEW - Leibniz Centre for European Economic Research.
    6. Spengel, Christoph & Ortmann-Babel, Martina & Zinn, Benedikt & Matenaer, Sebastian, 2012. "A common corporate tax base for Europe: An impact assessment of the draft council directive on a CC(C)TB," ZEW Discussion Papers 12-039, ZEW - Leibniz Centre for European Economic Research.
    7. David Procházka & Cristina Procházková Ilinitchi, 2011. "The Theoretical Relationships among Foreign Direct Investments, Migration and IFRS Adoption," European Financial and Accounting Journal, Prague University of Economics and Business, vol. 2011(4), pages 85-100.
    8. Annelies Roggeman & Isabelle Verleyen & Philippe Van Cauwenberge & Carine Coppens, 2014. "Impact of a Common Corporate Tax Base on the effective tax burden in Belgium," Journal of Business Economics and Management, Taylor & Francis Journals, vol. 15(3), pages 530-543, June.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Dana Kubickova & Irena Jindrichovska, 2016. "Comparability and Reliability of Financial Information in the Sector of Czech SMES (ten years of IFRS as a part of Czech accounting context)," European Research Studies Journal, European Research Studies Journal, vol. 0(4), pages 64-77.
    2. Rasa Subačienė & Lehte Alver & Inta Brūna & Mirjana Hladika & Daša Mokošová & Jan Molín, 2018. "Evaluation of accounting regulation evolution in selected countries," Entrepreneurship and Sustainability Issues, VsI Entrepreneurship and Sustainability Center, vol. 6(1), pages 139-175, September.
    3. Rasa Subačienė & Lehte Alver & Inta Brūna & Mirjana Hladika & Daša Mokošová & Jan Molín, 2018. "Evaluation of accounting regulation evolution in selected countries," Post-Print hal-02121121, HAL.
    4. Ladislav Mejzlík & Markéta Arltová & David Procházka & Leoš Vítek, 2015. "Implementace mezinárodních standardů účetního výkaznictví v České republice a její vliv na zdanění podniků [The Adoption of International Financial Reporting Standards in the Czech Republic and Its," Politická ekonomie, Prague University of Economics and Business, vol. 2015(7), pages 811-832.
    5. Miluse Korbelova, 2016. "How International Financial Reporting Standards (IFRS) Improve the Financing of SME’s in the Czech Republic," International Journal of Economics & Business Administration (IJEBA), International Journal of Economics & Business Administration (IJEBA), vol. 0(3), pages 36-46.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Ladislav Mejzlík & Markéta Arltová & David Procházka & Leoš Vítek, 2015. "Implementace mezinárodních standardů účetního výkaznictví v České republice a její vliv na zdanění podniků [The Adoption of International Financial Reporting Standards in the Czech Republic and Its," Politická ekonomie, Prague University of Economics and Business, vol. 2015(7), pages 811-832.
    2. Kager, Rebekka & Niemann, Rainer, 2011. "Reconstruction of tax balance sheets based on IFRS information: A case study of listed companies within Austria, Germany, and the Netherlands," arqus Discussion Papers in Quantitative Tax Research 120, arqus - Arbeitskreis Quantitative Steuerlehre.
    3. Ronald B. Davies & Julien Martin & Mathieu Parenti & Farid Toubal, 2018. "Knocking on Tax Haven’s Door: Multinational Firms and Transfer Pricing," The Review of Economics and Statistics, MIT Press, vol. 100(1), pages 120-134, March.
    4. Baskaran, Thushyanthan & Lopes da Fonseca, Mariana, 2013. "The economics and empirics of tax competition: A survey," University of Göttingen Working Papers in Economics 163, University of Goettingen, Department of Economics.
    5. George R. Zodrow, 2019. "Capital Mobility and Capital Tax Competition," World Scientific Book Chapters, in: George R Zodrow (ed.), TAXATION IN THEORY AND PRACTICE Selected Essays of George R. Zodrow, chapter 18, pages 543-570, World Scientific Publishing Co. Pte. Ltd..
    6. Ronald B. Davies & Iulia Siedschlag & Zuzanna Studnicka, 2021. "The impact of taxes on the extensive and intensive margins of FDI," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 28(2), pages 434-464, April.
    7. Margaret K. McKeehan & George R. Zodrow, 2019. "Balancing Act: Weighing the Factors Affecting the Taxation of Capital Income in a Small Open Economy," World Scientific Book Chapters, in: George R Zodrow (ed.), TAXATION IN THEORY AND PRACTICE Selected Essays of George R. Zodrow, chapter 12, pages 347-396, World Scientific Publishing Co. Pte. Ltd..
    8. Bräutigam, Rainer & Spengel, Christoph & Stutzenberger, Kathrin, 2017. "The development of corporate tax structures in the European Union from 1998 to 2015 - Qualitative and quantitative analysis," ZEW Discussion Papers 17-034, ZEW - Leibniz Centre for European Economic Research.
    9. Streif, Frank, 2015. "Tax competition in Europe: Europe in competition with other world regions?," ZEW Discussion Papers 15-082, ZEW - Leibniz Centre for European Economic Research.
    10. Daniel Anarfi & Danuše Nerudová, 2018. "Profit Shifting and the Tax Response of Multinational Banks in Eastern Europe," Acta Universitatis Agriculturae et Silviculturae Mendelianae Brunensis, Mendel University Press, vol. 66(3), pages 729-736.
    11. Pica Giovanni, 2010. "Capital Markets Integration and Labor Market Institutions," The B.E. Journal of Macroeconomics, De Gruyter, vol. 10(1), pages 1-57, March.
    12. Niels Johannesen & Thomas Tørsløv & Ludvig Wier, 2016. "Are less developed countries more exposed to multinational tax avoidance? Method and evidence from micro-data," WIDER Working Paper Series 010, World Institute for Development Economic Research (UNU-WIDER).
    13. Jean Gabszewicz & Ornella Tarola & Skerdilajda Zanaj, 2016. "Migration, wages and income taxes," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 23(3), pages 434-453, June.
    14. Zodrow, George R, 2003. "Tax Competition and Tax Coordination in the European Union," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 10(6), pages 651-671, November.
    15. Fuest, Clemens & Spengel, Christoph & Finke, Katharina & Heckemeyer, Jost H. & Nusser, Hannah, 2013. "Profit shifting and 'aggressive' tax planning by multinational firms: Issues and options for reform," ZEW Discussion Papers 13-078, ZEW - Leibniz Centre for European Economic Research.
    16. Jacob Frenkel & Assaf Razin & Efraim Sadka, 1991. "International Taxation in an Integrated World," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262061430, December.
    17. Krautheim, Sebastian & Schmidt-Eisenlohr, Tim, 2011. "Heterogeneous firms, 'profit shifting' FDI and international tax competition," Journal of Public Economics, Elsevier, vol. 95(1-2), pages 122-133, February.
    18. Jarkko Harju & Ilpo Kauppinen & Olli Ropponen, 2017. "Firm Responses to an Interest Barrier: Empirical Evidence," EconPol Working Paper 3, ifo Institute - Leibniz Institute for Economic Research at the University of Munich.
    19. Reister, Timo & Spengel, Christoph & Finke, Katharina & Heckemeyer, Jost Henrich, 2008. "ZEW Corporate Taxation Microsimulation Model (ZEW TaxCoMM)," ZEW Discussion Papers 08-117, ZEW - Leibniz Centre for European Economic Research.
    20. Fabien Candau & Jacques Le Cacheux, 2017. "Corporate Income Tax as a Genuine own Resource," Working papers of CATT hal-01847937, HAL.

    More about this item

    Keywords

    IFRS; Small open economy; Taxation;
    All these keywords.

    JEL classification:

    • H25 - Public Economics - - Taxation, Subsidies, and Revenue - - - Business Taxes and Subsidies
    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:prg:jnlefa:v:2014:y:2014:i:4:id:130. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Stanislav Vojir (email available below). General contact details of provider: https://edirc.repec.org/data/uevsecz.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.