In this study, we use advance tax rulings (ATR) to investigate the impact of fee-based tax certainty on risky investment decisions of a firm under both cash flow and tax uncertainty. We model and analyze the multi-dimensional nature of tax uncertainty from tax reforms and tax audits in expected...

We show that the manager of a sufficiently undervalued firm is incentivized to allocate financial slack for a share repurchase to gain an immediate, risk free, and corporate tax free wealth transfer from uninformed shareholders, instead of undertaking a real investment with long term, risky, and...

Acting in the interest of their residents, within limits imposed by Federal statute and by the Constitution, states have incentives to impose taxes on the profits of corporations owned by nonresidents. This paper presents a model within which a state, using an apportionment formula that includes...

This paper investigates the consequences of a series of alternative international tax designs on the strategy of a multinational enterprise regarding the cross border distribution of its investment and the choice of its financing behavior. We start with a world where no international tax rules...

The traditional avoidance literature undeservedly neglects tax base distribution as a factor affecting the avoidance price, and generally assumed to be equal to the avoidance cost. In reality, avoidance providers are usually either high-skilled specialists or insiders. The strong collusion thus,...

This paper analyzes the effect on firm behavior and national tax revenues of a policy of allowing multinational firms to choose whether to be taxed under separate accounting rules (transfer prices) or an apportionment formula. Either method can be preferred by low-cost firms and by high-cost...

Due to data restrictions, empirical tax research commonly relies on database-driven methods as a means of identifying firms' tax loss carry-forward (TLCF) status. Employing a panel of listed Italian parent companies, I am the first to empirically examine the accuracy of database-driven methods...

Bei der Auslagerung staatlicher Tätigkeiten auf private Partner kommt es für den Bereich personalintensiver Dienstleistungen durch die anfallende deutsche Umsatzsteuer zu einer zusätzlichen Kostenbelastung, die die Hoheitsträger bisher oft von Outsourcing abhält. Für den Bereich der...

This paper aims to analyze the impact of applying for an advance tax ruling and of examining complex tax issues with the help of an external consultant, on the investor's decision to invest when the environment is uncertain. Using decision theory, we first determine the maximum fee an investor...

Today we live in a globalizing economy: national open markets are steadily developing towards a global market. Within the European Union, the internal market without internal frontiers has been established. However, the fiscal sovereignty of nation states remains limited to economic activities...