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Why don't they minimize their tax? An experimental approach to cross border hybrid finance.

Eberhartinger, Eva and Fellner, Gerlinde (2010) Why don't they minimize their tax? An experimental approach to cross border hybrid finance. Discussion Papers SFB International Tax Coordination, 39. SFB International Tax Coordination, WU Vienna University of Economics and Business, Vienna.

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Abstract

International tax law allows, under certain circumstances, to considerably reduce the group average tax rate. In some cases, even the tax-free repatriation of yields on intragroup finance is possible, in particular when using hybrid finance. These cases are normally connected to complex questions of foreign, domestic, and bilateral tax law as well as to uncertainty on whether the intended tax consequences will be upheld by the fiscs in future years. We experimentally investigate the two key variables, legal uncertainty and tax complexity while controlling for decision makers' risk attitude. Results show that overall tax complexity has a negative effect on the probability to choose a hybrid finance instrument, while legal uncertainty has not. The impact of the two factors is moderated by decision makers' risk attitudes. (author's abstract)

Item Type: Paper
Keywords: hybrid finance / tax / experiment / uncertainty / complexity / hybride Finanzierung / Steuersenkung
Classification Codes: RVK PP 9085 ; JEL C91, D03, D81, H25
Divisions: Departments > Finance, Accounting and Statistics > Accounting and Auditing > Betriebswirtschaftliche Steuerlehre
Departments > Volkswirtschaft
Departments > Öffentliches Recht und Steuerrecht > Österr. und Internat. Steuerrecht
Depositing User: Repository Administrator
Date Deposited: 26 Jul 2010 13:35
Last Modified: 14 Nov 2014 12:26
URI: http://epub.wu.ac.at/id/eprint/318

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