Policy Work -
Consequences of digitalization on the determination and auditing of tax transfer prices – The future of the transactional profit split method
My contribution: Proposal of the project outline, calculation of costs and project execution
Duration: 2018 - 2019
Commissioned by: German Federal Ministry of Finance
The fundamental goal of this research project was to obtain theoretical and empirical insights into the consequences of digitalization on business models, value chains, and in particular their value adding factors in multinational companies. On this basis, we scrutinized the applicability of the current approach to tax transfer pricing to new business models and analyzed the necessity of reforms under the condition that transfer prices need to provide legal and planning certainty also in the digital world.
Effects of taxation on company decisions
My focus was on the project part that dealt with simulated marginal tax rates and investment decisions
Duration: 2014 - 2017
Funded by: German Research Foundation (DFG)
The objective of this research project was to quantify the behavioural reactions of companies to tax reforms affecting central areas of decision making (investment decisions, finance decisions, and profit allocation decisions). The extent of these reactions was investigated on the basis of elasticities by means of econometric analyses and, for purposes of supporting political decisions, dynamic microsimulation of tax revenues. To this end, we determined simulated marginal tax rates taking into account not only the nominal tax rate, but also relevant elements of the tax base, loss compensation provisions, and domestic group taxation regimes. A further goal was to show to what extent simulated marginal tax rates supply enhanced econometric evidence of the tax impact on company decisions.
Consequences of authoritative depreciation rules on investment activities with special reference to the leasing sector
My contribution: Proposal of the project outline, calculation of costs, project execution, draft of the final report
Duration: 2015 - 2016
Commissioned by: Federal Association of German Leasing Companies
The subject of this project was the extension, for a lessor’s tax purposes, of the depreciation period with respect to leasing property. This extension brings the depreciation period in line with the useful life of the asset. From this project, it emerged that taking a residual value into account when determining the depreciation amount, from the perspective of the statutory provisions relating to the tax balance sheet there is no reason for the tax authorities to disallow the common standard among leasing companies to base depreciation on the term of contract. Abandoning the common standard of depreciation based on contract term leads to a rise in the cost of capital, is detrimental to the neutrality of profit determination with respect to investments, and is associated with a significant decline in the potential for internal financing.