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Evolving Connections Between Tax and Financial Reporting in Italy

Author

Listed:
  • Giovanna Gavana

    (Department of Economics, University of Insubria, Italy)

  • Gabriele Guggiola

    (Department of Economics, University of Insubria, Italy)

  • Anna Marenzi

    (Department of Economics, University of Insubria, Italy)

Abstract

This paper analyzes the evolution of the relationship between tax and financial reporting in Italy after the mandatory introduction of IFRS for listed companies in 2005. In order to assess this link we will use the methodology developed by Lamb et al. (1998). Italy represents an interesting case study because IFRS have become mandatory, for listed companies, also for what concerns individual, and fiscally relevant, accounts. Therefore, two accounting systems, one based on IFRS and one based on Italian Gaap coexist, originating the emergence of two rather different linkages between tax and financial reporting. IFRS and tax reporting exhibit an high degree of disconnection, while Italian Gaap, according to a continental European accounting tradition, are heavily linked to fiscal rules. The analysis will point out a rapidly evolving situation, with links between both accounting systems (IFRS and Italian Gaap) and tax reporting getting tighter as a consequence of last years tax reforms. JEL Classification: H20, M41

Suggested Citation

  • Giovanna Gavana & Gabriele Guggiola & Anna Marenzi, 2010. "Evolving Connections Between Tax and Financial Reporting in Italy," Economics and Quantitative Methods qf1001, Department of Economics, University of Insubria.
    • Handle: RePEc:ins:quaeco:qf1001
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    References listed on IDEAS

    as
    1. Christopher Nobes & Hans Robert Schwencke, 2006. "Modelling the links between tax and financial reporting: A longitudinal examination of norway over 30 years up to IFRS adoption," European Accounting Review, Taylor & Francis Journals, vol. 15(1), pages 63-87.
    2. Eva Eberhartinger & Margret Klostermann, 2007. "What if IFRS were a Tax Base? New Empirical Evidence from an Austrian Perspective," Accounting in Europe, Taylor & Francis Journals, vol. 4(2), pages 141-168, December.
    3. Ester Oliveras & Xavier Puig, 2005. "The Changing Relationship between Tax and Financial Reporting in Spain," Accounting in Europe, Taylor & Francis Journals, vol. 2(1), pages 195-207, January.
    4. Fulvia Rocchi, 1996. "Accounting and taxation in Italy," European Accounting Review, Taylor & Francis Journals, vol. 5(1), pages 981-989.
    5. Margaret Lamb & Christopher Nobes & Alan Roberts, 1998. "International Variations in the Connections Between Tax and Financial Reporting," Accounting and Business Research, Taylor & Francis Journals, vol. 28(3), pages 173-188, March.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Luca Menicacci, 2022. "Financial reporting and book-tax conformity: A review of the issues," FINANCIAL REPORTING, FrancoAngeli Editore, vol. 2022(1), pages 41-77.
    2. Costel Istrate, 2011. "Substance Over Form In A Romanian Book-Tax Approach," Analele Stiintifice ale Universitatii "Alexandru Ioan Cuza" din Iasi - Stiinte Economice (1954-2015), Alexandru Ioan Cuza University, Faculty of Economics and Business Administration, vol. 2011, pages 29-39, july.
    3. Vera Palea, 2012. "Are IFRS Value-Relevant for Separate Financial Statements? Evidence from the Italian Stock Market," Department of Economics and Statistics Cognetti de Martiis. Working Papers 201211, University of Turin.
    4. Palea, Vera, 2014. "Are IFRS value-relevant for separate financial statements? Evidence from the Italian stock market," Journal of International Accounting, Auditing and Taxation, Elsevier, vol. 23(1), pages 1-17.
    5. Nobes, Christopher, 2018. "Lessons from misclassification in international accounting," The British Accounting Review, Elsevier, vol. 50(3), pages 239-254.
    6. Gonzalo Angulo, José Antonio, 2014. "La reforma contable española de 2007: un balance," Revista de Contabilidad - Spanish Accounting Review, Elsevier, vol. 17(2), pages 183-200.
    7. Devalle, Alain & Rizzato, Fabio & Busso, Donatella, 2016. "Disclosure indexes and compliance with mandatory disclosure—The case of intangible assets in the Italian market," Advances in accounting, Elsevier, vol. 35(C), pages 8-25.
    8. Palea Vera, 2013. "Capital Market Effects of the IFRS Adoption for Separate Financial Statements: Evidence from the Italian Stock Market," Department of Economics and Statistics Cognetti de Martiis. Working Papers 201309, University of Turin.
    9. Diego Ravenda & Maika M. Valencia-Silva & Josep M. Argiles-Bosch & Josep García-Blandón, 2021. "The Effects of Immigration on Labour Tax Avoidance: An Empirical Spatial Analysis," Journal of Business Ethics, Springer, vol. 170(3), pages 471-496, May.

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    More about this item

    Keywords

    Taxation; Accounting; International Financial Reporting Standards (IFRS);
    All these keywords.

    JEL classification:

    • H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General
    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting

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