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When Taxation Changes the Course of the Year – Fiscal Year Adjustments and the German Tax Reform 2000/2001

Author

Listed:
  • Frank Blasch
  • Alfons J. Weichenrieder
  • Alfons Weichenrieder

Abstract

The paper examines 157 German listed corporations that had the option of changing their fiscal year to achieve a possible tax reduction in connection with the major tax reform of 2000/2001. The tax reduction from a change was larger, the larger the expected profits. However, with costs of changing the fiscal year, not all firms that expect a tax reduction from a change may do so. The paper presents empirical evidence that the propensity to change the fiscal year was significantly related to the amount of expected tax savings. This suggests that the corporate tax reduction – in combination with the special German transitory provisions – induced a deadweight loss: corporations incurred a non-tax cost to avoid a tax cost.

Suggested Citation

  • Frank Blasch & Alfons J. Weichenrieder & Alfons Weichenrieder, 2006. "When Taxation Changes the Course of the Year – Fiscal Year Adjustments and the German Tax Reform 2000/2001," CESifo Working Paper Series 1861, CESifo.
    • Handle: RePEc:ces:ceswps:_1861
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    File URL: https://www.cesifo.org/DocDL/cesifo1_wp1861.pdf
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    References listed on IDEAS

    as
    1. Spengel, Christoph, 2000. "Effektive Steuerbelastung der grenzüberschreitenden Geschäftstätigkeit nach den Vorschlägen zur Reform der Unternehmensbesteuerung," ZEW Discussion Papers 00-15, ZEW - Leibniz Centre for European Economic Research.
    2. Eggert Wolfgang & Weichenrieder Alfons J., 2002. "Steuerreform und Unternehmensfinanzierung / Tax Reform and Corporate Finance," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 222(5), pages 531-555, October.
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    Cited by:

    1. Nadja Dwenger & Viktor Steiner, 2014. "Financial leverage and corporate taxation: evidence from German corporate tax return data," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 21(1), pages 1-28, February.
    2. Nadja Dwenger & Pia Rattenhuber & Viktor Steiner, 2019. "Sharing the Burden? Empirical Evidence on Corporate Tax Incidence," German Economic Review, Verein für Socialpolitik, vol. 20(4), pages 107-140, November.
    3. Dwenger, Nadja & Steiner, Viktor, 2008. "Effective profit taxation and the elasticity of the corporate income tax base: Evidence from German corporate tax return data," arqus Discussion Papers in Quantitative Tax Research 57, arqus - Arbeitskreis Quantitative Steuerlehre.

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    More about this item

    Keywords

    tax reform; deadweight loss; fiscal year;
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