Shift from gross profit taxation to distributed profit taxation: Are there effects on firms?

Collection:
Mokslo publikacijos / Scientific publications
Document Type:
Straipsnis / Article
Language:
Anglų kalba / English
Title:
Shift from gross profit taxation to distributed profit taxation: Are there effects on firms?
In the Journal:
Journal of comparative economics. 2013, 41, p. 1092-1105
Summary / Abstract:

LTReikšminiai žodžiai: Investicijos; Kapitalo struktūra; Korporacinis pajamų mokestis; Likvidumas; Lyginamoji ekonominė raida; Pelno mokestis; Capital structure; Comparative economic development; Corporate income tax; Investments; Liquidity.

ENThis paper investigates the consequences of the corporate tax reform in Estonia in 2000. This unique reform nullified the taxation of retained earnings and maintained corporate income tax only on distributed profits. We investigate the outcome of the reform by comparing the performance of the affected firms in Estonia with that of firms from Latvia and Lithuania, the two other Baltic countries. We use firm-level financial data and the difference in differences approach for our analysis. The results are consistent with an increase in holdings of liquid assets and lower use of debt financing after the reform. A positive relationship of the reform with post-reform investment and productivity has also been found. The results point to a stronger effect on smaller firms. [From the publication]

DOI:
10.1016/j.jce.2013.01.011
ISSN:
0147-5967
Related Publications:
Adjustment under a currency peg: Estonia, Latvia and Lithuania during the global financial crisis 2008–09 / Catriona Purfield, Christoph Rosenberg. IMF working paper. 2010, WP/10/213, p. 1-35.
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https://www.lituanistika.lt/content/79479
Updated:
2020-07-09 21:14:47
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