In particular in Germany and Austria, but also in other countries, extensive theoretical and analytical research has been published on the potential tax effects should International Financial Reporting Standards (IFRS) be used as the basis for corporate taxation. Very few quantitative papers exist. This motivated us to conduct a study that quantifies the actual effects of a potential decisiveness of IFRS for the national tax base -without further questioning the usefulness of an IFRS relevance. Our paper extends existing research substantially. The research question of our paper deals with the measurement through simulation of differences in the discounted tax burden in various scenarios. Our sample comprises original data from 61 Austrian companies. The median of the difference between book values of IFRS single accounts and tax accounts for specific balance sheet items is determined. We then apply the result to the items of a typical corporate account derived from an Austrian database. As a result, depending on the term of items, we can calculate the discounted tax effects for different scenarios. It must be underlined that such highly confidential and detailed tax data is usually not available to researchers. The main preliminary finding of our empirical survey is that only in a few cases we find essential differences between IFRS and tax accounts. Our evidence suggests that no dramatic change in the tax base is to be expected. Our study provides not only new empirical evidence but also a basis for further research on a possible common consolidated corporate tax base from an academic perspective.
Purpose -Accounting practices vary not only across firms, but also across countries, reflecting the respective legal and cultural background. Attempts at harmonization therefore continue to be rebuffed. The purpose of this paper is to argue that different wordings in national laws, and different interpretations of similar wordings in national laws, can be explained by taking recourse to the philosophy of language, referring particularly to Searle and Wittgenstein. Design/methodology/approach -The example of the substance over form principle, investigated in seven countries, is particularly suitable for this analysis. It is known in all accounting jurisdictions, but still has very different roots in different European countries, with European and international influences conflicting, which is reflected in the different wording of the principle from one country to the next, and the different socially constructed realities associated with those wordings. Findings -This paper shows that, beyond accounting practices, the legal and cultural background of a country affects the wording of national law itself. The broad conclusion is that different socially constructed realities might tend to resist any attempt at harmonized socially constructed words. Originality/value -The paper contributes to the debate surrounding the possible homogenization of accounting regulations, illustrating the theory of the social construction of both "reality" and "language" on the specific application of one common principle to various Member State environments.
This paper explores the issue of the true and fair view (TFV) and the overriding principle within the European Union (EU), via a legally based analysis of the relationship between EU and national laws. We apply the supremacy of European law to methods of incorporating the TFV into national legislation, using Austria as a detailed case study, showing that all countries - maybe against their original intention - either have an override (as does Austria, contrary to the prevailing local opinion) or have failed to honour their EU commitments. As part of our argument, we explain the importance of the Roman law teleological principle in legal application and interpretation, as is well known in Continental countries. We show that the effect of the UK TFV override is in principle exactly analogous, only arguably even more powerful, which is not at all well known in Anglo-Saxon countries. We suggest reasons why the status quo ante in particular countries may be adhered to, and generalise the implications of our arguments.
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