What if IFRS were a Tax Base? New Empirical Evidence from an Austrian Perspective

Accounting in Europe, Vol. 4, pp. 141-168, 2007

Posted: 4 Jan 2008 Last revised: 6 Feb 2013

See all articles by Eva Eberhartinger

Eva Eberhartinger

Vienna University of Economics and Business

Margret Klostermann

Vienna University of Economics and Business

Abstract

In particular in Germany and Austria, but also in other countries, extensive theoretical and analytical research has been published on the potential tax effects in case IFRS were 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 of differences in discounted tax burden in different scenarios, by simulation. Our sample comprises original data of 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 on 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 few cases we find essential differences between IFRS and tax accounts. Our evidence suggests that no dramatic change in the tax base has 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.

Keywords: Income tax, IFRS, tax link, tax base

JEL Classification: K34, H25, M41, M44, M47

Suggested Citation

Eberhartinger, Eva and Klostermann, Margret, What if IFRS were a Tax Base? New Empirical Evidence from an Austrian Perspective. Accounting in Europe, Vol. 4, pp. 141-168, 2007, Available at SSRN: https://ssrn.com/abstract=1080512

Eva Eberhartinger (Contact Author)

Vienna University of Economics and Business ( email )

Welthandelsplatz 1
Vienna 1020
Austria

HOME PAGE: http://www.wu.ac.at

Margret Klostermann

Vienna University of Economics and Business ( email )

Welthandelsplatz 1
Vienna, Wien 1020
Austria

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Abstract Views
1,899
PlumX Metrics