Group Taxation, Asymmetric Taxation, and Cross-Border Investment Incentives in Austria

Arqus Quantitative Tax Research Discussion Paper No. 1

27 Pages Posted: 25 Jun 2006

See all articles by Rainer Niemann

Rainer Niemann

University of Graz, Center for Accounting Research; CESifo (Center for Economic Studies and Ifo Institute for Economic Research)

Corinna Treisch

University of Duisburg-Essen - Dept. of Economics

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Date Written: March 2005

Abstract

In 2005, Austria changed its group taxation and now provides an option for cross-border loss-offset. We analyze the combined impact of Austria's new group taxation and loss-offset limitations on cross-border investment decisions of Austrian corporations. Monte Carlo-simulations in an inter-temporal setting reveal that the impact on foreign real investment induced by the group taxation is ambiguous. Whereas marginal investment projects with decreasing cash flows tend to benefit from group taxation, innovative projects with initial losses and increasing cash flows may be discriminated. Investors should consider domestic earnings and repatriation decisions simultaneously before opting for group taxation.

Note: Downloadable document is in German.

JEL Classification: H25, G31, F23

Suggested Citation

Niemann, Rainer and Treisch, Corinna, Group Taxation, Asymmetric Taxation, and Cross-Border Investment Incentives in Austria (March 2005). Arqus Quantitative Tax Research Discussion Paper No. 1, Available at SSRN: https://ssrn.com/abstract=905757 or http://dx.doi.org/10.2139/ssrn.905757

Rainer Niemann (Contact Author)

University of Graz, Center for Accounting Research ( email )

Universitätsstr. 15 / G2
Graz, 8010
Austria
+43-316-380-6444 (Phone)
+43-316-380-9595 (Fax)

HOME PAGE: http://www.uni-graz.at/steuer

CESifo (Center for Economic Studies and Ifo Institute for Economic Research)

Poschinger Str. 5
Munich, DE-81679
Germany

Corinna Treisch

University of Duisburg-Essen - Dept. of Economics ( email )

Lotharstrasse 1
Duisburg, 47048

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