The Impact of an Allowance for Corporate Equity on Location Attractiveness

back to overview

Type and Duration

PhD-Thesis, March 2010 until October 2014 (finished)

Coordinator

Chair for Tax Management and the Laws of Liechtenstein and International Taxation

Main Research

Wealth Management

Field of Research

Company Taxation

Description

The discourse on sophisticated and modern tax systems is generally accompanied by a variety of challenges which are not only based on traditional tax law principles but also on objectives and ideals well-established in economics. Based on a long-term research commitment, the postulate of decision neutrality has brought forward efficiency-enhancing approaches such as the Allowance for Corporate Equity (ACE). The intended guarantee of a decision neutral corporate taxation system implies the prevention of any means of taxation distorting an efficient allocation of goods and is therefore connected with advantages in a decision theory context. So far, the impact of such an approach on the international competition of tax systems are largely unexplored and therefore object of Mr. Busch`s dissertation project. The aim is to analyse the effects of an interest-adjusted profit tax on the location attractiveness of countries, which seems inevitable due to increasing international competition. In the case of Liechtenstein, the ACE-concept was implemented into the tax system in the form of a Notional Interest Deduction. Therefore the tax system of the Principality of Liechtenstein shall form the basis for the intended scientific analysis.

Reference to Liechtenstein

Durch die wissenschaftliche Analyse des in Liechtenstein in Form des Eigenkapital-Zinsabzugs implementierten zinsbereinigten Steuersystems können die hiermit einhergehenden Attraktivitätswirkungen sowie die Folgen auf das Steueraufkommen erforscht und dargestellt werden. Das Schliessen der Forschungslücken soll Aufschluss darüber geben, ob Liechtenstein mit dem Eigenkapital-Zinsabzug über einen fortschrittlichen und attraktivitätsfördernden Steuersystemansatz verfügt, mit welchem sich Liechtenstein innerhalb des internationalen Steuerstandortwettbewerbs in einer steuersystematisch stringenten Art und Weise positionieren kann, ohne dabei die Steueraufkommenswirkungen missachten zu müssen.

Keywords

Tax Competition, Allowance for Corporate Equity (ACE)

PhD-Student

Dr. Simon Busch, LL.M.

Supervisor

Prof. Dr. Martin Wenz

Co-Supervisor

Prof. Dr. Deborah Schanz