To Shift or Not To Shift? Intertemporal Income Shifting as a Response to the Risk Capital Allowance Introduction in Belgium

References

• Amberger, H., Eberhartinger, E., & Kasper, M. (2016). Heuristics and tax planning: Evidence from a laboratory experiment. WU International Taxation Research Paper Series No. 2016-01.
   Google Scholar
• Auerbach, A. J. (2012). The mirrlees review: A US perspective. National Tax Journal, 65(3), 685–708. doi: 10.17310/ntj.2012.3.07
   Web of Science ®Google Scholar
• Barth, M. E., Elliott, J. A., & Finn, M. W. (1999). Market rewards associated with patterns of increasing earnings. Journal of Accounting Research, 37(2), 387–413. doi: 10.2307/2491414
   Web of Science ®Google Scholar
• Bergstresser, D., & Philippon, T. (2006). CEO incentives and earnings management. Journal of Financial Economics, 80(3), 511–529. doi: 10.1016/j.jfineco.2004.10.011
   Web of Science ®Google Scholar
• Boadway, R., & Bruce, N. (1984). A general proposition on the design of a neutral business tax. Journal of Public Economics, 24(2), 231–239. doi: 10.1016/0047-2727(84)90026-4
   Web of Science ®Google Scholar
• Bonds, S. R., & Devereux, M. P. (1995). On the design of a neutral business tax under uncertainty. Journal of Public Economics, 58(1), 57–71. doi: 10.1016/0047-2727(94)01471-Y
   Web of Science ®Google Scholar
• Brekke, K. R., Garcia Pires, A. J., Schindler, D., & Schjelderup, G. (2015). Capital Taxation and Imperfect Competition: ACE vs. CBIT. IEB Working Paper No. 2015/27.
   Google Scholar
• Burggraeve, K., Jeanfils, P., Van Cauter, K., & Van Meensel, L. (2008). Macroeconomic and fiscal impact of the risk capital allowance. National Bank of Belgium Economic Review, (3), 7–47.
   Google Scholar
• Burgstahler, D., & Dichev, I. (1997). Earnings management to avoid earnings decreases and losses. Journal of Accounting and Economics, 24(1), 99–126. doi: 10.1016/S0165-4101(97)00017-7
   Web of Science ®Google Scholar
• Cahan, S. F. (1992). The effect of antitrust investigations on discretionary accruals: A refined test of the political-cost hypothesis. The Accounting Review, 67(1), 77–95.
   Web of Science ®Google Scholar
• Chan, K. H., Lin, K. Z., & Tang, F. (2013). Tax effects of book-tax conformity, financial reporting incentives, and firm size. Journal of International Accounting Research, 12(2), 1–25. doi: 10.2308/jiar-50404
   Google Scholar
• Cheng, Q., & Warfield, T. D. (2005). Equity incentives and earnings management. The Accounting Review, 80(2), 441–476. doi: 10.2308/accr.2005.80.2.441
   Web of Science ®Google Scholar
• De Mooij, R. A. (2012). Tax biases to debt finance: Assessing the problem, finding solutions. Fiscal Studies, 33(4), 489–512. doi: 10.1111/j.1475-5890.2012.00170.x
   Web of Science ®Google Scholar
• Dechow, P. M., Ge, W., & Schrand, C. (2010). Understanding earnings quality: A review of the proxies, their determinants and their consequences. Journal of Accounting and Economics, 50(2), 344–401. doi: 10.1016/j.jacceco.2010.09.001
   Web of Science ®Google Scholar
• Dechow, P. M., Sloan, R. G., & Sweeney, A. P. (1995). Detecting earnings management. The Accounting Review, 70(2), 193–225.
   Web of Science ®Google Scholar
• Dechow, P. M., Sloan, R. G., & Sweeney, A. P. (1996). Causes and consequences of earnings manipulation: An analysis of firms subject to enforcement actions by the SEC. Contemporary Accounting Research, 13(1), 1–36. doi: 10.1111/j.1911-3846.1996.tb00489.x
   Google Scholar
• Defond, M. L., & Jiambalvo, J. (1994). Debt covenant violation and manipulation of accruals. Journal of Accounting and Economics, 17(1), 145–176. doi: 10.1016/0165-4101(94)90008-6
   Web of Science ®Google Scholar
• Desai, M. A., & Dharmapala, D. (2015). Interest deductions in a multijurisdictional world. University of Chicago Coase-Sandor Institute for Law & Economics Research Paper, (725).
   Google Scholar
• Devereux, M. (2012). Issues in the design of taxes on corporate profit. National Tax Journal, 65(3), 709–730. doi: 10.17310/ntj.2012.3.08
   Web of Science ®Google Scholar
• Devereux, M., & Freeman, H. (1991). A general neutral profits tax. Fiscal Studies, 12(3), 1–15. doi: 10.1111/j.1475-5890.1991.tb00158.x
   Google Scholar
• Ecker, F., Francis, J., Olsson, P., & Schipper, K. (2013). Estimation sample selection for discretionary accruals models. Journal of Accounting and Economics, 56(2), 190–211. doi: 10.1016/j.jacceco.2013.07.001
   Web of Science ®Google Scholar
• Fane, G. (1987). Neutral taxation under uncertainty. Journal of Public Economics, 33(1), 95–105. doi: 10.1016/0047-2727(87)90084-3
   Web of Science ®Google Scholar
• Francis, J., Nanda, D., & Olsson, P. (2008). Voluntary disclosure, earnings quality, and cost of capital. Journal of Accounting Research, 46(1), 53–99. doi: 10.1111/j.1475-679X.2008.00267.x
   Web of Science ®Google Scholar
• Graham, J. R., Hanlon, M., Shevlin, T. J., & Shroff, N. (2016). Tax rates and corporate decision making. Working paper. Retrieved from http://ssrn.com/abstract=2548641
   Google Scholar
• Guenther, D. A. (1994). Earnings management in response to corporate tax rate changes – evidence from the 1986 tax-reform act. The Accounting Review, 69(1), 230–243.
   Web of Science ®Google Scholar
• Guenther, D. A., Maydew, E. L., & Nutter, S. E. (1997). Financial reporting, tax costs, and book-tax conformity. Journal of Accounting and Economics, 23(3), 225–248. doi: 10.1016/S0165-4101(97)00009-8
   Web of Science ®Google Scholar
• Hribar, P., & Jenkins, N. T. (2004). The effect of accounting restatements on earnings revisions and the estimated cost of capital. Review of Accounting Studies, 9(2–3), 337–356. doi: 10.1023/B:RAST.0000028194.11371.42
   Web of Science ®Google Scholar
• Keen, M., & King, J. (2002). The Croatian profit tax: An ace in practice. Fiscal Studies, 23(3), 401–418. doi: 10.1111/j.1475-5890.2002.tb00066.x
   Web of Science ®Google Scholar
• Kestens, K., Van Cauwenberge, P., & Christiaens, J. (2012). The effect of the notional interest deduction on the capital structure of Belgian SMEs. Environment and Planning-Part C, 30(2), 228–247. doi: 10.1068/c1163b
   Web of Science ®Google Scholar
• Klemm, A. (2007). Allowances for corporate equity in practice. Cesifo Economic Studies, 53(2), 229–262. doi: 10.1093/cesifo/ifm007
   Web of Science ®Google Scholar
• Lin, K. Z., Mills, L. F., & Zhang, F. (2013). Public versus private firm responses to the tax rate reduction in China. The Journal of the American Taxation Association, 36(1), 137–163. doi: 10.2308/atax-50618
   Google Scholar
• Lopez, T., Regier, P., & Lee, T. (1998). Identifying tax-induced earnings management around TRA86 as a function of prior tax-aggressive behavior. The Journal of the American Taxation Association, 20(2), 37–56.
   Google Scholar
• Matsunaga, S. R., & Park, C. W. (2001). The effect of missing a quarterly earnings Benchmark on the CEO's annual bonus. The Accounting Review, 76(3), 313–332. doi: 10.2308/accr.2001.76.3.313
   Web of Science ®Google Scholar
• Maydew, E. L. (1997). Tax-induced earnings management by firms with net operating losses. Journal of Accounting Research, 35(1), 83–96. doi: 10.2307/2491468
   Web of Science ®Google Scholar
• Mills, L. F., & Plesko, G. A. (2003). Bridging the reporting gap: A proposal for more informative reconciling of book and tax income. National Tax Journal, 56(4), 865–893. doi: 10.17310/ntj.2003.4.08
   Web of Science ®Google Scholar
• Mirrlees, J. (2011). Tax by design: The mirrlees review. Oxford: Oxford University Press.
   Google Scholar
• Modigliani, F., & Miller, M. H. (1958). The cost of capital, corporation finance and the theory of investment. The American Economic Review, 48(3), 261–297.
   Web of Science ®Google Scholar
• Nikolaev, V. V. (2015). Identifying accounting quality. Chicago Booth Research Paper(14-28).
   Google Scholar
• Panier, F., Pérez-González, F., & Villanueva, P. (2015). Capital structure and taxes: What happens when you (also) subsidize equity? Working Paper. Retrieved from https://www.bis.org/events/confresearchnetwork1603/perez_gonzalez.pdf
   Google Scholar
• Panteghini, P. M., Parisi, M. L., & Pighetti, F. (2012). Italy's ACE tax and its effect on a firm's leverage. Economics, Open Access Open Assessment E-Journal, Discussion Paper, (2012–31).
   Google Scholar
• Petersen, M. A. (2009). Estimating standard errors in finance panel data sets: Comparing approaches. The Review of Financial Studies, 22(1), 435–480. doi: 10.1093/rfs/hhn053
   Web of Science ®Google Scholar
• Princen, S. (2012). Taxes do affect corporate financing decisions: The Case of Belgian ACE. CESifo Working Paper Series No. 3713.
   Google Scholar
• Randolph, D. W., Salamon, G. L., & Seida, J. A. (2005). Quantifying the costs of intertemporal taxable income shifting: Theory and evidence from the property-casualty insurance industry. The Accounting Review, 80(1), 315–348. doi: 10.2308/accr.2005.80.1.315
   Web of Science ®Google Scholar
• Scholes, M., & Wolfson, M. A. (1992). Taxes and business strategy. Englewood Cliffs, NJ: Prentice Hall.
   Google Scholar
• Slemrod, J. (2001). A general model of the behavioral response to taxation. International Tax and Public Finance, 8(2), 119–128. doi: 10.1023/A:1011204301325
   Web of Science ®Google Scholar
• Sweeney, A. P. (1994). Debt-covenant violations and managers’ accounting responses. Journal of Accounting and Economics, 17(3), 281–308. doi: 10.1016/0165-4101(94)90030-2
   Web of Science ®Google Scholar
• Tang, T. (2014). Does book-tax conformity deter opportunistic book and tax reporting? An International Analysis. European Accounting Review, 24(3), 441–469. doi: 10.1080/09638180.2014.932297
   Web of Science ®Google Scholar
• Van Campenhout, G., & Van Caneghem, T. (2013). How did the notional interest deduction affect Belgian SMEs’ capital structure?. Small Business Economics, 40(2), 351–373. doi: 10.1007/s11187-011-9364-1
   Web of Science ®Google Scholar
• Zang, A. Y. (2012). Evidence on the trade-off between real activities manipulation and accrual-based earnings management. The Accounting Review, 87(2), 675–703. doi: 10.2308/accr-10196
   Web of Science ®Google Scholar