Listed below are forthcoming events either hosted by the School of Accounting and Commercial Law (SACL) or the Centre for Accounting, Governance and Taxation Research (CAGTR) or the Chair in Public Finance.
CAGTR Seminar - Marta Papis, PhD student, Lund University
Date: 12 March 2014
Time: 11.00 am
Venue: Railway Station West Wing, Room 129
“Economic and commercial reality v contractual terms: what are the decisive criteria for issues of VAT/GST liability taking the example of insurance transactions?”
Presentation by Marta Papis
Doctoral candidate, Lund University, Sweden
Identifying taxable basis for services comprising risk pooling, such as insurance, is a fundamental difficulty and challenge for a comprehensive VAT/GST system. Measuring the value of the intermediation service is, however, not the only reason why simple, transaction-based, indirect tax on consumption expenditure levied at each stage of production and distribution is not well equipped to handle insurance services. VAT rules do not operate in a vacuum but relate to real life commercial transactions, which are subject to legal contracts. Insurance contracts often comprise arrangements under which a policy is taken out on account of a third party or for the benefit of a third party. These contracts often accompany other commercial transactions such as the purchase of goods or leasing services.
At this seminar, the relationship between the VAT rules, commercial reality and contractual terms in identifying the tax object, the supplier and the recipient of insurance will be illustrated by the case law of the Court of Justice of the European Union. The focus will be on legal difficulties deciding issues of VAT/GST liability caused by the complex nature of insurance transactions and their practical consequences, which tax policy makers, tax authorities, businesses and individuals should be aware of.
Further details are available here.
"A Comparison of Tax Professionals' Perception of Large and Mid-Size Business Tax Law Complexity" - Dr Stewart Karlinsky (San Jose State University)
Date: 14 March 2014
Time: 11.00 am
Tax Complexity represents one of the most insidious problems facing taxpayers. For example, the U.S. tax law and regulations contains more than 17,000 pages. The effect of this complexity has a significant cost to both taxpayers and the government by creating annual compliance costs. As the tax code becomes more complex, these cost rise as well. In addition, the complexity may distort taxpayer planning and actions. Maybe the most important cost that complexity engenders is the frequent errors by the IRS and taxpayers, and the tangentially related non-compliance (‘tax gap’) with the tax law.
Based on prior research, the impact of tax law complexity should not be overlooked. The current study concentrates on issues related to large and mid-sized businesses. We surveyed both tax directors for large corporations as well as managers and partners of international accounting and law firms to gage their perception of tax law complexity for 40 different issues. The results show that five of the top ten most complex issues involved the international tax arena. Interestingly, issues perceived as very complex in prior studies, such as Alternative Minimum Tax (AMT) and depreciation, were not found to be very complex in the context of large companies. This study also tested the differences in perceptions of two groups of participants based on both number of years in practice and whether they worked as outside consultants or within the internal tax department. There were significant differences for some of the tax issues, but for a majority of issues, there were not significant differences.
"Media Sentiment, Investor Sentiment, and Stock Price Sensitivity to Earnings" - Dr Chen Chen (University of Auckland)
Date: 28 March 2014
Time: 11.00 am
While prior research has focused on investor sentiment at the market level, we propose and test a measure of firm-specific investor sentiment. Specifically, we focus on the optimism and pessimism embedded in news items about the firm. Using data from Thomson Reuters News Analytics which uses a linguistic analysing engine to rate news items in real-time, we create a firm-specific measure of investor sentiment - i.e., media sentiment - by stripping out the portion of the news rating that is related to firm fundamentals. After controlling for market-wide investor sentiment, we find that when firm-specific media sentiment is positive (negative), investors overreact to positive (negative) earnings surprises. Further, we find that this effect is concentrated in hard to value firms and cannot be explained by information contained in our sentiment measure. Our results suggest that the tone of news items can contribute to the misvaluation of stocks, and this effect is incremental to market-wide investor sentiment.