The effect of Germany's repeal of the corporate capital gains tax: Evidence from the disposal of corporate minority holdings

Arbeitspapier

Germany's repeal of the corporate capital gains tax for the disposal of domestic holdings was expected to substantially change the system of corporate network holdings and corporate control. Based on a general divestiture model, we show that the probability of a disposal increased after the tax reform. Using a unique data set with no need to proxy for the disposal of corporate equity holdings, we analyze 354 German minority holdings over the period 1999-2007. We find significant higher disposal rates for 2002, the year the reform became effective. Further analyses reveal that this effect can be attributed to non-listed parent companies outside the financial sector, i.e. companies mainly ignored in prior research. Thus, our results also help to explain why prior research using event studies failed to detect a widespread market reaction of German firms.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: arqus Discussion Paper ; No. 126

Classification and Topics

• Classification: Wirtschaft ; Portfolio Choice; Investment Decisions ; Mergers; Acquisitions; Restructuring; Voting; Proxy Contests; Corporate Governance ; Business Taxes and Subsidies including sales and value-added (VAT) ; Fiscal Policies and Behavior of Economic Agents: Firm
• Subject: corporate capital gains ; lock-in effect ; corporate equity holdings ; Germany ; Körperschaftsteuer ; Wertzuwachssteuer ; Steuerreform ; Steuerwirkung ; Multinationales Unternehmen ; Kapitalbeteiligung ; Eigentümerstruktur ; Corporate Governance ; Deutschland

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Rünger, Silke
• Event: Veröffentlichung
• (who): Arbeitskreis Quantitative Steuerlehre (arqus)
• (where): Berlin
• (when): 2012

Further information

• Handle: http://hdl.handle.net/10419/55849
• Last update: 10.03.2025, 11:41 AM CET