Arbeitspapier
Do tax loss restrictions distort venture capital funding of start-ups?
Anti-tax loss trafficking rules disallow the use of loss carryforwards after a change in ownership or activity (such as significant changes in turnover, employment, or the product portfolio). This restriction could threaten accumulated loss carryforwards of start-ups. Accounting for the increased risk and reduced return on their investment, VC investors could reduce their funding. I analyze whether the venture capital (VC) funding of start-ups in Europe is affected by these regulations. I base my empirical analysis on several case studies and a panel analysis covering VC- funded companies in the EU28 Member States from 1999 to 2014. My findings suggest that strict anti-tax loss trafficking rules indeed impair VC funding. Especially more mature companies and companies in high-tech industries are affected.
- Language
-
Englisch
- Bibliographic citation
-
Series: ZEW Discussion Papers ; No. 21-008
- Classification
-
Wirtschaft
New Firms; Startups
Investment Banking; Venture Capital; Brokerage; Ratings and Ratings Agencies
Business Taxes and Subsidies including sales and value-added (VAT)
- Subject
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Venture capital
taxes
loss carryforward
start-ups
anti-tax loss trafficking
- Event
-
Geistige Schöpfung
- (who)
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Bührle, Anna Theresa
- Event
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Veröffentlichung
- (who)
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ZEW - Leibniz-Zentrum für Europäische Wirtschaftsforschung
- (where)
-
Mannheim
- (when)
-
2021
- Handle
- Last update
-
10.03.2025, 11:44 AM CET
Data provider
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Arbeitspapier
Associated
- Bührle, Anna Theresa
- ZEW - Leibniz-Zentrum für Europäische Wirtschaftsforschung
Time of origin
- 2021
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