Arbeitspapier
Interest barrier and capital structure response
The Organisation for Economic Co-Operation and Development (OECD) recently proposed an interest barrier to fight tax base erosion and profit shifting (BEPS). We use the introduction of such an interest deductibility restriction in Germany as a quasi-experiment and find significant corporate capital structure responses. Using single entity financial statements and a detailed matching approach, we find evidence that companies that are affected by the interest barrier reduce their leverage by 4.7 percentage points more than non-affected companies. The effects are stronger among non-financially constrained firms. Our results imply that interest barrier effects on capital structure have so far been heavily underestimated.
- Language
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Englisch
- Bibliographic citation
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Series: arqus Discussion Paper ; No. 206
- Classification
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Wirtschaft
International Lending and Debt Problems
Taxation and Subsidies: Efficiency; Optimal Taxation
Personal Income and Other Nonbusiness Taxes and Subsidies; includes inheritance and gift taxes
- Subject
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financing decisions
German tax reform
interest barrier
leverage
- Event
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Geistige Schöpfung
- (who)
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Alberternst, Stephan
Sureth-Sloane, Caren
- Event
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Veröffentlichung
- (who)
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Arbeitskreis Quantitative Steuerlehre (arqus)
- (where)
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Berlin
- (when)
-
2016
- 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
- Alberternst, Stephan
- Sureth-Sloane, Caren
- Arbeitskreis Quantitative Steuerlehre (arqus)
Time of origin
- 2016
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