5.2 DISEÑO DEL HMI SCADA PARA EL CIRCUITO

In general, corporations have an incentive to use tax accounting policies to distribute their profits, and thus their tax bases, over several years in an optimal way such that the present value of tax payments is minimized. The most important instruments to do so are tax accounting options as well as reporting leeway.199 In the German tax code such legal options include depreciation and amortization schedules as well as inventory valuation.200 Leeway is not explicitly regulated, de facto resulting from vague legal terms and unclear legal situations respectively, both requiring judgement and interpretation. An example of this is the (subjective) estimation of a machine’s useful life.

Generally, tax accounting policies create a temporary advantage through tax deferral as well as a greater liquidity in early periods, but do not lead to sustainable tax savings. Over the entire life of a corporation, the tax in- and decreases will usually offset each other. The following example (Table 21) is intended to clarify the potential interest and liquidity effects in tax accounts:

A-GmbH (a German Ltd.) acquires a machine with a useful life of four years for EUR 100 k on 01/01/t1. For tax purposes, A-GmbH has the option to conduct a special

depreciation in accordance with Sec. 7g EStG in the year of acquisition (20% of the acquisition costs in addition to the regular depreciation). The uniform tax rate amounts to 50% for the entire time horizon. Excluding this record, a pre-tax profit of EUR 200 k has been recorded.

199 _{For further details see Scheffler (2013), p. 218 f. Since the German Accounting Law Modernization Act}

has entered into force in 2010, this incentive has been even further amplified, as it is possible, for the first time, to exercise tax accounting options independently from financial accounts (abolishment of the reverse authoritative principle); see Scheffler (2013), p. 228 f.

200 _{For further details see Hayn et al. (2009), p. 12 f.: According to Sec. 7 EStG, there is, for example, the}

Table 21: Example for interest and liquidity effects in tax accounts

This example demonstrates that, due to the additional special amortization of EUR 20 k in t1, the taxable profit will be reduced and the tax burden in the first period decreases by EUR 10 k (=0.5*EUR 20 k). Considering the entire useful life of the machine, the tax saving is offset by a constant increase in taxes payable of EUR 3.34 k per year from t2 through t4, due to the annual reduction in depreciation allowance of EUR 6.66 k. The taxpayer obtains, due to the greater availability of funds in the first period, a liquidity advantage of EUR 10 k. A potential interest advantage arises from the (additional) opportunity to invest this amount. However, this effect decreases with falling (market) interest rates.

The interest advantage, as highlighted above, will be lower than in the past due to the decrease in the interest rate level. Hence, temporary periodization effects lose in importance (Anzinger (2016a), p. 1767). To sum up, it can be concluded that the demonstrated means of tax accounting policy fundamentally become less relevant when interest rates are low. Thus, the outlined tax sheltering incentives (see chapter 3) become less pronounced.

The fact that periodization effects take a backseat (due to the low interest rate level) impacts in addition on the chances of success of a harmonization of the corporate tax base in the EU. Since the European Commission (EC) presented a first draft directive (DD) for a „Common (Consolidated) Corporate Tax Base (CC(C)TB)“ in 2011 (European Commission (2011)), the concept consistently reappeared on the political agenda.201 _The current discussion is mainly focused on the first step; an EU-wide harmonization of the tax base and the corresponding norms. This has also been expressed by the recently

published revised DD for a CC(C)TB (European Commission (2016e, 2016f)). Fundamentally, the proposed concept to determine taxable profits, except for several matters of detail that still need to be resolved,202 can be accepted, as it seems to be compatible with the tax systems of the member states.203 Fiscal consequences for the member states can thus be expected to be low. A current quantitative assessment of the effective tax burdens of corporations in all 28 EU-member states, using the European Tax Analyzer (ten-period-consideration), shows that the profit determination in accordance with the 2011 DD would trigger only small changes in tax burdens compared to current domestic legislations (see Figure 10: EU-wide: -0.23%, Germany: -0.38%).204 The most significant periodization differences persist with regard to depreciation allowances, inventory valuation as well as recognition and valuation of provisions.

Figure 10: Change in effective tax burden related to the introduction of the DD and isolated impact of single regulations

As these periodization differences become less important in the current low interest rate environment, the tax effects of an introduction of a CC(C)TB would be further reduced. This could in turn lead to an improved acceptance in the member states and thus to a higher political enforceability, provided that a CC(C)TB, in addition to an increase in transparency of corporate taxation in the EU, promises further advantages (Scheffler and Köstler (2014b)).

202 _{See chapter 4.1; Evers et al. (2015).}

203 _{For further details see Spengel and Zöllkau (2012).}

4.3.4 Discounting of Liabilities in Financial and Tax Accounts