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Tittel:How tax policies create unexpected results when interest rates are low : A case study of Finnish housing company debt and private investor return
Ansvar:Eelis Paukku
Forfatter:Paukku, Eelis
Materialtype:Artikkel - elektronisk
Signatur:Nordic tax journal
Utgitt:Stockholm : Nordic Tax Research Council, 2022
Omfang:13 sider
ISBN/ISSN:2246-1809
Serie:Nordic Tax Journal ; 1/2022
Emneord:Aksjeselskaper / Gjeld / Renter / Skattefradrag / Skatterett
Geografiske emneord:Finland / Norden
Note:Open access, Attribution 4.0 International (CC BY 4.0)
Utgis av Sciendo. Artikkelen er registrert Ahead of Print 14. juli 2022.
Innhold:Abstract: Finnish limited liability housing companies (LLHCs) are increasing their debt ratios quickly. In this paper, I argue that current tax rules encourage this behaviour owing to strong shareholder tax incentives for a higher debt ratio. Although tax rules are designed to be neutral, Finnish tax rules related to selling assets are profitable for LLHC shareowners in cases where debt rates are high owing to taxable profits being based not on actual acquisition costs but on presumed acquisition costs derived from the selling price. Both tax deductibility of LLHC financial charges and the presumed acquisition cost rule are from a time when interests and inflation were higher than they currently are. Both of these were used to counter the adverse effects of inflation and interest for asset owners and LLHC shareholders. Currently, when inflation and interest rates are close to zero, these rules have created an incentive for a behaviour that increases risks for the whole economy and reduces tax income.

Nøkkelord: Limited liability housing company, inflasjon
Del av verk:Nordic tax journal 1/2022

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