Tax morale and conditional cooperation

Why so many people pay their taxes, even though fines and audit probability are low, is a central question in the tax compliance literature. Positing a homo oeconomicus having a refined motivation structure sheds light on this puzzle. This paper provides empirical evidence for the relevance of conditional cooperation, using survey data from 30 West and East European countries. We find a high correlation between perceived tax evasion and tax morale. The results remain robust after exploiting endogeneity and conducting several robustness tests. We also observe a strong positive correlation between institutional quality and tax mmorale. Keywords: Tax morale; Tax compliance; Tax evasion; Pro-social behavior; Institutions

On inequality tax evasion and progressive taxes

This paper proposes a simple variation of the Allingham and Sandmo (1972) construct and integrates it to a dynamic general equilibrium framework with heterogeneous agents. We study an overlapping generations framework i n which agents must initially decide whether to evade taxes or not. In the event they decide to evade, they then have to decide the extent of income or wealth they wish to under-report. We find that in comparison with the basic approach, the ‘evade or not’ choice drastically reduced the extent of evasion in the economy. This outcome is the result of an anomaly intrinsic to the basic Allingham and Sandmo version of the model, which makes the evade-or-not extension a more suitable approach to modelling the issue. We also find that the basic model, and the model with and ‘evade-or-not’ choice have strikingly different political economy implications, , which suggest fruitful avenues of empirical research.

Tax concessions for charities : competitive neutrality, the tax base and "public goods" choice

It is argued that concerns arise about the integrity and fairness of the taxation regime where charitable organizations, which avail themselves of the tax exemption status while undertaking commercial activities, compete directly with the for-profit sector. The appropriateness of the tax concessions granted to charitable organizations is considered in respect of income derived from commercial activities. It is principally argued that the traditional line of reasoning for imposing limitations on tax concessions focuses on an incorrect underlying inquiry. Traditionally, it is argued that limitations should be imposed because of unfair competition, lack of competitive neutrality, or an arbitrary decision relating to a lack of deserving. However, it is argued that a more appropriate question from which to base any limitations is one which considers the value attached to the integrity of the taxation regime as a whole, and the tax base specifically compared to the public good of charities. When the correct underlying question is asked, sound taxation policy ensues, as a less arbitrary approach may be adopted to limit the scope of tax concessions available to charitable organizations.

Advance pricing arrangements : an Australian Tax Office success or a legislative failure?

Australia’s domestic income tax legislation and double tax agreements contain transfer pricing rules which are designed to counter the underpayment of tax by businesses engaged in international dealings between related parties. The current legislation and agreements require that related party transactions take place at a value which reflects an arm’s length price, that is, a price which would be charged between unrelated parties. For a host of reasons, it is increasingly difficult for multinational entities to demonstrate that they are transferring goods and services at a price which is reflective of the behaviour of independent parties, thereby making it difficult to demonstrate compliance with the relevant legislation. Further, where an Australian business undertakes cross-border related party transactions there is the risk of an audit by the Australian Tax Office (ATO). If a business wishes to avoid the risk of an audit, and any ensuing penalties, there is one option: an advance pricing arrangement (APA). An APA is an agreement whereby the future transfer pricing methodology to be used to determine the arm’s length price is agreed to by the taxpayer and the relevant tax authority or authorities. The ATO views the APA process as an important part of its international tax strategy and believes that there are complementary benefits provided to both the taxpayer and the ATO. The ATO promotes the APA process on the basis of creating greater certainty for all parties while reducing compliance costs and the risk of audit and penalty. While the ATO regards the APA system as a success, it may be argued that the implementation of such a system is simply a practical solution to an ongoing problem of an inherent failure in both the legislation and ATO interpretation and application of this legislation to provide certainty to the taxpayer. This paper investigates the use of APAs as a solution to the problem of transfer pricing and considers whether they are the success the ATO claims. It is argued that there is no doubt that APAs provide a valuable practical tool for multinational entities facing the challenges of the taxation of global trading under the current transfer pricing regime. It does not, however, provide a long term solution. Rather, the long term solution may be in the form of legislative amendment.

Double tax agreements and the international allocation of business income in Australia

Increasingly, the effectiveness of the present system of taxation of international businesses is being questioned. The problem associated with the taxation of such businesses is twofold. A system of international taxation must be a fair and equitable system, distributing profits between the relevant jurisdictions and, in doing so, avoiding double taxation. At the same time, the prevention of fiscal evasion must be secured. In an attempt to achieve a fair and equitable system Australia adopts unilateral, bilateral and multilateral measures to avoid double taxation and restrict the avoidance of tax. The first step in ascertaining the international allocation of business income is to consider the taxation of business income according to domestic law, that is, the unilateral measures. The treatment of international business income under the Australian domestic law, that is, the Income Tax Assessment Act 1936 (Cth) and Income Tax Assessment Act 1997 (Cth), will depend on two concepts, first, whether the taxpayer is a resident of Australia and secondly, whether the income is sourced in Australia. After the taxation of business profits has been determined according to domestic law it is necessary to consider the applicability of the bilateral measures, that is, the Double Tax Agreements (DTAs) to which Australia is a party, as the DTAs will override the domestic law where there is any conflict. Australia is a party to 40 DTAs with another seven presently being negotiated. The preamble to Australia's DTAs provides that the purpose of such agreements is 'to conclude an Agreement for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income'. Both purposes, for different reasons, are equally important. It has been said that: The taxpayer hopes the treaty will prevent the double taxation of his income; the tax gatherer hopes the treaty will prevent fiscal evasion; and the politician just hopes. The first purpose, the avoidance of double taxation, is achieved through the provision of rules whereby the Contracting States agree to the classification of income and the allocation of that income to a particular State. In this sense DTAs do not allocate jurisdiction to tax but rather provide an arrangement whereby the States agree to restrict their substantive law. The restriction is either through the non-taxing of the income or via the provision of a tax credit.

Reusable surface confined semi-conducting metal-TCNQ and metal-TCNQF4 catalysts for electron transfer reactions

The synthesis of organic semiconducting materials based on silver and copper-TCNQ (TCNQ = 7,7,8,8-tetracyanoquinodimethane) and their fluorinated analogues has received a significant amount of attention due to their potential use in organic electronic applications. However, there is a scarcity in the identification of different applications for which these interesting materials may be suitable candidates. In this work, we address this by investigating the catalytic properties of such materials for the electron transfer reaction between ferricyanide and thiosulphate ions in aqueous solution, which to date has been almost solely limited to metallic nanomaterials. Significantly it was found that all the materials investigated, namely CuTCNQ, AgTCNQ, CuTCNQF4 and AgTCNQF4, were catalytically active and, interestingly, the fluorinated analogues were superior. AgTCNQF4 demonstrated the highest activity and was tested for its stability and re-usability for up to 50 cycles without degradation in performance. The catalytic reaction was monitored via UV-vis spectroscopy and open circuit potential versus time measurements, as well as an investigation of the transport properties of the films via electrochemical impedance spectroscopy. It is suggested that morphology and bulk conductivity are not the limiting factors, but rather the balance between the accumulated surface charge from electron injection via thiosulphate ions on the catalyst surface and transfer to the ferricyanide ions which controls the reaction rate. The facile fabrication of re-usable surface confined organic materials that are catalytically active may have important uses for many more electron transfer reactions.

A nation’s role in addressing base erosion and profit shifting : balancing sovereignty with international collaboration and coordination

The notion of sovereignty is central to any international tax issue. While a nation is free to design its tax laws as it sees fit and raise revenue in accordance with the needs of its citizens, it is not possible to undertake such a task in isolation. In a world of cross-border investments and business transactions, all tax regimes impact on one another. Tax interactions between sovereign states cannot be avoided. Ultimately, the interactions mean that a nation must decide whether to engage in both collaboration and coordination with other nations and supranational bodies alike or maintain an individualised stance in relation to its tax policy. Whatever the decision, there is arguably an exercise in national sovereignty in some form. In the context of an international tax regime, whether that regime is interpreted broadly as meaning international norms generally adopted by nations around the world or domestic regimes legislating for cross-border transactions, rhetoric around national fiscal sovereignty takes on many different forms. At one end of the spectrum it is relied upon by financial secrecy jurisdictions (tax havens) as a defence to their position on the basis that ‘other’ nations cannot interfere with the fiscal sovereignty of a jurisdiction. At the other end of the spectrum, it is argued that profit shifting and international tax avoidance if not stopped is, in and of itself, a threat to a nation’s fiscal sovereignty on the basis that it threatens the ability to tax and raise the revenue needed. This paper considers a modern conceptualisation of sovereignty along with its role within international tax coordination and collaboration to argue that a move towards a more unified approach to addressing international base erosion and profit shifting may be the ultimate exercise of national fiscal sovereignty. By using the current transfer pricing regime as a case study, this paper posits that it is not merely enough to have international agreement on allocation rules to be applied, but that the ultimate exercise of national sovereignty is political agreement with other states to ensure that it is governments which determine the allocational basis of worldwide profits to be taxed. In doing so, it is demonstrated that the arm’s length pricing requirement of the current transfer pricing regime, rather than providing governments with the ability to determine the location of profits, is providing multinational entities with the ultimate power to determine that location. If left unchecked, this will eventually erode a nation’s ability to capture the required tax revenue and, as a consequence, may be deemed a failure by nation states to exercise their fiscal sovereignty.

Effect Of Directionality Of Grinding Marks On Friction And Formation Of Transfer Layer

Surface texture influences friction and transfer layer formation during sliding. In the present investigation, basic studies were conducted using inclined pin-on-plate sliding tester to understand the effect of directionality of surface grinding marks of hard material on friction and transfer layer formation during sliding against soft materials. 080 M40 steel plates were ground to attain different surface roughness with unidirectional grinding marks. Then pins made of soft materials such as pure Al, pure Mg and Al-Mg alloy were slid against the prepared steel plates. Grinding angle (i.e., the angle between direction of sliding and grinding marks) was varied between 0 degrees and 90 degrees in the tests. Experiments were conducted under both dry and lubricated conditions on each plate in ambient environment. It was observed that the transfer layer formation and the coefficient of friction, which has two components adhesion and plowing - depend primarily on the directionality of grinding marks of the harder mating surface, and independent of surface roughness of the harder mating surface. For the case of pure Mg, stick-slip phenomenon was observed under dry condition for all grinding angles and it was absent upto 20 degrees grinding angles under lubricated condition. However, for the case of Al, it was observed only under lubricated conditions for angles exceeding 20 degrees. As regards the alloy, namely, Al-Mg alloy, it, was absent in both conditions. For the case of pure Mg and Al, it was observed that the amplitude of stick-slip motion primarily depends on plowing component of friction. The grinding angle effect on coefficient of friction was attributed to the variation of plowing component of friction with grinding angle.

Studies On Friction And Formation Of Transfer Layer In Hcp Metals

Surface texture plays an important role in the frictional behavior and transfer layer formation of contacting surfaces. In the present investigation, basic experiments were conducted using an inclined pin-on-plate sliding apparatus to better understand the role of surface texture on the coefficient of friction and the formation of a transfer layer. In the experiments, soft HCP materials such as pure Mg and pure Zn were used for the pins and a hardened 080 M40 steel was used for the plate. Two surface parameters of the steel plates—roughness and texture—were varied in tests that were conducted at a sliding speed of 2 mm/s in ambient conditions under both dry and lubricated conditions. The morphologies of the worn surfaces of the pins and the formation of the transfer layer on the counter surfaces were observed using a scanning electron microscope. In the experiments, the occurrence of stick-slip motion, the formation of a transfer layer, and the value of friction were recorded. With respect to the friction, both adhesion and plowing components were analyzed. Based on the experimental results, the effect of surface texture on the friction was attributed to differences in the amount of plowing. Both the plowing component of friction and the amplitude of stick-slip motion were determined to increase surface textures that promote plane strain conditions and decrease the textures that favor plane stress conditions.

Phosphine resistance in Sitophilus oryzae (L.) from eastern Australia: Inheritance, fitness and prevalence

The inheritance and fitness of phosphine resistance was investigated in an Australian strain of the rice weevil, Sitophilus oryzae (L.), as well as its prevalence in eastern Australia. This type of knowledge may provide insights in to the development of phosphine resistance in this species with the potential for better management. This strain was 12.2 × resistant at the LC50 level based on results for adults exposed for 20 h. Data from the testing of F1 adults from the reciprocal crosses (R♀ × S♂ and S♀ × R♂) showed that resistance was autosomal and inherited as an incompletely recessive trait with a degree of dominance of -0.88. The dose-response data for the F1 × S and F1 × R test crosses, and the F2 progeny were compared with predicted dose-response assuming monogenic recessive inheritance, and the results were consistent with resistance being conferred by one major gene. There was no evidence of fitness cost based on the frequency of susceptible phenotypes in hybridized populations that were reared for seven generations without exposure to phosphine. Lack of fitness cost suggests that resistant alleles will tend to persist in field populations that have undergone selection even if selection pressure is removed. Discriminating dose tests on 107 population samples collected from farms from 2006 to 2010 show that populations containing insects with the weak resistant phenotype are common in eastern Australia, although the frequency of resistant phenotypes within samples was typically low. The prevalence of resistance is a warning that this species has been subject to considerable selection pressure and that effective resistance management practices are needed to address this problem. Crown Copyright © 2014.

Electron and proton transfer in NADH:ubiquinone oxidoreductase (Complex I) from Escherichia coli

Cells of every living organism on our planet − bacterium, plant or animal − are organized in such a way that despite differences in structure and function they utilize the same metabolic energy represented by electrochemical proton gradient across a membrane. This gradient of protons is generated by the series of membrane bound multisubunit proteins, Complex I, II, III and IV, organized in so-called respiratory or electron transport chain. In the eukaryotic cell it locates in the inner mitochondrial membrane while in the bacterial cell it locates in the cytoplasmic membrane. The function of the respiratory chain is to accept electrons from NADH and ubiquinol and transfer them to oxygen resulting in the formation of water. The free energy released upon these redox reactions is converted by respiratory enzymes into an electrochemical proton gradient, which is used for synthesis of ATP as well as for many other energy dependent processes. This thesis is focused on studies of the first member of the respiratory chain − NADH:ubiquinone oxidoreductase or Complex I. This enzyme has a boot-shape structure with hydrophilic and hydrophobic domains, the former of which has all redox groups of the protein, the flavin and eight to nine iron-sulfur clusters. Complex I serves as a proton pump coupling transfer of two electrons from NADH to ubiquinone to the translocation of four protons across the membrane. So far the mechanism of energy transduction by Complex I is unknown. In the present study we applied a set of different methods to study the electron and proton transfer reactions in Complex I from Escherichia coli. The main achievement was the experiment that showed that the electron transfer through the hydrophilic domain of Complex I is unlikely to be coupled to proton transfer directly or to conformational changes in the protein. In this work for the first time properties of all redox centers of Complex I were characterized in the intact purified bacterial enzyme. We also probed the role of several conserved amino acid residues in the electron transfer of Complex I. Finally, we found that highly conserved amino acid residues in several membrane subunits form a common pattern with a very prominent feature – the presence of a few lysines within the membrane. Based on the experimental data, we suggested a tentative principle which may govern the redox-coupled proton pumping in Complex I.

Taxes and decision rights in multinationals

We examine how a multinational's choice to centralize or decentralize its decision structure is affected by country tax differentials. Within a simple model that emphasizes the multiple conflicting roles of transfer prices in multinational enterprises (MNEs)—here, as a strategic precommitment device and a tax manipulation instrument—we show that centralization is more profitable when tax differentials are large. When tax differentials are small, decentralization can be performed in two different ways each providing the highest profits in a particular range of the tax differential. Hence, the paper emphasizes the organizational flexibility that MNEs have in pursuing tax optimization.

Not in their genes: phenotypic flexibility, behavioural traditions and cultural evolution in wild bonnet macaques

Phenotypic flexibility, or the within-genotype, context-dependent, variation in behaviour expressed by single reproductively mature individuals during their lifetimes, often impart a selective advantage to organisms and profoundly influence their survival and reproduction. Another phenomenon apparently not under direct genetic control is behavioural inheritance whereby higher animals are able to acquire information from the behaviour of others by social learning, and, through their own modified behaviour, transmit such information between individuals and across generations. Behavioural information transfer of this nature thus represents another form of inheritance that operates in many animals in tandem with the more basic genetic system. This paper examines the impact that phenotypic flexibility, behavioural inheritance and socially transmitted cultural traditions may have in shaping the structure and dynamics of a primate society--that of the bonnet macaque (Macaca radiata), a primate species endemic to peninsular India. Three principal issues are considered: the role of phenotypic flexibility in shaping social behaviour, the occurrence of individual behavioural traits leading to the establishment of social traditions, and the appearance of cultural evolution amidst such social traditions. Although more prolonged observations are required, these initial findings suggest that phenotypic plasticity, behavioural inheritance and cultural traditions may be much more widespread among primates than have previously been assumed but may have escaped attention due to a preoccupation with genetic inheritance in zoological thinking.

Relationship Between The Impedance Matrix And The Transfer Matrix With Specific Reference To Symmetrical, Reciprocal And Conservative Systems

Impedance matrix and transfer matrix methods are often used in the analysis of linear dynamical systems. In this paper, general relationships between these matrices are derived. The properties of the impedance matrix and the transfer matrix of symmetrical systems, reciprocal systems and conservative systems are investigated. In the process, the following observations are made: (a) symmetrical systems are not a subset of reciprocal systems, as is often misunderstood; (b) the cascading of reciprocal systems again results in a reciprocal system, whereas cascading of symmetrical systems does not necessarily result in a symmetrical system; (c) the determinant of the transfer matrix, being ±1, is a property of both symmetrical systems and reciprocal systems, but this condition, however, is not sufficient to establish either the reciprocity or the symmetry of the system; (d) the impedance matrix of a conservative system is skew-Hermitian.

Molecular Antennas and Photoactive Nanomaterials based on Energy Transfer Processes

110 p.