Tax accounting in Germany

Viac o knihe

Book-tax conformity has long been a significant issue in Germany, where the determination of taxable income has traditionally been closely linked to financial accounting. However, in recent decades, book-tax differences have increased, particularly following the German Accounting Law Modernization Act (BilMoG), which marks a shift towards greater divergence between these two accounting systems. While there is a consensus on the growing disparities, empirical research on the relationship between financial and tax accounting in Germany remains limited. Unlike international studies that have explored the reporting gap and the implications of book-tax differences for corporate behavior, German research in this area is scarce. This work aims to fill that gap by providing empirical estimates of the sources and magnitude of book-tax differences in Germany, using two unique data samples. Additionally, it questions the information content of tax-related disclosures under German GAAP and proposes reform options that not only address the German context but also engage with the broader European discussion on a Common (Consolidated) Corporate Tax Base.