No. 76: The big short (interest): Closing the loopholes in the dividend-withholding tax

Jahr: 2023

Typ: Working Paper

Open Science:

Bronze

Abstract

We study the effect of stricter enforcement of the dividend-withholding tax (DWT). We focus on a 2016 Danish reform and compare Denmark to its Nordic neighbors. Before the reform, all countries have strong spikes in stocks on loan centered around the ex-dividend day, consistent with the most popular DWT arbitrage transactions. Post-reform, the spikes in Denmark disappear. We find that stricter enforcement resulted in approx. 1.3 bln USD in annual DWT revenue (130 % of pre-reform revenue) with no effect on cost of capital and dividend policy. We find similar results in reforms across Europe.

Veröffentlichungsinformationen

TRR 266 researchers

Elisa Casi-Eberhard Norwegian School of Economics

External researchers

Evelina Gavrilova

David Murphy

Floris Zoutman

DOI

DOI Link

Open Science

To cite this article

Casi-Eberhard, E., Gavrilova, E., Murphy, D., & Zoutman, F. (2023). The big short (interest): Closing the  loopholes in the dividend-withholding tax. TRR 266 Accounting for Transparency Working Paper Series No. 76. https://dx.doi.org/10.2139/ssrn.4039744

Zugehörige Projekte

B07

Costs and Benefits of Tax Transparency

+ 10

Beteiligte Institutionen

Die Hauptstandorte vom TRR 266 sind die Universität Paderborn (Sprecherhochschule), die HU Berlin und die Universität Mannheim. Alle drei Standorte sind seit vielen Jahren Zentren für Rechnungswesen- und Steuerforschung. Hinzu kommen Wissenschaftler der LMU München, der Frankfurt School of Finance and Management, der Goethe-Universität Frankfurt, der Universität zu Köln und der Leibniz Universität Hannover, die die gleiche Forschungsagenda verfolgen.