The effect of Germany's Tax Reform Act 2001 on corporate ownership: Insights from disposals of minority blocks

Silke Rünger

No 114, arqus Discussion Papers in Quantitative Tax Research from arqus - Arbeitskreis Quantitative Steuerlehre

Abstract: The German tax reform act 2001 changed the corporate tax system from a full imputation system to a half income system. Along with this change, the taxation of equity investments changed as well. Using data on 459 disposals of minority blocks over the period 1997-2006, this paper analyzes the effect of TRA 2001 on the demand for corporate shares of different owner types and on corporate ownership concentration. We show that TRA 2001 was able to fulfill government's expectations about an increase in blocks bought by individual owners. With respect to ownership concentration, we find tax incentives not to be strong enough to lead to a reduction in overall concentration of corporate ownership.

Keywords: corporate ownership; marginal tax rate on equity; minority blocks; Germany (search for similar items in EconPapers)
JEL-codes: G11 G34 H24 H32 (search for similar items in EconPapers)
Date: 2011
New Economics Papers: this item is included in nep-acc, nep-cfn and nep-eur
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:arqudp:114

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