This class is the first out of five courses of the specialization in “Accounting and Taxation” in the Bachelor Program “Business and Economics”. The course introduces students to i) principles of business taxation and ii) decision-making under the influence of taxes. Overall, the course consists of five units.

Unit 1: Tax Facts

• Definition and Purpose of Taxes
• Tax Structure and Country-level Trends in Taxation
• Tax Burden across Countries

Unit 2: Income Taxes

• Personal Income Tax Systems
• Corporate Income Tax Systems
• Taxation of Capital Income

Unit 3: Principles of Business Taxation

• Taxation of Different Legal Forms
  • Sole Proprietorships
  • Partnerships
  • Corporations
• Determination of the Tax Base for Business Income
• Measuring the Tax Burden of Businesses

Unit 4: Principles of Decision-Making

• Decision-Making in the Absence of Taxes
• Taxes and Investment Decisions
  • The “Standard Model”
  • The “Standard Model” for Corporations
  • Extensions of the “Standard Model”
• Taxes and Legal Form Choices
• Taxes and Financing Decisions

Unit 5: Decision-Neutral Tax Systems

• Cash Flow Tax
• Allowance for Corporate Equity (ACE) Tax
• Johansson/Samuelson Tax

After completing this course, students have the following competences:

• Understand the purpose of taxation and country-level trends in taxation.
• Know the key differences between existing tax systems and critically reflect on the approaches to tax income in general and business income in particular.
• Understand different approaches to business/corporate taxation and know the underlying key principles.
• Critically reflect on the role of financial accounting for determining the tax base of businesses.
• Use an economic framework to integrate taxes into key business decisions, isolate their economic effects, and understand the associated economic implications. The framework can be used to evaluate the following decisions:
• investment decisions
• payout decisions
• legal form choices
• financing decisions
• Apply the framework to evaluate tax-policy proposals and identify potential economic consequences for businesses.
• Understand the current approach to tax business income and critically reflect on alternative forms of taxation, such as decision-neutral tax systems.

Students are required to attend at least seven out of nine content sessions. Students can miss two sessions without a reason for absence. If a student misses more than two sessions, a successful completion of the course is no longer possible.

The class consists of nine content sessions. The sessions last two hours each and cover the five units of the course. The teaching format is a combination of lecturing by the instructor, in-classroom discussions, and the application of key concepts in the form case studies and practical examples.

The lecture part provides theoretical insights and highlights key theoretical aspects of the topics covered. This part should familiarize students with key concepts and introduce them to relevant terminology. During the lecture part, the instructor raises questions to stimulate in-classroom discussion and refers to recent developments and tax-policy proposals. The instructor also refers to key findings from academic research and draws connections to the topics covered in class.

During the practical part, students work on case studies and real-life examples under the guidance of the instructor. The application of theoretical concepts to real-life problems should help students solidify the content in a practically oriented manner. Moreover, the examples should enable students to assess and understand recent policy proposals and their economic implications. In addition, this part of the course prepares students for the group assignment, which requires the practical application of key concepts learned in class.

Because preparation and active participation are crucial to successfully complete the course and to have a high-quality learning experience, students are expected to come to class prepared. Prior to each content session, the instructor therefore provides preparation material, which includes textbook chapters, recent newspaper articles, and/or small examples. The newspaper articles should underline the relevance of the topics covered in class and provide a basis for critical and fruitful discussions.

The material will be made available via Canvas prior to each content session.

The individual components for the grades are weighted as follows:

• 20% Preparation and Participation
• 15% Quizzes
• 20% Group Project
• 15% Midterm Exam
• 30% Final Exam

Preparation and Participation: Students’ pre-class preparation and in-class participation are evaluated. Prior to each class session, students must answer preparation questions and/or solve small problems based on the preparation material. Students must upload their answers prior to class via Canvas. In class, students are asked to participate actively. In both cases, quality and quantity of preparation / participation are evaluated.

Quizzes: After each class session, students must complete an online quiz. The quizzes should ensure a consistent learning progress and are administered via Canvas.

Group Project: Students should research tax information for a particular country (to be chosen by the students), use this information to evaluate a business decision, and summarize the key findings in a short report. The group size depends on the number of students enrolled in the class. The assignment is due on December 20, 2023 and should be handed in via email. The quality of the analysis and the written report are evaluated.

Midterm Exam: The midterm exam covers the first part of the course (Units 1-3). The exam consists of theory-based questions and problem-centred open questions. The exam takes place on November 3, 2023.

Final Exam: The final exam convers the entire content of the class. The final exam consists of theory-based questions and problem-centred open questions. The exam takes place on December 15, 2023. No retake will be offered.

Grading:

87.5% or more: 1 (excellent)

75% or more: 2 (good)

62.5% or more: 3 (satisfactory)

50.5% or more: 4 (sufficient)

50% or less: 5 (fail)

Successful completion of the admission procedure to the specialization in "Accounting and Taxation".

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Successful completion of the course „Financial Reporting and Analysis”

Office hours, schedule via e-mail!

For more information on the specialization, please see: https://www.wu.ac.at/fileadmin/wu/d/i/steuerlehre/Aktuelles/Acc_Tax_2020.pdf