The empirical literature specifically addressing the differences between financial and tax accounting (reporting gap) in Germany is rather small. This is probably explained by the difficulty of obtaining reliable data. Tax returns are not publicly available and book-tax differences have been disclosed to only very little extent on the firms’ financial statements based on national German GAAP. Against this background, the main objective of this paper is to examine the magnitude of book-tax differences in Germany in great detail. We use a unique dataset of tax returns to examine the reporting gap and explain sources of differences between book and taxable income. Doing so we are able to extend prior research and provide valuable information for investors and analysts as well as academics that must rely on financial statement information when estimating firm’s taxable positions.

Project duration

01.08.2011 - 31.07.2012

Project members

Prof. Dr. Christoph Spengel (Coordinator)
Benedikt Zinn (Coordinator)