Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/231412
Authors: 
Asatryan, Zareh
Joulfaian, David
Year of Publication: 
2021
Series/Report no.: 
ZEW Discussion Papers No. 21-022
Abstract: 
The majority of countries around the world provide tax incentives for business philanthropy. However, little is known about the responsiveness of businesses to this tax treatment. This paper expands on this scant literature by focusing on the Armenian tax system which provides incentives for business philanthropy. The support takes the form of a deduction capped at a fraction of business receipts. This generates a kink beyond which the marginal tax subsidy drops to zero. Using administrative panel data for the years 2007 through 2017, we find strong evidence of bunching by Armenian firms at the kink, with a sizeable tax elasticity of giving at the intensive margin. The evidence on bunching is robust to whether firms have been audited, and to whether any tax deficiencies are observed. This suggests that the observed response is likely to be real rather than being driven by reporting responses.
Subjects: 
Business philanthropy
charitable giving
corporate income taxes
firm behavior
bunching
tax-price elasticity
JEL: 
H25
H32
M14
Document Type: 
Working Paper

Files in This Item:
File
Size
527.96 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.