Social Insurance Contributions exert a liquidity constraint on firms and hence influence the performance of firms. By exploiting the enforcement of China's Social Insurance Law (SIL) in 2011 as a ...quasi-natural experiment, this paper studies the impact of social insurance contributions on the performance of enterprises through a difference-in-differences method. We find that SIL negatively affects the performance of firms, and this effect is more pronounced in firms with weaker cost-shifting capacity. Mechanism tests prove the liquidity constraints channel through the perspective of the firm's cash flow, accounts payable, investment-cash flow sensitivity, and scale of operations. Our findings demonstrate that firms cannot fully mitigate the negative impact brought by Social Insurance Contributions.
We examine the relationship between social insurance contributions and earnings management for publicly listed firms in China. Our empirical results show that the social insurance contributions ...burden significantly reduces the degree of earnings management by reducing the level of free cash flow. Additionally, the negative relation between social insurance contributions burden and earnings management is more pronounced when the internal and external social insurance pressures are high and when the firms are large non-state-owned enterprises. We also discuss the heterogeneity among firms for different financing constraints, external financing environment, regional marketization, and internal and external corporate governance. Finally, we further find that under the dual collecting system, although the social security administration is a better collecting agency, the local tax bureau acting with full responsibility is more effective than the collecting system.
This study examines the impact of Social Insurance Law in 2011 on enterprises' digital transformation, using a quasi‐natural experiment with difference‐in‐differences method. Implementation of the ...law contributes to enterprises' digital transformation. Mechanism tests reveal that implementation of the law promotes enterprise digital transformation by increasing labor costs. Heterogeneity analysis demonstrates that nonstate enterprises, enterprises with weaker financing constraints, and mature enterprises experience a more pronounced impact of the law. Enterprises in regions with highly integrated digital development and those in industries with a high level of digital transformation are more affected by the law.
Tax incentives are closely related to employees' income. The relationship between tax incentives and firm social insurance contributions is underexplored in existing literature. We construct a ...theoretical model to portray the impact of tax incentives on firm social security contributions and use China's accelerated depreciation policy for fixed assets (AD reform) to test it empirically. We find that the tax incentives effectively increase the social security contributions of firms. This effect is more pronounced in large firms, firms with high capital intensity, firms with strong bargaining power of employees, and firms with social security contributions levied by the social security department. Moreover, the AD reform promotes improvements in firm productivity and performance by increasing investment in machinery and equipment, increasing the rents shared by firms with employees, and thus indirectly boosting firms' social security contributions. Overall, Our findings contribute to a deeper understanding of rent-sharing between firms and employees, as well as enhancing our understanding of the effective incidence of taxes in less developed regions.
•We investigated how tax incentives affect firm social insurance contributions.•China's accelerated depreciation policy for fixed assets allows us to run a difference-in-differences regression.•Tax incentives have a significant and positive effect on firm social insurance contributions.•The indirect improvement effect of rent sharing between firms and employees is the channel through which tax incentives affect firm social insurance contributions.•The effect varies across firm characteristics.
The paper is devoted to the presentation of the institution of granting a permission to pay social security contribution after the deadline. The paper discusses the determinants for the application ...of this institution with reference to the present judicial trends and it indicates actual situations justifying the acceptance of the request. It also attempts at establishing the limits and determinants which should be taken into consideration by the pension institution while examining the request. Furthermore, the author deals with the need to systematise the institution itself as well as with the necessity to standardize the jurisdiction.
The publication discusses the problem of a controversial interpretation of art. 8 paragraph. 2a of the Social Security Act, requiring hospital treatment as actual beneficiaries “work” of doctors and ...nurses (midwives) on duty under civil law contracts - signed with a third party. The author analyzes the accuracy of the interpretation from the perspective of medical activity assumptions, which specificity seems to be so far marginalized in the process of applying the law. The result of the author's considerations are demands to work on the amendment of the law on social insurance system taking into account the specific conditions of the exercise of the medical profession.
This article is a preface to a special issue of Financial Theory and Practice, which is devoted to the comparison of tax wedge on labour income in Croatia and other EU countries. The articles in this ...issue have arisen from the students' research project, undertaken in 2015. This Preface outlines the motivation behind the research project, explains the most important methodological issues, and reviews the literature on the measurement of tax wedge in Croatia.
Civil law contracts concluded by two parties have consequences not only in the private law but also in the public law, mainly tax law and social insurance law. In the case of specific-task contracts ...there can be observed a pro-fiscal approach of the Social Insurance Institution (ZUS), which wrongly claims that some of the specific-task contracts are in fact contract of services and the income should be subjected to social insurance contributions.
Author of the study attempts to show the area of protection of Polish public finances before the violations in discipline of the public finance in the area of social insurance contributions paid by ...the public sector unit. The analysis of subjective and objective scope of the act specified in Art. 14 of the Act of 17th December 2004 on the liability for violation of public finance discipline, in line with the course of the discussion on the advisability of establishing obligations under that provision. The author analyzes the legal status on 24th June 2014, using not only the basic acts of financial law, but also referring to the doctrine and judicature, which refer factually to the subject of this study. Main aim of the study is to show the complexity of the issue that is analyzed and the diversities of factors that determine the punishment or the withdrawal objection of committing an act of Art. 14 point 1 of the above-mentioned the Act.
It is permissible to use reliefs in the payment of social security contributions, based either on a definitive waiver by the creditor of the whole or relevant part of the amount due (partial or ...complete remission) or only a temporary waiver of such amounts (payment deferral or payment in installments). The use of such reliefs is possible upon the occurrence of conditions laid down in the Act, for example, in the case of total non-recovery of contributions, for economic or other reasons worth considering, if justified by important interests of the person concerned. The prerequisites mentioned above have a nature of general clauses, allowing for their flexible adjustment to specific situations. Entities authorized to grant reliefs in the payment of social security contributions act within the limits of administrative discretion. But it is not a fully free operation, because the economic impact resulting from the use of such reliefs has a direct impact on the financial balance of earmarked funds which finance social security benefits, in particular pensions, disability allowances and other benefits.
PDF
