scholarly journals Does Information Asymmetry Affect Corporate Tax Aggressiveness?

2017 ◽  
Vol 52 (5) ◽  
pp. 2053-2081 ◽  
Author(s):  
Tao Chen ◽  
Chen Lin
Keyword(s):  
Information Asymmetry ◽  
Tax Avoidance ◽  
Tax Planning ◽  
Corporate Tax ◽  
Difference In Differences ◽  
Analyst Coverage ◽  
Tax Aggressiveness ◽  
Tax Haven ◽  
Matching Estimator ◽  
Planning Capacity

We investigate the effect of information asymmetry on corporate tax avoidance. Using a difference-in-differences matching estimator to assess the effects of changes in analyst coverage caused by broker closures and mergers, we find that firms avoid tax more aggressively after a reduction in analyst coverage. We further find that this effect is mainly driven by firms with higher existing tax-planning capacity (e.g., tax-haven presence), smaller initial analyst coverage, and a smaller number of peer firms. Moreover, the effect is more pronounced in industries where reputation matters more and in firms subject to less monitoring from tax authorities.

Brewing Up Controversy: A Case Exploring the Ethics of Corporate Tax Planning

2015 ◽  
Vol 30 (4) ◽  
pp. 311-327 ◽  
Author(s):  
Megan F. Hess ◽  
Raquel Meyer Alexander
Keyword(s):  
Real World ◽  
Ethical Issues ◽  
Tax Avoidance ◽  
Tax Planning ◽  
Learning Assessment ◽  
Class Discussion ◽  
Corporate Tax ◽  
Tax Havens ◽  
Multinational Organizations ◽  
The U.S

ABSTRACT This instructional case explores the ethical issues surrounding the corporate tax-planning and tax-avoidance strategies of multinational organizations. Drawing on the real-world experiences of SABMiller, one of the world's largest beverage companies, this case provides a launching point for students to consider the ethics of corporate tax planning. The ethics of multinational tax practices, especially the use of tax havens, has recently become the focus of media and legislative debate in both the U.S. and the U.K., and many well-respected companies, such as General Electric, Apple Inc., and Starbucks are now feeling the pressure to reform. In a post-case learning assessment, students demonstrated significant improvement in their understanding and indicated that they enjoyed discussing this controversial issue. The “Implementation Guidance” section and Teaching Notes offer guidance for in-class discussion of the ethical and tax issues in this case.

Women on the board of directors and corporate tax aggressiveness in Australia

2016 ◽  
Vol 29 (3) ◽  
pp. 313-331 ◽  
Author(s):  
Grant Richardson ◽  
Grantley Taylor ◽  
Roman Lanis
Keyword(s):  
Board Of Directors ◽  
Selection Bias ◽  
Tax Avoidance ◽  
Multivariate Regression Analysis ◽  
Corporate Tax ◽  
Content Type ◽  
Tax Aggressiveness ◽  
Self Selection ◽  
The Board Of Directors ◽  
The Impact

Purpose This paper aims to investigate the impact of women on the board of directors on corporate tax avoidance in Australia. Design/methodology/approach The authors use multivariate regression analysis to test the association between the presence of female directors on the board and tax aggressiveness. They also test for self-selection bias in the regression model by using the two-stage Heckman procedure. Findings This paper finds that relative to there being one female board member, high (i.e. greater than one member) female presence on the board of directors reduces the likelihood of tax aggressiveness. The results are robust after controlling for self-selection bias and using several alternative measures of tax aggressiveness. Research limitations/implications This study extends the extant literature on corporate governance and tax aggressiveness. This study is subject to several caveats. First, the sample is restricted to publicly listed Australian firms. Second, this study only examines the issue of women on the board of directors and tax aggressiveness in the context of Australia. Practical implications This research is timely, as there has been increased pressure by government bodies in Australia and globally to develop policies to increase female representation on the board of directors. Originality/value This study is the first to provide empirical evidence concerning the association between the presence of women on the board of directors and tax aggressiveness.

scholarly journals The impact of corporate tax avoidance on analyst coverage and forecasts

2019 ◽  
Vol 54 (2) ◽  
pp. 447-477 ◽  
Author(s):  
Guanming He ◽  
Helen Mengbing Ren ◽  
Richard Taffler
Keyword(s):  
Tax Avoidance ◽  
Corporate Tax ◽  
Analyst Coverage ◽  
The Impact

The Role of Auditors, Non-Auditors, and Internal Tax Departments in Corporate Tax Aggressiveness

2015 ◽  
Vol 91 (1) ◽  
pp. 179-205 ◽  
Author(s):  
Kenneth J. Klassen ◽  
Petro Lisowsky ◽  
Devan Mescall
Keyword(s):  
Tax Compliance ◽  
Tax Planning ◽  
Internal Revenue Service ◽  
Corporate Tax ◽  
Tax Aggressiveness ◽  
Big 4 ◽  
Confidential Data ◽  
Tax Preparer ◽  
Tax Returns

ABSTRACT Using confidential data from the Internal Revenue Service on who signs a corporation's tax return, we investigate whether the party primarily responsible for the tax compliance function of the firm—the auditor, an external non-auditor, or the internal tax department—is related to the corporation's tax aggressiveness. We report three key findings: (1) firms preparing their own tax returns or hiring a non-auditor claim more aggressive tax positions than firms using their auditor as the tax preparer; (2) auditor-provided tax services are related to tax aggressiveness even after considering tax preparer identity, which supports and extends prior research using tax fees as a proxy for tax planning; and (3) Big 4 tax preparers, in particular, are linked to less tax aggressiveness when they are the auditor than when they are not the auditor. Our findings help policymakers and researchers better understand an important feature of tax compliance intermediaries; particularly, how the dual role via audits is related to observable corporate tax outcomes.

Ending the Tax Haven Scandals

2009 ◽  
Vol 9 (3) ◽  
pp. 1850175 ◽  
Author(s):  
Robert T. Kudrle
Keyword(s):  
Tax Evasion ◽  
Income Tax ◽  
Tax Avoidance ◽  
Personal Income Tax ◽  
Corporate Tax ◽  
Formula Apportionment ◽  
Automatic Information ◽  
Tax Haven ◽  
The World ◽  
Taking Action

States around the world appear more determined than ever to end tax haven abuse. The new U.S. administration, for example, is taking action against both major tax haven problems: corporation income tax avoidance and personal income tax evasion. Some progress may be made. This essay argues, however, that only radically new policy will likely suffice either to shore up corporate tax revenues or to sharply diminish evasion. Global formula apportionment is needed if the corporate income tax is to be preserved, and only a combination of automatic information sharing among governments and source withholding can stamp out evasion. As in most areas of international economic policy, U.S. leadership is essential.

scholarly journals Aggressive Tax Planning and Corporate Tax Avoidance: The Case Study

2019 ◽  
Vol 3 (2) ◽  
pp. 27-38
Author(s):  
Adzhar Sulaiman ◽  
Kamil Md. Idris ◽  
Saliza Abdul Aziz
Keyword(s):  
Tax Avoidance ◽  
Tax Planning ◽  
Economic Consequences ◽  
Corporate Tax ◽  
Policy Makers ◽  
Policy Responses ◽  
Tax Practitioners ◽  
The Media ◽  
Inland Revenue

There have been increasing literature on aggressive tax planning and corporate tax avoidance, which focus on economic consequences (Ksovreli, 2015; Hanlon & Heitzman, 2010). Campaigners have targeted tax-avoiding corporations through the media, citing the enormous amount of tax losses (Hasseldine, Holland & Van der Rijt, 2012). It is pertinent that policy-makers and tax authorities to take action against tax avoiders and tax intermediaries. This paper focuses on the tax avoidance structures identified during tax audits and investigations and further contributes to an understanding of tax avoidance structures and models. The key models identified are related to the abuse of tax incentives and the use of corporate restructuring to minimize or reduced tax exposures. Based on the Case Management System of the Inland Revenue Board of Malaysia, we identify the key structures, their roles and incentives, and outline the tax avoidance schemes. The study summarizes a range of policy responses to tax avoidance, including anti-avoidance rules, disclosure rules and the regulation of tax intermediaries such as tax practitioners.

Does Schedule UTP Have Uniform Long-Run Effects on Corporate Tax Planning?

2017 ◽  
Vol 39 (2) ◽  
pp. 63-79 ◽  
Author(s):  
Kim Honaker ◽  
Divesh S. Sharma
Keyword(s):  
Tax Planning ◽  
Internal Revenue Service ◽  
Tax Rates ◽  
Corporate Tax ◽  
Difference In Differences ◽  
Effective Tax Rates ◽  
Long Run ◽  
Foreign Presence ◽  
Two Measures ◽  
Tax Benefits

ABSTRACT This study investigates the effects of the Internal Revenue Service requiring confidential Schedule UTP disclosures on corporate tax planning over the period from 2008 to 2013. We make three important observations using a difference-in-differences design and two measures of tax planning. First, we find that firms generally report significantly lower current year uncertain tax benefits in the Schedule UTP reporting era. Second, we find these firms do not exhibit a change in cash effective tax rates. Third, we observe that while aggressive tax-planning firms and firms with more foreign presence likely face greater risk with increased transparency under Schedule UTP disclosures, these firms do not exhibit a response to Schedule UTP that is significantly different from that of other firms. Collectively, our results suggest that firms appear to have uniformly adjusted their reporting of uncertain tax benefits without altering the underlying nature of their tax planning.

scholarly journals Corporate Social Responsibility and Corporate Tax Aggressiveness: A Scientometric Analysis of the Existing Literature to Map the Future

2021 ◽  
Vol 13 (11) ◽  
pp. 6225
Author(s):  
Osman Issah ◽  
Lúcia Lima Rodrigues
Keyword(s):  
Corporate Social Responsibility ◽  
Social Responsibility ◽  
Developing Economies ◽  
Tax Avoidance ◽  
The Body ◽  
Future Research ◽  
Scientometric Analysis ◽  
Corporate Tax ◽  
Tax Aggressiveness ◽  
Corporate Social

Using data from 2003 to 2020, this study uses a scientometric approach to investigate the nexus between Corporate Social Responsibility (CSR) and corporate tax aggressiveness research. The objective is to identify under-explored regions, variables, citation patterns, theories, and unexplored topics in the body of knowledge to establish trends in publications on issues about corporate social responsibility and corporate tax aggressiveness. In addition, the study also considers publication journal areas of focus. Research linking CSR and tax avoidance using VOSviewer and triangulating with CiteSpace, by way of approach, is not found in the literature. The findings suggest that CSR and corporate tax aggressiveness researchers do not use far-reaching relevant theories and applicable findings from studies beyond their clusters. Another finding is that African countries remain under-explored due to the absence of institutional representation and an adequate number of investigators regarding CSR and corporate tax aggressiveness research. Finally, the study reveals a number of research topics to be explored. Governments, particularly in developing economies, should create policies that define taxes as part of an entity’s CSR narrative to enhance transparency and legitimacy. In addition, the study is of immense significance to master and PhD students since it provides an agenda for future research.

Ireland’s tax games: the challenge of tackling corporate tax avoidance

2020 ◽  
Author(s):  
Nessa Ní Chasaide
Keyword(s):  
Tax Avoidance ◽  
Global Network ◽  
Corporate Tax ◽  
Tax Havens ◽  
Development Path ◽  
Corporate Profit ◽  
Tax Haven ◽  
Potential Alternative ◽  
Financial Transactions

Abstract The phenomenon of financialization has given rise to new modes of corporate profit accumulation. This includes the creation of global channels for corporate tax avoidance that are embedded in the operations of global firms. Due to a lack of transparency by multinational companies (MNCs), these channels, and their tax implications, are not easily identified or understood. This article sets out the workings of the ‘global tax games’ which operate via intracompany financial transactions alongside the reorganization of the functions of MNCs. The article highlights the consequences for communities of corporate tax avoidance, whereby corporate shareholders and tax haven states profit at the expense of other states and communities. Thus, people living in tax havens, often unknowingly, benefit from tax revenues that should have been paid elsewhere. It offers a case study of Ireland, an understudied case, but which is repeatedly identified as a key node in the global network of corporate tax avoidance. It emphasizes that, in the case of Ireland, a precursor to a potential alternative development path is the acknowledgement of its problematic role.

scholarly journals Reviewing Influence of Information Asymmetry on Corporate Tax Avoidance

2018 ◽  
Vol 19 (1&2) ◽  
pp. 1-11
Author(s):  
Manijeh Kord Manjiri ◽  
Mahdi Ahmadipanah ◽  
◽  
Keyword(s):  
Information Asymmetry ◽  
Tax Avoidance ◽  
Corporate Tax
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