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This chapter investigates the effects of the corporate sector on the effectiveness of selected tax compliance instruments in the context of large corporate taxpayers belonging to the finance, manufacturing, and service sectors. Applying multilevel logit models based on real tax office and survey data from Bangladesh, it is found that the filing compliance of large corporate taxpayers is influenced by penalty, tax audit, and taxpayer services, while reporting compliance is influenced by tax audit, criminal prosecution, and tax simplification. In the case of payment compliance, two coercive instruments – penalty and tax audit – have been found to be statistically significant. However, when sector characteristics are considered, the extent of the influence of these instruments, and, in some cases, their statistical significance changes. This suggests that the effectiveness of tax compliance instruments, among other things, largely depends on the sector affiliation of corporate taxpayers. Overall, this study establishes that corporate sector plays an important role in the effectiveness of tax compliance instruments, with the caveat that findings might be different if working definitions of the study variables were measured differently.

This chapter applies an “integrative” model to examine the impact and interaction of economic and moral/social factors in the corporate tax compliance context. More specifically, it examines whether social norms moderate the effect of economic factors in this context.

Fifty-five MBA students assumed corporate CFO roles and analyzed a proposed aggressive corporate tax shelter transaction (“tax shelter”). Participants indicated whether they would recommend the tax shelter and answered questions regarding the transaction and their corporate tax compliance views.

Hierarchical Regression results indicate that, in the corporate tax compliance context, decision makers’ norms (moral/social factors) moderate the effect of perceived expected value of aggressive tax transactions (economic factors). More specifically, results indicate that (1) perceived legality of aggressive corporate tax transactions significantly impacts willingness of corporate decision makers to recommend them, even when controlling for perceived economic effect of the transaction, and (2) due to moral/social factors, corporate decision makers often may not support aggressive tax treatments with material positive expected values.

Accordingly, (1) custom and social factors should be integrated into the corporate tax compliance decision-making framework, and (2) campaigns to strengthen corporate tax compliance should focus on the law’s text and intent as well as upon sanctions for noncompliance.

Tax compliance involves complying with the tax rules and regulation, which encompasses the filing, reporting and payment of tax. The two aspects of tax non-compliance are tax evasion and tax avoidance. While the ethicality of tax evasion as an illegal act of reducing tax is clear, the consensus regarding the morality of tax avoidance as a legal act of minimizing tax is mixed. This chapter will discuss the ethical perspective of tax (non)compliance.

We approach this topic by discussing the two important terms of tax non-compliance namely tax evasion and tax avoidance from the ethical point of view. The tax evasion and tax avoidance were critically evaluated to justify whether it is ethical or not. The tax non-compliance is also associated to the corporate governance which if do effectively help to protect the interest of larger stakeholder.

In a nutshell, tax non-compliance such as tax avoidance and tax evasion is unethical act and these acts of non-compliance go against the spirit of contemporary corporate governance which sought to protect the interest of the stakeholders.

Tax non-compliance could enhance shareholders wealth (in terms of reduced tax); it affects the distribution of wealth (public benefits financed by tax revenues) among the society at large as another stakeholder affected by such act. Future research may be conduct to investigate this to the larger sample.

Firms should avoid engaging in non-compliance activities such as engaging in tax evasion and aggressive tax avoidance as part of its social obligation to the society in line with the spirit espoused in the contemporary corporate governance.

This paper argues that tax non-compliance is unethical and highlights the importance of having efficient corporate governance for larger stakeholder’s interest.

This paper examines the corporate income tax compliance costs and their determinants by analyzing survey and financial statements data from firms operating in Greece. We find that corporate tax compliance costs are of considerable size and vary with several firm-specific characteristics, including the firm’s size, its age, the sector in which it operates, its location, and its legal form. The paper intends to raise awareness regarding the impact of tax compliance costs, especially for countries, such as Greece, that were significantly affected by the economic and financial crisis.

The Compliance Assurance Process (CAP) is a federally funded IRS corporate audit program. The program’s goal is to determine the best tax treatment for complex transactions before a corporation files its tax return. The US Department of the Treasury has voiced concerns regarding resource constraints and whether the program enhances public (nonprofessional investor) and investor confidence. We conduct a behavioral experiment using 176 Master of Business Administration and Master of Accounting students as proxies for nonprofessional investors. In the experiment, we examine the effects of CAP participation and corporate tax risk profile on judgments about financial statement credibility. We use a 2 × 2 experimental design with corporate tax risk profile manipulated as high risk or low risk and participation in CAP manipulated as participatory or non-participatory. This research investigates whether CAP program participation and/or tax risk level influence nonprofessional investors’ perceptions of the certainty and accuracy of the provision for income taxes. The results suggest both CAP program participation and tax risk influence nonprofessional investors’ perceptions of the certainty of the income tax provision; and tax risk also influences nonprofessional investors’ perception of the accuracy of the income tax provision.

The purpose of this chapter is to serve as a resource for accounting faculty seeking tax-related cases to include in their courses. This annotated bibliography provides a table and discussion of 50 educational tax cases published in six major accounting journals from 2003 to 2021. Cases are classified and discussed by recommended course placement. In addition, the authors make observations about trends in case content and format. This chapter complements the Fogarty (2022) review and commentary on tax cases published in this volume.

The “slippery slope” framework assumes that trust and power are alternative approaches to attaining taxpayers’ compliance and for reducing tax evasion. This study aimed to investigate whether the impacts of power and trust dimensions previously found in developed countries also exist in developing countries, such as Indonesia. Data were collected through a researcher-administered questionnaire survey of 274 small business taxpayers and were then analyzed through stepwise linear regressions. The results show that trust significantly influences voluntary tax compliance, but neither trust nor power promotes enforced tax compliance. Ultimately, this study’s findings only partly support the assumptions of the “slippery slope” framework. This study also contributes to current global literature on the influence of trust and power in voluntary and enforced tax compliance in developing countries, especially in Asia.

A report of the International Labour Organization on undeclared work in Greece refers to failures of formal institutions which contribute to the asymmetry between state and civic morality. The particular asymmetry is explored through the context of tax morale, which is one of the major determinants of the shadow economy. Although several papers have been published on the Greek shadow economy, tax morale in Greece has not been adequately explored. This research aims to investigate the effect of the economic downturn on the factors determining the level of tax morale through primary data from a European Union-funded research project on the Greek shadow economy. The findings provide policy orientations toward transferring activities from the shadow to the official economy, a goal which is part of Europe 2020 strategy.

Psychological contracts represent unofficial or informal expectations that an individual holds, most commonly applied to an employer–employee relationship. Understanding psychological contracts helps explain the consequences of unmet expectations, including increased budgetary slack and reduced audit quality. This chapter reviews and synthesizes accounting behavioral research that discusses psychological contracts and that was published in academic and practitioner journals in the areas of financial accounting, management accounting, auditing, taxes, non-profit organizations, accounting education, and the accounting profession itself. Despite the prevalence of psychological contracts in the workplace and the applicability to behavioral research, accounting literature remains limited regarding applications of psychological contracts. This chapter aggregates research across all areas of accounting to provide suggestions for use of psychological contracts in future research and thus create a connected research stream.