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This paper investigates whether China's R&D tax deduction policy triggers firms to manipulate their R&D expenditures upward.

This paper employs the ratio of actual tax savings as a proxy for the benefits of the R&D tax deduction policy based on manually collected and systematically cross-checked data. The relationship between tax benefits and abnormal R&D spending is estimated in a sample of Chinese A-share listed companies for the period 2007–2018.

The findings suggest that tax deductions lead to positive abnormal R&D spending and that this deviation in R&D spending may be attributed to firms' upward R&D manipulation for tax avoidance. The results also indicate that this behavior is more significant for the period after the policy revision, in non-HNTEs (high and new technology enterprises), and in firms with a high ratio of R&D expenses.

It is difficult to establish a sophisticated and unified model to identify the specific strategy of upward R&D manipulation that firms use to obtain tax benefits.

Managers should take into account upward R&D manipulation when designing governance mechanisms. Policymakers in developing countries may further pursue preferential tax policies that cover every stage of innovation activities gradually; the local provincial governments need to leverage their proximity and flexibility advantages to develop a tax collection and administration system.

This study contributes to the understanding of the complex effect of R&D tax incentives and helps more fully illuminate firms' upward R&D manipulation behavior from the perspective of tax planning strategies, which are underexplored in previous research.

The purpose of this paper is to extend the slippery slope framework by exploring different dimensions of compliance quality and tax minimisation under different tax climate manipulation by groups.

The authors run a random assignment of tax climate manipulations through questionnaire with 301 usable data collected from the full-time postgraduate students, employed individuals and self-employed individuals. Manipulation check and results are generated via multivariate analysis of variance.

The results confirm the biggest impact of synergistic climate on voluntary compliance, and small to medium impact of antagonistic climate on tax evasion across three groups.

The manipulation of this research is constrained with two treatments in addition to the common pitfall of social desired responses of self-report.

Theoretically, this study empirically explores tax minimisation dimensions and provides new insights that only illegal tax minimisation is at maximum under the prevailing negative antagonistic climate, but not for legal tax minimisation. Second, the effect of tax climate represented by trust and power on enforced compliance is minimal, as compared to the strong effect of positive synergistic climate on voluntary compliance. As for policy implications, possible guidelines and interventions are outlined to policy makers which would lead to a better quality of compliance behaviour.

This study operationalises and manipulates tax climate from perceptions of trust, legitimate power and coercive power. It also further affirms the prior inconsistent findings in respect of tax behavioural intentions due to sampling group and cultural differences.

This paper aims to investigate how transfer pricing (TP) and earnings management affect tax avoidance of firms in Ghana.

The authors use a panel data set from 2008 to 2015 to further shed light on transfer pricing-tax avoidance nexus by examining the complex interaction of three key variables: transfer pricing, earnings management and tax avoidance.

The results show that almost all the sample firms have engaged in some form of transfer pricing strategies and the manipulation of earnings to avoid tax during 2008-2015. There is evidence to suggest that non-financial multinational corporations manipulate more earnings than the financial firms while financial firms also use more TP than non-financial firms. The overall results suggest that the sensitivity of tax avoidance to transfer pricing decreases as firms increase their earnings management. By extension, these results have important policy implication for policymakers in assessing the effectiveness of tax laws relating to transfer pricing.

The authors investigate how transfer pricing and earnings management affect the avoidance of firms operating in Ghana.

This paper aims to discuss the key aspects of the international trade in antiquities and the practice of philanthropic donation of objects to museums that allow for certain types of tax deduction manipulation, using a case of tax deduction manipulation from Australia and a case of tax fraud from the United States as examples.

Two thoroughly researched case studies are presented which illustrate the particular features of current and past antiquities donation incentivisation schemes which leave them open to manipulation and fraud.

The valuation of antiquities is subjective and problematic, and the operations of both the antiquities market and the museums sector are traditionally opaque. Because of this, tax incentivisation of antiquities donations is susceptible to fraud.

This paper presents the mechanisms of the antiquities market and museum world to an audience that is not familiar with it. It then clearly demonstrates how the traditional practices of this world can be manipulated for the purposes of tax fraud. Two useful case studies are presented.

Companies avoid taxes in a variety of ways and use different methods to do that, one of the most common being earnings management. The purpose of this paper is to investigate whether companies manipulate their financial data in order to reduce taxes paid.

We considered a sample of 63 listed Romanian companies for the period 2016–2021. The Beneish model was used for estimating earnings management, and the effective tax rate was used to measure tax avoidance. The analysis was carried out using regression analysis in Stata13 software.

The findings of the research indicate a negative and statistically significant association between effective tax rate and earnings management, implying that one of the main reasons why companies manipulate their earnings to reduce tax burden and avoid taxes. Moreover, our results show that return on assets (ROA) has a statistically significant negative influence on the effective tax rate. Furthermore, our analysis reveals that firm size, growth, and Big4 audit have no effect on effective tax rate.

Because it analyzes concrete cases using financial data and provides some recommendations for addressing the issue of tax avoidance, this work is useful in advancing both quantitative and qualitative research on this topic. This research is relevant for businesses, governments, regulators, audit professionals and investors.

The study, by analyzing concrete cases using reported financial data, contributes in filling the gap within the literature that results from a lack of scientific research on the relationship between tax avoidance and earnings management, and then it clarifies the nature of the causal connection between them. Moreover, it considers a combination of firm related variables including performance, size and also audit quality.

The cost of compliance is an essential variable to consider when administering a tax system. One recent study estimates that the yearly federal tax compliance burden in the US exceeds $431 billion dollars, and this cost does not include the potential greatest cost of all – changes in taxpayer behavior that reduces economic efficiency (Laffer, Winegarden, & Childs, 2011). One example of such behavior is the renunciation of US citizenship due to the impact of the Foreign Account Tax Compliance Act (FATCA) reporting requirements. Using this context, our study examines how FATCA compliance costs can affect taxpayer behavior in a manner that reduces economic efficiency. We collected responses from 197 experienced US taxpayers living in the US. Our study finds that when tax compliance costs are high, taxpayers may be more likely to renounce their citizenship to avoid FATCA reporting requirements. We further learn that tax compliance costs may increase the likelihood of citizenship renunciation even in the presence of a minimal US tax burden. Supplemental mediation analysis demonstrates that one's perceived fairness of compliance does not mediate the effect of high compliance costs on a taxpayer's renunciation decision; however, one's perceived fairness of compliance and fear of sanctions, collectively, partially explain the effect of tax burden on the renunciation decision. In addition, we find that ethics, the perceived probability of detection, and average income level affect the decision to renounce citizenship. Our findings suggest broader impacts of tax policy and provide a foundation for future research to further explore domestic and foreign tax compliance behaviors.

For many global firms and corporate oligopolies, transfer pricing is essential. The transfer pricing literature as it is currently written is succinctly summarized in this study. The authors offer a thorough analysis of transfer pricing research in this study. This review sheds light on the top researchers, approaches, conclusions, theoretical and empirical gaps, and upcoming issues of transfer pricing research over the previous nine years through a methodical analysis of 29 research publications from the Scopus database (2014–2022). To help graduate students pursue further degrees in this area, such as a master's, thesis or PhD, this study will highlight five research issues.

This essay looks at five significant areas of tax avoidance and transfer pricing research. Some of these issues include determining the impact of transfer pricing regulations on various types of multinational corporations, assessing the effectiveness of transfer pricing regulations in preventing tax evasion, examining various policy options and determining the impact of transfer pricing on other economic outcomes using a systematic literature review.

The findings of this review demonstrate the need for transfer pricing research to look more closely at transfer pricing as a tool for business in addition to compliance and tax management.

This analysis concludes with future directions for transfer pricing research.

This paper uses two studies to examine taxpayers' knowledge of tax incentives for charitable giving and also explores the consequences of this knowledge on charitable giving decisions. The first study surveys 600 US taxpayers to establish a baseline understanding of how making a charitable contribution affects taxpayers. In the second study, we conduct an experiment with 201 US taxpayers in which we manipulate the knowledge of taxpayers by providing an educational intervention; we also measure, if, how much is donated in a hypothetical scenario under various tax deductibility conditions. The first study indicates fewer than half of participants understand the basic principles of how charitable donations affect tax liability. Our second study reveals that a short educational video is extremely effective at improving taxpayers' understanding and helping them accurately estimate the tax benefit associated with charitable giving. However, through moderated mediation analysis, we also show that participants who received this educational intervention and accurately estimated the tax benefits in turn decreased their charitable giving. We conclude that the majority of US taxpayers do not understand whether they benefit from certain deductions and may be overestimating the benefit they receive from charitable giving, resulting in giving more than they intend.

This study examines the determinants of enforced tax compliance behavior of Malaysian citizens where trust in tax authorities is assumed to be a mediator. Quota sampling method was used to select a sample of 340 participants to participate in a survey. A two-step structural equation modeling (SEM) process was adopted to test a framework comprising 13 hypotheses. Model fit was initially measured using confirmatory factor analysis (CFA) while model specification was applied in the second stage to test the structural relationship. The mediating effects of trust in tax authorities were tested via Baron and Kenny (1986) approach, bootstrapping, and AMOS AxB estimand. The findings confirmed that trust in government, trust in tax administrator, power of Inland Revenue Board of Malaysia, and awareness influence enforced compliance. However, tax morale and tax amoral behaviors do not influence enforced compliance. The findings suggest that citizens would fulfill their tax responsibilities if they believe that tax authorities are effective in tax administration. Trust in government fosters trust in the tax authorities. This study contributes to existing literature by confirming the factors that affect enforced tax compliance.

The purpose of this study is to investigate the relationship between ethical values and performance in the context of the banking sector in Malaysia.

Based on the philanthropic model, this study posits that firms undertaking zakat and charity are ethical firms. Zakat disclosure index (ZDI) and charity disclosure index (CDI) were constructed to measure ethical values. This study hypothesises that ethical values are positively associated with bank performance. Ethical values (i.e. CDI and ZDI) and financial performance data (i.e. return on assets) were collected from the disclosures made in the annual reports of 50 banks for a period of five years (2010-2014).

A positive association was found between zakat disclosure and bank performance. The results indicate that higher zakat disclosure is associated with greater bank performance. However, no relationship was found between charity disclosure and bank performance.

Considering the limitation of the index used in this study, other dimensions such as corporate governance, sustainability, products and environment can be considered in the development of index to measure ethical values in future studies.

This study offers additional explanation on the relationship between ethical values and performance by examining the role of zakat disclosures that characterize the unique aspects of Malaysian companies.