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This paper aims to determine whether tax evasion savings qualify as unlawful proceeds for money laundering purposes. Litigators, regulators and academics have debated the question for decades. A common argument is that tax evasion allows a bad actor to save money that the perpetrator already has on hand. It does not produce a new inflow of wealth that could properly be classified as proceeds. This paper addresses the validity of this argument by using a substance-based approach.

This paper applies the substance-over-form principle and two specialized judicial doctrines to the matter: the economic-substance and step-transaction doctrines.

This paper finds that in substance, tax evasion savings qualify as unlawful proceeds. The opposing argument may be valid on the surface, but it does not withstand the scrutiny of the substance-based principle and insights from the doctrines.

The finding of this paper implies that any courts which value substance can embrace tax evasion savings as unlawful proceeds. Government prosecutors can adopt the position with confidence that substance backs them up. National regulators can push the point. The United Nations’ Financial Action Task Force can consider the option to more explicitly recommend treating tax evasion savings as unlawful proceeds for money laundering.

Using a unique substance-based approach, this paper demonstrates that a dollar of tax evasion savings is substantively equivalent to a dollar of unlawful tax refund proceeds for money laundering purposes. Focusing on an unlawful tax refund overcomes many of the common concerns raised against the treatment of tax evasion savings as unlawful proceeds.

This paper examined tax compliance and its impact on agrochemical traders in Ghana.

Based on the registered agrochemical lists obtained from the Plant Protection and Regulatory Service Department, 92 agrochemical traders were sampled for data collection. Probit regression was used to estimate determinants of tax compliance, whereas the Inverse Probability Weighted Regression Adjustment Model was employed to evaluate the impact of tax compliance on business performance.

The results revealed that age and gender relate positively to enforced tax compliance, while education positively impacts voluntary tax compliance. Nonetheless, tax rate, trust and monthly sales positively affect voluntary tax compliance but negatively impact enforced tax compliance. Inversely, while authorities’ power negatively impacted voluntary compliance, it positively influenced enforced tax compliance confirming the Slippery Slope Framework.

To the best knowledge of the authors, this paper is the first to investigate tax compliance determinants and impact among agrochemical traders, despite the tremendous growth of the agrochemical sub-sector in Africa and Ghana. Therefore, this study makes a modest contribution to empirical studies that validate the Slippery Slope Framework in promoting tax compliance in the agricultural and agribusiness sectors of a developing country. Similarly, it also unearths the impact of tax compliance on agribusiness growth which has yet to be highlighted in the extant literature.

Are franking credit balances priced? This paper aims to investigate the valuation of franking credit balances via a determinant analysis and value relevance analysis.

The determinant analysis examines the factors that contribute to the increasing cumulative level of franking credit balances. Value relevance studies explore whether franking credit balances are priced in the market.

The results provide strong evidence of a size effect that the level of franking credit balances increases with firm size and weak evidence of an international focus effect that the level of franking credit balances increases with international ownership. They also find an individual dividend clientele effect that the level of franking credit balances decreases with individual ownership. They find significant evidence that franking credit balances are priced in the market. One dollar of franking credit is worth 1.4 dollars in firm value. That franking balances are capitalized at more than their face value suggests that franking credits signal firms' future dividend policy. They also find that the market valuation of franking balances increases with firm size but decreases with international focus.

This study provides direct evidence that franking credit balances are capitalized into equity prices. In the determinant analysis, this paper improves Heaney's (2009) model by using the percentage of international ownership as the proxy of international focus, thus addressing the limitation of his measure. In the value relevance tests, the study uses a modified model that includes log-transformation to reduce the skewness of variables based on Tanza's (2014) value relevance model. Moreover, the study suggests that the market valuation of franking credit balances increases with firm size, which contradicts Heaney's (2009) findings.

This study aims to examine the effect of foreign direct investment (FDI) inflows on tax revenue in 34 developed and developing countries from 2006 to 2020.

Feasible generalised least squares (FGLS), a dynamic panel of a two-step system generalised method of moments (GMM) system and a pool mean group (PMG) panel autoregressive distributed lag (ARDL) approach were used to compare the developed and developing countries. Basic estimators were used as pre-estimators and diagnostic tests were used to increase robustness.

The FGLS, a two-step system of GMM, PMG–ARDL estimator’s results showed that there was a significant negative long and positive short-term in most countries relationship between FDI inflows and tax revenue in developed countries. This study concluded that attracting investments can improve the quality of institutions despite high tax rates, leading to low tax revenue. Meanwhile, there was a significant positive long and negative short-term relationship between FDI inflows and tax revenue in the developing countries. The developing countries sought to attract FDI that could be used to create job opportunities and transfer technology to simultaneously develop infrastructure and impose a tax policy that would achieve high tax revenue.

The present study sheds light on the effect of FDI on tax revenue and compares developed and developing countries through the design and implementation of policies to create jobs, transfer technology and attain economic growth in order to assure foreign investors that they would gain continuous high profits from their investments.

This study aims to develop a maturity model designed for assessing the current state of digitization in accounting firms.

The authors have developed this index where the maturity levels are defined from the life cycle theory. For the items of a maturity measure, the authors have adopted a multimethodological approach. That approach allows to identify 27 measurement items to cover the three dimensions of audit, reporting and taxation.

This research proposes a diagnostic tool specific to accounting firms. The authors have tested this index in the Tunisian context. The results show that there are two types of accounting firms. This study found the first firm in the embryonic phase and the other in the growth phase. This points out the active role of Tunisian accounting firms in technology integration.

This study highlights the integration of technology in the accounting field. Specifically, it aims to address technology management in accounting firms by measuring the degree of digitization of accounting firms. This research projects the use of information technologies (artificial intelligence, cloud, big data, etc.) in auditing, reporting and taxation.

On a practical level, this research provides an organizational diagnostic tool to assess the status of their accounting firms in terms of digitization. This will motivate practitioners to make frequent assessments, thus contributing to continuous improvement toward digitization.

The theoretical foundation of this research is based on the theory of the life cycle of technologies. This study is using this theory to identify and describe the current phase of the organization. And that is by indicating the overall scores on the technological capabilities of the accounting firms.

This study examines how the characteristics of innovation knowledge exchanged among affiliate firms affect the ownership strategies adopted for their foreign subsidiaries.

This study employs a cross-classified multilevel model to examine a sample of 185 Korean manufacturing affiliates derived from 49 Chaebols engaged in international diversification, along with their 1,110 foreign manufacturing subsidiaries.

While exploratory innovation knowledge exchange lowers the affiliate's level of ownership in its foreign subsidiary, exploitative innovation knowledge exchange rather increases the affiliate's level of ownership in its foreign subsidiary.

This study advances the literature on intrafirm knowledge exchange by highlighting it as a determinant of ownership strategies. The study further shows that the characteristics of knowledge exchanged at the affiliate level not only determine the ownership structure but also have the potential to shape the direction in which the subsidiary develops its competencies.

This study has practical implications for the managers of business group affiliates. The results suggest that managers should adapt their ownership strategies according to the type of knowledge exchanged at the affiliate level to achieve a balanced and synergistic effect on intraorganizational knowledge exchange.

Previous studies have extensively explored the performance implications related to knowledge exchange. However, there is a notable gap in understanding the mechanisms through which the value of knowledge transferred within an affiliate is realized. To address this gap, this study focuses on ownership strategy as a crucial factor and empirically examines how the characteristics of innovation knowledge exchanged among affiliate firms influence the ownership strategies adopted for their foreign subsidiaries. By investigating this relationship, this study provides valuable insights into the complex dynamics of knowledge exchange and its effect on ownership decisions within business group affiliates.

This study examines the importance of income income-shifting arrangements of US multinational corporations (MNCs) on future stock price crash risk.

This study employs a sample of 7,641 corporation-year observations over the 2005–2017 period and uses ordinary least squares regression analysis.

The authors find that the income-shifting arrangements of MNCs are positively and significantly associated with stock price crash risk after controlling for corporate tax avoidance and other known determinants of stock price crash risk in the regression model. This result is robust to alternative measures of stock price crash risk and income-shifting, and several endogeneity tests. The authors also observe that income-shifting arrangements increase stock price crash risk both directly and indirectly through the information opacity channel. Finally, in cross-sectional analyses, the authors find that the positive association between income-shifting and stock price crash risk is more pronounced for MNCs that use tax haven subsidiaries and have weak corporate governance mechanisms.

The authors provide new empirical evidence that MNCs will likely face significant capital market consequences regarding their income-shifting arrangements.

The purpose of this paper is to present the perception of the textile industry stakeholders (manufacturers, wholesalers, retailers, consumers and tax professionals) on India’s new goods and services tax (GST) system and find whether the introduction of GST has made doing business easier or not.

The researchers used interviews and surveys to capture the perceptions of the textile industry stakeholders at Surat, a major textile hub in India. To econometrically verify the perceptions, the researchers used a logit regression model.

The researchers found that the provision of monthly tax filing has increased textile businesses’ dependency on tax professionals, which increased business costs. Also, the GST system has made tax compliance easier and is user-friendly. However, tax refund-related issues are a significant factor that negatively impacts the ease of doing business post-GST.

The findings of the research shall be helpful for the GST Council of India and policymakers to understand the problems faced by the textile businesses and cater to their problems.

To the best of the authors’ knowledge, this study is original as none of the available studies captures the perception of all the textile industry stakeholders, namely, manufacturers, wholesalers, retailers, consumers and tax professionals, on the GST system applying econometric techniques to validate the perceptions.

This paper aims to study the impact of tax avoidance on corporate risk. It also examines the moderating impact of tax risk on the relationship between tax avoidance and firm risk.

Based on available information in the DATASTREAM database about a sample of French firms listed in the CAC 40 from 2010 to 2022, the study uses the feasible generalized least squares method to investigate the impact of tax avoidance on firm risk and the moderating impact of tax risk. To check the robustness of our results, the authors changed the measurement of variables to identify potential biases and they significantly mitigated the endogeneity concerns using instrumental variable regression. Additional estimations were performed, first by using book-tax differences (BTD) and its components, i.e. temporary and permanent, and second by retesting hypotheses of years before the outbreak of the corona virus disease 2019 (COVID-19) pandemic.

The results show that tax avoidance negatively affects the firm risk while tax risk has a positive effect on firm risk. More importantly, tax risk moderates the negative impact of tax avoidance on the firm risk. When tax avoidance is associated with a high level of tax risk, it leads to a high firm risk. Accordingly, tax avoidance should be considered in conjunction with tax risk when studying the effect put on the firm risk. Further analyses indicate that tax risk moderates the negative relationship between permanent BTD and firm risk.

The major limitation of this study is that it focuses only on French-listed firms, which make it difficult to generalize the results. Furthermore, the authors did not introduce governance variables into our models. An effective governance system and transparent information can reduce some of the perverse effects of risky tax avoidance by reducing the tax avoidance costs. The obtained results are of great interest to researchers who need to include the tax risk concept in their examination of the tax avoidance impacts.

The results are useful for investors wishing to make sound decisions regarding risky tax avoidance practices. Furthermore, the results may signal the need for French policymakers to make more efforts to reduce risky tax avoidance activities that are harmful to investors. They must enforce the existence and the reporting of a tax risk management strategy by firms.

This study contributes to the growing body of literature on the tax avoidance effects with a special focus on firm risk. This study provides the first French evidence of the role of tax risk in the relationship between tax avoidance and firm risk.

This paper examines the relationship between tax avoidance and accounting comparability. The authors argue that aggressive tax behavior impairs the comparability of financial statements by altering the accounting function, which maps economic events into accounting data.

The empirical analysis is based on a large sample of United States (US) firms. The authors use raw and industry-adjusted effective tax rates (ETRs) to proxy tax avoidance. The authors use the measure of accounting comparability developed by De Franco et al. (2011), which aims to capture the similarity of the accounting function.

The authors find that firms with more aggressive tax avoidance strategies have substantially lower accounting comparability. The evidence also shows that the negative effect of tax avoidance on accounting comparability is driven by firms with aggressive tax planning strategies beyond the industry norm. Furthermore, using an alternative measure of accounting comparability as a function of pre-tax income, the authors continue to find evidence of the negative effect of tax avoidance behavior. Importantly, this provides evidence that the effect of aggressive tax planning is not limited to the reported tax expense, but affects the comparability of the overall financial reporting system.

The authors identify a new potential cost of tax aggressive activities, being the loss of accounting comparability as driven by tax aggressive activities. The results contribute to the literature on the costs of tax avoidance and on the determinants of accounting comparability.