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1 – 10 of 260
Open Access
Article
Publication date: 28 June 2023

Anshu Duhoon and Mohinder Singh

The increased interest among academicians to explore more about tax management behavior is evident in the literature on corporate tax avoidance. This paper aims to illustrate the…

7710

Abstract

Purpose

The increased interest among academicians to explore more about tax management behavior is evident in the literature on corporate tax avoidance. This paper aims to illustrate the multiple aspects that influence the tax avoidance behavior of corporations and its impacts through the systematic review method.

Design/methodology/approach

This study used “Tax Avoidance” OR “Tax Aggressiveness” OR “Tax Planning” as search strings to extract the relevant literature from the Scopus database. This study is a comprehensive analysis of existing literature on corporate tax avoidance behavior. Further, the keyword network analysis has been used to find out the most explored and dry research areas related to corporate tax avoidance behavior using VOSviewer software.

Findings

The study finds that taxation decision is an important managerial decision. Managers adopt tax avoidance tactics to boost postax profits to meet the shareholders’ expectations, particularly of risk-averse shareholders, and sometimes for their benefit also. With this, this study also finds that firms’ characteristics, political connections and corporate social responsibility activities also impact taxation decisions. In addition, the study identifies that tax-avoiding behavior has a contradictory impact on firm value, market growth and corporate transparency disclosure decisions.

Research limitations/implications

The study assists the researchers by providing a brief overview of tax avoidance behavior, for corporates in understanding the implications of tax avoidance, and for policymakers to fix the taxation loopholes and bring necessary tax reforms.

Originality/value

This study adds to the existing literature by providing a thorough overview of theories, determinants and outcomes of corporate tax avoidance behavior.

Details

LBS Journal of Management & Research, vol. 21 no. 2
Type: Research Article
ISSN: 0972-8031

Keywords

Open Access
Article
Publication date: 18 August 2022

Fadoua Toumi, Mohamed Amine Bouraoui and Hichem Khlif

This paper aims to study the effect of Hofstede’s cultural dimensions (power distance, individualism, masculinity, uncertainty avoidance and long-term orientation) on corporate tax

2396

Abstract

Purpose

This paper aims to study the effect of Hofstede’s cultural dimensions (power distance, individualism, masculinity, uncertainty avoidance and long-term orientation) on corporate tax avoidance as proxied by the effective tax rate.

Design/methodology/approach

A sample of 944 observations during 2016 was analyzed at three different quantiles (Q 0.25, Q 0.50 and Q 0.75) based on a quantile regression approach.

Findings

Using Hofstede’s (2001) cultural dimensions (power distance, individualism, masculinity, uncertainty avoidance and long-term orientation), the authors find that individualism and masculinity are negatively associated with effective tax rates, and this negative relationship is more pronounced under low tax aggressiveness regime (third quantile). By contrast, long-term orientation is positively associated with the effective tax rate, and this relationship is more prevailing under aggressive tax regime (first quantile). These findings remain stable when using cash effective tax rate as an alternative measure for tax avoidance.

Originality/value

This study adds to the extant literature a further understanding of the impact of cultural dimensions on tax avoidance. The use of quantile regression approach shows how the effect of masculinity, individualism and long-term orientation on tax avoidance varies under different tax management regimes.

Details

Arab Gulf Journal of Scientific Research, vol. 40 no. 2
Type: Research Article
ISSN: 1985-9899

Keywords

Open Access
Article
Publication date: 29 January 2020

Mahdi Salehi, Hossein Tarighi and Tahereh Alidoust Shahri

The purpose of this paper is to investigate the relationship between auditor characteristics and the level of tax avoidance in an emerging market.

10255

Abstract

Purpose

The purpose of this paper is to investigate the relationship between auditor characteristics and the level of tax avoidance in an emerging market.

Design/methodology/approach

In this regard, the effect of various factors such as auditor tenure, auditor industry specialization, audit reports and audit fees on tax avoidance was examined. The study sample includes listed companies in the Tehran Stock Exchange. The time period of study is six years from 2011 to 2016. Also in this study, firm size, leverage, firm age and auditor size were controlled.

Findings

The results of this research were determined in four hypotheses. First and second hypotheses that explore the relationship between auditor tenure and auditor industry specialization with tax avoidance were not confirmed. But the results showed a significant relationship between the type of audit opinions and audit fees with tax avoidance.

Originality/value

The current study investigates the auditor characteristics on tax avoidance in a developing nation of Iran and the results may helpful the developing countries.

Details

Journal of Asian Business and Economic Studies, vol. 27 no. 2
Type: Research Article
ISSN: 2515-964X

Keywords

Open Access
Article
Publication date: 29 February 2016

Vivi Adeyani Tandean and Winnie Winnie

This study aims to obtain an empirical evidence about the effect of good corporate governance on tax avoidance which becomes a proxy of current ETR (Effective Tax Rate). The…

10351

Abstract

This study aims to obtain an empirical evidence about the effect of good corporate governance on tax avoidance which becomes a proxy of current ETR (Effective Tax Rate). The samples of this study were 120 manufacturing companies listed in Indonesian Stock Exchange in 2010 – 2013. The hypothesis testing used multiple regression analysis. The result of this study show that audit committee has a positive effect on tax avoidance in partial but the executive compensation, executive character, company size, institutional ownership, boards of commisioners' proportion, audit committee and audit quality have simultaneous effect to define tax avoidance.

Details

Asian Journal of Accounting Research, vol. 1 no. 1
Type: Research Article
ISSN: 2459-9700

Open Access
Article
Publication date: 9 February 2024

Luca Menicacci and Lorenzo Simoni

This study aims to investigate the role of negative media coverage of environmental, social and governance (ESG) issues in deterring tax avoidance. Inspired by media…

1115

Abstract

Purpose

This study aims to investigate the role of negative media coverage of environmental, social and governance (ESG) issues in deterring tax avoidance. Inspired by media agenda-setting theory and legitimacy theory, this study hypothesises that an increase in ESG negative media coverage should cause a reputational drawback, leading companies to reduce tax avoidance to regain their legitimacy. Hence, this study examines a novel channel that links ESG and taxation.

Design/methodology/approach

This study uses panel regression analysis to examine the relationship between negative media coverage of ESG issues and tax avoidance among the largest European entities. This study considers different measures of tax avoidance and negative media coverage.

Findings

The results show that negative media coverage of ESG issues is negatively associated with tax avoidance, suggesting that media can act as an external monitor for corporate taxation.

Practical implications

The findings have implications for policymakers and regulators, which should consider tax transparency when dealing with ESG disclosure requirements. Tax disclosure should be integrated into ESG reporting.

Social implications

The study has social implications related to the media, which act as watchdogs for firms’ irresponsible practices. According to this study’s findings, increased media pressure has the power to induce a better alignment between declared ESG policies and tax strategies.

Originality/value

This study contributes to the literature on the mechanisms that discourage tax avoidance and the literature on the relationship between ESG and taxation by shedding light on the role of media coverage.

Details

Sustainability Accounting, Management and Policy Journal, vol. 15 no. 7
Type: Research Article
ISSN: 2040-8021

Keywords

Open Access
Article
Publication date: 26 November 2019

Irenius Dwinanto Bimo, Christianus Yudi Prasetyo and Caecilia Atmini Susilandari

The purpose of this paper is to analyze the effect of internal control on tax avoidance analyzing internal (family ownership) and external (environmental uncertainty) factors on…

14618

Abstract

Purpose

The purpose of this paper is to analyze the effect of internal control on tax avoidance analyzing internal (family ownership) and external (environmental uncertainty) factors on the effectiveness of internal control in preventing tax avoidance.

Design/methodology/approach

First, the authors examine the direct effect of the effectiveness of internal control on tax avoidance. Second, the authors examine the effect of moderation of family ownership and environmental uncertainty on the relationship of the effectiveness of internal control on tax avoidance. Third, the authors divide the full sample into two groups, high and less effectiveness of internal control to examine the direct effect of internal control effectiveness on tax avoidance and when considering moderating variables. Fourth, the authors use two different measures of the effectiveness of internal control.

Findings

This research found that effective internal control can reduce tax avoidance. Family ownership affects the relationship between internal control and tax avoidance, but environmental uncertainty does not influence the relationship between internal control and tax avoidance.

Practical implications

Internal control increases compliance with rules and policies, so companies must design and implement effective internal control to prevent tax avoidance activities in violation of tax regulations.

Originality/value

In contrast to previous studies, this study measures the effectiveness of internal control using the index of internal control practice disclosure and considers internal and external factors that can affect the effectiveness of internal control to prevent tax avoidance.

Details

Journal of Economics and Development, vol. 21 no. 2
Type: Research Article
ISSN: 2632-5330

Keywords

Open Access
Article
Publication date: 21 March 2023

Akmalia Ariff, Wan Adibah Wan Ismail, Khairul Anuar Kamarudin and Mohd Taufik Mohd Suffian

This paper examines whether financial distress is associated with tax avoidance and whether the COVID-19 pandemic moderates such association.

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Abstract

Purpose

This paper examines whether financial distress is associated with tax avoidance and whether the COVID-19 pandemic moderates such association.

Design/methodology/approach

The sample covers 38,958 firm-year observations from 32 countries during the period 2015–2020. Financial distress is measured using the ZSCORE by Altman (1968), while tax avoidance is based on the book-tax difference.

Findings

Financially distressed firms exhibit low tax avoidance pre- and during the pandemic periods. The authors find higher tax avoidance during the pandemic compared to the pre-pandemic period, but the pandemic enhances the negative relationship between financial distress and tax avoidance.

Research limitations/implications

The study offers evidence on how financial distress drives firms to engage in more tax avoidance when firms globally encountered various levels of financial difficulty sparked by the economic challenges of the COVID-19 pandemic.

Practical implications

The findings provide insights to policymakers on the need to monitor and incentivise financially distressed firms, especially during economic challenges due to pandemic.

Originality/value

This study adds to the limited, albeit important, evidence on the joint effect of the COVID-19 pandemic and financial distress on tax avoidance.

Details

Asian Journal of Accounting Research, vol. 8 no. 3
Type: Research Article
ISSN: 2459-9700

Keywords

Open Access
Article
Publication date: 25 February 2022

Alice Medioli, Stefano Azzali and Tatiana Mazza

Prior literature shows that income shifting is widely performed by multinational groups, but no research as yet has studied alignment between controlling and minority interests on…

1395

Abstract

Purpose

Prior literature shows that income shifting is widely performed by multinational groups, but no research as yet has studied alignment between controlling and minority interests on tax avoidance in multinational groups with high ownership concentration. This study aims to analyze the effect of high ownership concentration on cross-jurisdictional tax-motivated income shifting.

Design/methodology/approach

To test the hypotheses, this study focuses on European multinational groups. Data are collected on European parent firms and each subsidiary. The model considers the natural logarithm of profit before tax and tax incentive.

Findings

Findings show that subsidiaries shift income for tax avoidance purposes. The alignment of shareholders’ interests and ownership concentration leads to higher levels of tax avoidance through subsidiaries’ infra-group transactions. High ownership concentration decreases the influence of minority interests and allows parent company shareholders to choose a tax avoidance strategy more freely.

Practical implications

The results suggest that taxation levels need to be harmonized to reduce the incentive for tax avoidance and the incentive of governments to reduce their statutory tax rate, to shift profits inwards and reduce outward flow. Without international coordination, this approach may lead to the unevenness of legislative frameworks around the world, and bring significant disadvantages for some countries, influencing economic growth and business development.

Originality/value

This study extends prior findings showing that tax-motivated income shifting as a method of tax avoidance in European multinational groups is stronger in groups with high levels of ownership concentration. This means that managers have the incentive to shift income between subsidiaries for tax and ownership benefits in favor of the parent company’s shareholders and against minority interests.

Details

Management Research Review, vol. 46 no. 1
Type: Research Article
ISSN: 2040-8269

Keywords

Open Access
Article
Publication date: 19 March 2018

Prem Sikka

The purpose of this paper is to develop arguments for a public policy of requiring all large companies to make their tax returns publicly available. It is argued that such a…

9572

Abstract

Purpose

The purpose of this paper is to develop arguments for a public policy of requiring all large companies to make their tax returns publicly available. It is argued that such a policy would help to check tax avoidance, strengthen public accountability and secure fair competition.

Design/methodology/approach

The policy proposal rests on notions of transparency and public accountability.

Findings

The paper argues that the proposed policy is feasible.

Research limitations/implications

The paper hopes to stimulate debates about the value of public filing of corporate returns and limits of public accountability.

Social implications

The paper extends the range of public policies which might be able to check organised tax avoidance.

Originality/value

It is one of the few papers to call for public filings of large company tax returns.

Details

Journal of Capital Markets Studies, vol. 2 no. 1
Type: Research Article
ISSN: 2514-4774

Keywords

Open Access
Article
Publication date: 19 June 2023

Francesco Scarpa and Silvana Signori

This study aims to contribute to the debate about the place of corporate taxation in corporate social responsibility (CSR) by reviewing the present state of research, offering a…

2637

Abstract

Purpose

This study aims to contribute to the debate about the place of corporate taxation in corporate social responsibility (CSR) by reviewing the present state of research, offering a comprehensive understanding of the content and dimensions of corporate tax responsibility (CTR) and discussing further developments in research and action.

Design/methodology/approach

The study builds on a systematic literature review of 117 theoretical and empirical papers on tax within the broad field of CSR published in peer-reviewed academic journals and books.

Findings

The analysis unfolds and discusses the construct of CTR and proposes a unified conceptualisation that elucidates for what firms are (or should be) held accountable on tax matters and the different dimensions (i.e. instrumental, political, integrative and ethical) which justify greater tax responsibility and enable its achievement.

Practical implications

The results can provide companies with practical guidance to enhance their tax responsibility and can give stakeholders and policymakers suggestions for new mobilisation strategies to achieve more responsible tax behaviour.

Social implications

Corporate tax payments are a fundamental dimension of CSR, as they fund public goods and services and reduce the unequal distribution of wealth. Providing a more structured understanding of CTR, this paper can contribute towards attaining more responsible tax outcomes which can better serve and benefit the whole society.

Originality/value

This study offers a structured overview of the present state of tax research in CSR, while providing a comprehensive understanding and conceptualisation of the construct of CTR, thus enabling scholars to situate their work and develop further relevant research in this field.

Details

Sustainability Accounting, Management and Policy Journal, vol. 14 no. 7
Type: Research Article
ISSN: 2040-8021

Keywords

1 – 10 of 260