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PurposeThis paper aims to understand the international practices of tax planning. International companies choose their capital structure according to differences in international taxation, in order to minimize the tax burden of the whole company group. This paper reviews the literature that deals with international tax avoidance techniques by highlighting tax planning measurements in the empirical literature. The methodology used is the narrative approach of literature review, which consists on assembling and synthesizing previously published research. The paper concludes that there are several approaches of international tax planning including transfers of revenues by geographical area, redevelopment of the company, haven and loopholes in tax legislation. Moreover, finding more precise measures of tax planning techniques would be of great value to studies in this respect.Design/methodology/approachThe authors follow the guideline provided by Templier and Pare (2015) in order to select the type of the literature review to use in this paper. Accordingly, this paper employs the narrative approach of literature review, which consists on assembling and synthesizing previously published research on international tax planning. This narrative review will serve as a starting point for future investigations and research developments. The authors rely on a logic of configuration in order to analyze data. This logic consists on addressing then organizing various aspects of international practices of tax planning.FindingsThe paper concludes that there are many aspects of international tax planning that need to be covered by future researchers, especially finding more precise measures of tax planning techniques would be of great value to studies in this respect.Research limitations/implicationsThe literature survey reveals the following issues. First, few studies have been conducted to date. Second, several approaches remain unexplored, and studies rely only on surveys' results collected from the annual report of companies (microeconomics variables), while macroeconomic variables can better explain the phenomenon of international tax planning. In this context, studies containing proposals to estimate more accurate international companies' tax planning techniques would also be welcome. Previous literature supposes premises on this issue th:at limit the accurateness of the analysis. Particularly, empirical literature is short of the proper measurement to evaluate corporate tax avoidance. This would explain the various interpretations of research findings. Hence, finding more precise measures of tax planning techniques would be of great value to studies in this respect.Practical implicationsThis literature survey highlights recent studies dealing with tax planning theories within the framework of corporate governance. This theoretical framework particularly specifies which key variables are the most suitable for measuring tax planning methods and highlights the need to examine how those key variables might differ and under what circumstances. In addition, it underlines limits on tax planning measurements by addressing the comparison of the empirical measurements.Originality/valueThe paper contributes to the literature on internal tax planning in several ways. First, this study is unique in that it constitutes the only literature review that provides a comprehensive overview of research on international tax planning. Especially, it extends previous studies by considering the specific new trend of empirical literature dealing with the techniques of international tax planning. This literature review identifies two categories of tax planning approaches including techniques related to company internal management practices and international tax planning techniques. In addition, the literature survey helps to determine various strategies used by multinationals for tax planning, through an in-depth review of the existing studies. Finally, it provides researchers with a starting point to further explore issues related to tax avoidance techniques.

We have attempted to theorize and empirically demonstrate the moderating effects of three external monitors (institutional investors, securities analysts, and external auditors) on the relationship between tax planning and firm performance. We propose that these monitors can affect either the form or the strength of that relationship. Data cover 73 companies listed in the Euronext 100 index for the period from 2008 to 2012. Empirical analyses are conducted using various statistical tools to identify the presence of moderator variables. Most importantly, results showed that institutional investors, securities analysts and external auditors moderate the form of the tax planning-performance relationship; it appears they involve themselves directly in the firms’ tax decisions. Interestingly, we find evidence that these external monitors moderate the strength of the tax planning-performance relationship; that is, they may indirectly influence the effectiveness of firm tax strategic. Our results are insensitive to alternative measures of firm performance, to additional control variables and to alternative specifications. Our paper offers two contributions to corporate governance research. First, against a backdrop of increased attention on firms’ tax planning, it provides empirical evidences concerning the nature and significance of the potential moderating effects of select external monitors on the relationship between tax planning and firm performance. Second, there is little attention about external monitors in research studies. In fact, this issue is not addressed in the literature within a European context using recent data.