Is Tax Avoidance Related to Firm Risk?

Guenther, David A.; Matsunaga, Steven R.; Williams, Brian

doi:10.2308/accr-51408

Cited by 331 publications

(447 citation statements)

References 47 publications

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“…However, its high relevance gives rise to the assumption that complexity is not only driven by the complexity inherent in the regulations themselves, but also increasingly by the decision power of the tax authorities. This finding corresponds to the growing body of literature on tax risk Drake et al 2017;Guenther et al 2017;Nesbitt et al 2017) which examines the deviation of the final tax burden from the estimated tax burden. Such deviations can be caused, for example, by adjustments resulting from arbitrary decisions of tax officers in tax audits.…”

Section: Global Analysismentioning

confidence: 91%

“…9 The last driver "unpredictability" has primarily been mentioned as another important complexity driver by the tax professionals we spoke to. While Slemrod (1989) and Cooper (1993) use the term "predictability" as a desirable feature of the tax system based on theoretical considerations, later (empirical) studies usually did not employ the reverse as a driver of complexity although "unpredictability" has received a lot of attention over the last years (Heimig 2014;Neuman 2016;Guenther, Matsunaga and Williams 2017;Feller, Huber and Schanz 2017;IMF and OECD 2017). Thus, it seems to be justified to include it as a complexity driver.…”

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confidence: 99%

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What are the Drivers of Tax Complexity for Multinational Corporations? Evidence from 108 Countries

et al. 2017

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All over the world, firms and governments are increasingly concerned about the rise in tax complexity. To manage it and develop effective simplification measures, detailed information on the current drivers of complexity is required. However, research on this topic is scarce. This is surprising as the latest developments-for example, triggered by the BEPS project-give rise to the conjecture that complexity drivers may have changed, thus questioning the findings of prior studies. In this paper, we shed light on this issue and provide a global picture of the current drivers of tax complexity that multinational corporations face based on a survey of 221 highly experienced tax practitioners from 108 countries. Our results show that prior complexity drivers of the tax code are still relevant, with details and changes of tax regulations being the two most influential complexity drivers. We also find evidence for new relevant complexity drivers emerging from different areas of the tax framework, such as inconsistent decisions among tax officers (tax audits) or retroactively applied tax law amendments (tax enactment). Based on the responses of the practitioners, we develop a concept of tax complexity that distinguishes two pillars, tax code and tax framework complexity, and illustrates the various aspects that should be considered when assessing the complexity of a country's tax system.

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Section: Global Analysismentioning

confidence: 91%

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confidence: 99%

What are the Drivers of Tax Complexity for Multinational Corporations? Evidence from 108 Countries

et al. 2017

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“…Pesquisas futuras podem tentar identificar as circunstâncias em que a Agressividade Tributária conduz a riscos adicionais. Desse modo podem fornecer informações sobre os fatores que deveriam influenciar as estratégias fiscais de uma empresa (Guenther et al, 2017). Qual a relação entre a Agressividade Tributária e a propensão a ser autuado por autoridade tributaria?…”

Section: Relação Entre O Risco Fiscal E a Agressividade Tributáriaunclassified

“…Existe, na atualidade, um crescente interesse nos temas associados à agressividade tributária e ao planejamento tributário, tendo a temática obtido ainda mais destaque nos últimos anos em face de uma combinação de fatores políticos, econômicos e tecnológicos, que têm impulsionado o foco do interesse público para as decisões corporativas, em especial aquelas relativas a tributação (Guenther, Matsunaga & Williams, 2017;Wilde & Wilson, 2017). Como reflexo desse crescente interesse, destaquem-se as novas regras do Base Erosion and Profit Shifting (Beps), estruturadas com o claro propósito de minimizar a possibilidade de planejamento tributário internacional para empresas multinacionais («BEPS Actions -OECD», 2017).…”

Section: Introductionunclassified

Agressividade Tributária: Um Survey da Literatura

Martinez

2017

REPeC

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Objetivo e Método: o objetivo deste artigo é revisar os estudos internacionais e no Brasil sobre a agressividade tributária, esta entendida como o comportamento de tentar evitar ou minimizar o ônus tributário explícito para a corporação. Enquanto tema de pesquisa acadêmica, o tax aggressiveness ou tax avoidance revela-se em um tópico diversificado e vasto, embora relativamente recente. Resultados e Contribuições: Entre as perguntas de pesquisa que nessa temática se desenvolvem, destaquem-se a identificação de quais seriam os determinantes da agressividade tributária da firma, apreciando: (i) características das firmas; (ii) atributos ambientais; (iii) restrições de gatekeepers; e (iv) incentivos para as firmas. Revisam-se os determinantes da agressividade tributária dos gestores e a influência da governança e estrutura de controle. Adicionalmente, identificam-se as potenciais consequências econômico-financeiras da agressividade tributária para as firmas e as proxies empíricas existentes para mensurar a agressividade tributária. O estudo se encerra com a apresentação de oportunidades futuras de pesquisa na temática.

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“…For example, the increase or decrease body of literature on di¤erent types of volatility. For recent studies that refer to tax volatility issue in accounting see, e.g., De Simone and Stomberg (2013), Jacob and Schütt (2013), McGuire, Neuman and Omer (2013) and Neuman, Omer and Schmidt (2016), Guenther, Matsunaga and Williams (2016). 13 For a comparison of dynamic programming and contingent claims analysis and the resulting tax e¤ects see Sureth (2004, 2005).…”

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confidence: 99%

Does Capital Tax Uncertainty Delay Irreversible Risky Investment?

Niemann

Sureth-Sloane

2016

SSRN Journal

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Tax uncertainty is often claimed to be harmful for investments. Capital taxes, such as property and wealth taxes, are particularly exposed to tax uncertainty. Capital tax uncertainty emerges from expected tax reforms, the unclear outcome of future tax audits, and simpli…ed estimates of capital tax bases in investment models. Uncertain returns on investment as well as stochastic taxation contribute to overall uncertainty and may significantly a¤ect investment decisions. Hitherto, it is unknown how capital tax uncertainty a¤ects investment timing. However, it is well known that both uncertainty and capital tax may be harmful for investment and decelerate investment activities. We are the …rst to study the investment timing e¤ects of stochastic capital taxes in a real options setting with risky investment opportunities. Our results indicate that even risk neutral investors are sensitive with respect to capital tax risk and may react in a surprising manner to a newly introduced stochastic capital tax. As an apparently paradoxical investment e¤ect, we …nd that increased capital tax uncertainty can accelerate risky investment if such uncertainty is su¢ ciently low compared to cash ‡ow uncertainty. In contrast, high capital tax risk delays high-risk innovative investment projects. To reduce unintended consequences of uncertain tax policy, tax legislators and tax authorities should avoid high levels of capital tax uncertainty. Broadening the capital tax base or increasing the capital tax rate induces ambiguous timing e¤ects. Furthermore, high-growth investments are likely to be postponed if they experience a capital tax cut. Since investment reactions upon tax reforms are well-known to a¤ect income and wealth distribution, reliable estimations of the impact of taxes on economic decisions are necessary.JEL classi…cation: H25; H21

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Is Tax Avoidance Related to Firm Risk?

Cited by 331 publications

References 47 publications

What are the Drivers of Tax Complexity for Multinational Corporations? Evidence from 108 Countries

What are the Drivers of Tax Complexity for Multinational Corporations? Evidence from 108 Countries

Agressividade Tributária: Um Survey da Literatura

Does Capital Tax Uncertainty Delay Irreversible Risky Investment?

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