Tax installment plans as a determinant of tax aggressiveness in Brazilian listed companies

Abstract

The aim of this article was to study the impact of tax installment plans on the tax aggressiveness of Brazilian listed companies. Despite the relevance and timeliness of the topic, there are no studies that examine the use of special tax installment plans as a determinant of the tax aggressiveness of Brazilian listed companies. Tax installment plans have been used repeatedly by Brazilian companies and the number of adherents has grown significantly over time, where this resource can be understood by companies from the perspectives of tax regularization and tax savings. The research contributes to the scientific knowledge on the subject by providing evidence on the determinants of tax aggressiveness, and it is believed that the government can use the results to improve the offer of tax installment plans and the understanding of tax legislation, such as through the development of restrictions on access to installment plans, by allocating them to companies in real financial difficulties, as well as through improvements in its inspection process, considering that companies that pay taxes in installments are more tax aggressive. The data were obtained from explanatory notes, through the Ministry of the Economy’s access to information service, and from the Economatica® database. The Special Tax Regularization Program (PERT) 2017 was used as a reference for tax installment plans, and tax aggressiveness was measured using the effective tax rate (ETR), ETR Cash, and book tax difference (BTD). The period analyzed is from 2017 to 2020, and the statistical method applied was multiple linear regression for panel data with random effects. The results show that companies that choose to pay their taxes in installments tend to take a more aggressive tax position. The evidence contributes to extending the theory of the determinants of tax aggressiveness and can help the government in its inspections and in improving tax installment offers and tax benefits.