Journal ArticleDOI
Does Tax Enforcement Disparately Affect Domestic versus Multinational Corporations Around the World
TLDR
This article examined whether there is a differential relation between changes in enforcement spending and the tax avoidance of domestic versus multinational entities using OECD data on 47 countries from 2005 to 2013, finding that increases in home-country enforcement spending are related to less firm-level tax avoidance for domestic firms relative to multinational entities.Abstract:
Global tax enforcement has received increased attention since the Financial Crisis, with much stated focus on curbing perceived harmful tax practices of multinational entities. Yet multinationals can avoid tax in multiple countries whereas domestic firms cannot. We therefore examine whether there is a differential relation between changes in enforcement spending and the tax avoidance of domestic versus multinational entities. Using OECD data on 47 countries from 2005 to 2013, we find increases in home-country enforcement spending are related to less firm-level tax avoidance for domestic firms relative to multinational entities. Although we find no differential relation between changes in tax enforcement and home-country tax avoidance between multinational and domestic firms, multinationals increase their tax avoidance in foreign countries when home-country enforcement increases, which allows them to maintain a consistent level of worldwide tax avoidance. Results are robust to multiple measures of tax enforcement and avoidance across multiple countries and databases.read more
Citations
More filters
Posted Content
Public Tax-Return Disclosure
TL;DR: The authors investigate the consequences of public disclosure of information from company income tax returns filed in Australia and find that investors react negatively to anticipated and actual disclosure of tax information, most likely due to anticipated policy backlash rather than consumer backlash or the revelation of negative information about cash flows.
Posted Content
Corporate Tax Avoidance and Industry Concentration
TL;DR: This paper investigated the influence of corporate tax avoidance on industry concentration in the U.S. since the mid-1990s and found a positive and causal impact of CTA on firm-level sales using three alternative identification strategies.
Journal ArticleDOI
Patent Concentration, Asymmetric Information, and Tax-Motivated Income Shifting
Harald Amberger,Benjamin Oßwald +1 more
TL;DR: In this article, the relation between patent concentration and tax-motivated income shifting is studied. And the results suggest that patent concentration shapes an MNC's incentives to shift income via patents.
Journal ArticleDOI
Monitoring and Tax Planning – Evidence from State-Owned Enterprises
TL;DR: In this paper, the authors provide new evidence on the association of state ownership and tax planning and show that shareholders' monitoring incentives affect a firm's tax planning. But they do not consider the effect of state owners directly benefiting from state-owned enterprises' (SOEs) income tax payments.
Journal ArticleDOI
How does mandatory IFRS adoption affect tax planning decision? Evidence from tax avoidance distributions
TL;DR: In this article , the authors investigated whether IFRS adoption affects corporate tax avoidance and how the impact of IFRS varies with country-level institutions, and they found that firms with a lower (higher) initial level of tax avoidance tend to be more tax aggressive after adopting the International Financial Reporting Standards (IFRS).
References
More filters
Journal ArticleDOI
Influential Observations and Inference in Accounting Research
TL;DR: In this article, the effects of influential observations in capital market accounting research (CMAR) studies were investigated using robust regression and robust regression was shown to outperform winsorization and truncation, especially in the presence of unusual or infrequent economic events that are correlated with the dependent and independent variables of interest.
Journal ArticleDOI
The Effect of Repatriation Tax Costs on U.S. Multinational Investment
TL;DR: In this paper, the authors investigated whether the U.S. repatriation tax affects foreign investment and found that the locked-out cash due to repatriation costs is associated with a higher likelihood of foreign (but not domestic) acquisitions.
Journal ArticleDOI
Taxes and Financial Constraints: Evidence from Linguistic Cues
Kelvin Law,Lillian F. Mills +1 more
TL;DR: In this article, a measure of financial constraints based on firms' qualitative disclosures was used to find that financially constrained firms pursue more aggressive tax planning strategies as evidenced by: (1) higher current and future unrecognized tax benefits, (2) lower short-and long-run current and effective tax rates, (3) increase in tax haven usage for their material operations, and (4) higher proposed audit adjustments from the Internal Revenue Service.
Journal ArticleDOI
Does a common set of accounting standards affect tax-motivated income shifting for multinational firms?
TL;DR: In this article, the adoption of IFRS by individual affiliates of multinational entities (MNEs) for unconsolidated financial reporting facilitates tax-motivated income shifting, and the authors find that the increase in the arm's length range of book profits reported by potential IFRS benchmark firms following affiliate adoption of FCA is statistically and economically significant, relative to pre-adoption and non-adopter affiliate years.