Private firms’ tax aggressiveness and lightweight pre-tax-audit interventions by the tax administration

Autor: Hannu Ojala, Pekka Malo, Esko Penttinen
Přispěvatelé: Department of Accounting, Department of Information and Service Management, Aalto-yliopisto, Aalto University
Rok vydání: 2023
Předmět:
Zdroj: Journal of International Accounting, Auditing and Taxation. 51:100550
ISSN: 1061-9518
Popis: Funding Information: We are grateful to the Finnish Tax Administration for access to data and for their support during the research project. We thank the Editor-in-Chief and two anonymous reviewers for their highly constructive comments that significantly improved the manuscript. We are grateful for the valuable feedback from the participants of the Annual Conference of the European Accounting Association in 2021, the Workshop on European Financial Reporting in Wien in 2019, and the research seminars held at Brunel University and at Kingston University in 2021. For financial support, we thank the Foundation of Helsinki School of Economics (grant 14-2837). As always, all remaining errors are ours. Publisher Copyright: © 2023 The Author(s) This study examines private companies’ tax aggressiveness and its changes in response to interventions by the government tax administration. While scholars have researched authorities’ interventions extensively, this study is the first to consider the “light” technique of tax adjustments made by the tax administration immediately after the firm submits its tax return. We utilized a large-scale proprietary dataset obtained from Finland's tax administration (covering 85,155 firm–years), the hypotheses addressed the relationship between the firm's level of tax aggressiveness and the tax-administration intervention (H1) and that between the intervention and companies’ response to it (H2). The empirical findings support both hypotheses. Its lightweight nature notwithstanding, the pre-tax-audit intervention can serve as a tool for ameliorating firms’ overly tax-aggressive behavior. Finally, we present management implications that should be of interest to tax administrations and regulatory authorities, related to the potential effectiveness of a tax administration's monitoring processes in mitigating the tax aggressiveness of private companies.
Databáze: OpenAIRE
Externí odkaz: