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Corporate In-House Human Capital Investment In Tax Planning, Xia Chen, Qiang Cheng, Travis K. Chow, Yanju Liu
Corporate In-House Human Capital Investment In Tax Planning, Xia Chen, Qiang Cheng, Travis K. Chow, Yanju Liu
Research Collection School Of Accountancy
In-house human capital tax investment is a significant input to a firm’s tax decisions. Yet,due to the lack of data, there is little empirical evidence on how corporate in-house taxdepartments are associated with tax planning and compliance outcomes. Using handcollected data on corporate tax employees in S&P1500 firms over the period 2009-2014, wefind that in-house tax planning investments lead to greater tax avoidance, in-house taxcompliance investments lead to lower tax risk, while general tax investments achieve bothgoals. We obtain the same inferences when controlling for endogeneity or using changespecifications. We also find that the effects of in-house tax investments are …
Corporate In-House Human Capital Tax Investments, Xia Chen, Qiang Cheng, Travis Chow, Yanju Liu
Corporate In-House Human Capital Tax Investments, Xia Chen, Qiang Cheng, Travis Chow, Yanju Liu
Research Collection School Of Accountancy
In-house human capital investment in the tax function is a significant input to a firm’s tax planning. Yet, due to lack of data, there is little empirical evidence on whether corporate in-house tax departments are associated with effective tax planning. We examine this issue using hand-collected data on corporate tax employees in S&P1500 firms. We find that firms with larger in-house tax departments are more effective in tax planning: they have lower tax rates, report lower uncertain tax benefits, and exhibit less volatile tax rates. The results are stronger for firms with in-house tax departments that have a higher proportion …