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Full-Text Articles in Business
Why Do Publicly Listed Firms Evade Taxes: Evidence From China, Travis Chow, Bin Ke, Hongqi Yuan, Yao Zhang
Why Do Publicly Listed Firms Evade Taxes: Evidence From China, Travis Chow, Bin Ke, Hongqi Yuan, Yao Zhang
Research Collection School Of Accountancy
Taking advantage of the mandatory disclosure of detected corporate tax evasions in China, we examine why publicly listed firms evade taxes. Different from most prior studies that focus on corporate income tax avoidance, we consider tax evasions related to both income taxes and non-income taxes. We also use a bivariate probit model to account for the partial observability of corporate tax evasion. Many of our regression results using the bivariate probit model are different from the results using the reduced form probit model that ignores the partial observability of tax evasion. Many of our results are also different from those …
Customer-Supplier Relationships And Corporate Tax Avoidance, Ling Cen, Edward L. Maydew, Liandong Zhang, Luo Zuo
Customer-Supplier Relationships And Corporate Tax Avoidance, Ling Cen, Edward L. Maydew, Liandong Zhang, Luo Zuo
Research Collection School Of Accountancy
We investigate whether firms in close customer-supplier relationships are better able to identify and implement tax avoidance strategies via supply chains. Consistent with our prediction, we find that both principal customers and their dependent suppliers avoid more taxes than other firms. Further analysis suggests that principal customers and dependent suppliers likely engage in tax strategies involving shifting profits to tax haven subsidiaries. Moreover, tax benefits appear to explain both principal customer firms’ and dependent supplier firms’ organizational decisions. Overall, our study provides evidence of the importance of tax avoidance as a source of gains from these relationships.