Business Commons^™

Unraveling The Effects Of Transfer Pricing Documentation Regulation: Indonesia’ Evidence, Anggari Dwi Saputra

Jurnal Akuntansi dan Keuangan Indonesia

To counter tax avoidance using transfer mispricing practices, Indonesia introduced a transfer pricing documentation policy. This policy requires taxpayers to be transparent with their transfer pricing decisions. Treating the implementation of this policy as a shock to the taxpayers, this paper examines how the transfer pricing documentation policy affects a firm's tax avoidance behaviour by employing regression discontinuity design and difference-in-difference. Immediately after introducing the policy, a regression discontinuity analysis results indicate a 0.9 percentage point increase in tax/sales among taxpayers obligated to prepare transfer pricing documentation. A 0.3 to 0.7 percentage point increase in the tax/sales of the treatment …

Climate Policy Uncertainty And Corporate Tax Avoidance, Md Ruhul Amin, Akinloye Akindayomi, Md Showaib Rahman Sarker, Rafiqul Bhuyan

School of Accountancy Faculty Publications and Presentations

Highlights

• This study investigates the relation between climate policy uncertainty and corporate tax avoidance.

• Firms undertake aggressive tax avoidance strategies during periods of heightened climate policy uncertainty.

• Further analysis indicates that cash savings from lower tax payments are used to pay dividends and not retained for reinvestment.

• Findings are consistent with the precautionary hypothesis that firms become more (i) conservative in their long-term investment strategies and (ii) risk-averse during periods of elevated climate policy uncertainty.

Abstract

This study examines the relation between climate policy uncertainty and corporate tax avoidance. Using a novel measure of climate policy uncertainty (CPU), we document …

The Impact Of Stakeholder Orientation On Tax Avoidance: Evidence From A Natural Experiment, Gary Chen, Ani Manakyan Mathers, Bin Wang, Xiaohong Wang

Finance Faculty Research and Publications

We study the effect of stakeholder orientation on corporate tax avoidance. Using the staggered passage of constituency statutes across U.S. states between 1983 and 2006, we show that greater stakeholder orientation results in increased tax avoidance. We further find greater tax avoidance among firms with limited financial resources and that employees benefit from the change. Our results are consistent with stakeholder salience theory that resource-constrained managers prioritize the claims of salient stakeholders, such as employees, at the expense of secondary stakeholders, such as the government.

Postmaterialism And Corporate Tax Avoidance, Jiwei Wang, Jiwei Wang, Kangtao Ye

Research Collection School Of Accountancy

Using a proprietary dataset of China tax audits, we found that firms owned by investors from countries with higher postmaterialism values were less likely to engage in tax-avoidance behavior in China. In addition, we found some evidence that the negative association between postmaterialism and tax avoidance is more pronounced when tax enforcement is stronger, indicating that national culture and formal institutions act as complements. To check the external validity of our main results, we further used a cross-country sample from 21 countries over 22 years. The evidence from the cross-country sample was consistent with the findings obtained from the China …