The Determinants of Tax Avoidance within Corporate Groups: Evidence from Moroccan Groups

Dayday Anouar

doi:10.11648/j.ijefm.20170501.15

Abstract

This paper examines the major tax avoidance determinants within the corporate groups, based on a hand-collected sample of 45 publicly-listed Moroccan corporate groups, over the 2011–2015 period. The literature review indicate that there are several practices of Moroccan corporate groups, used to reduce their tax liabilities, specially, we find, Group size, Intra-group transactions, Profitability, Intangible Assets, Debts, and Multinationality. Finally, our regression results show that only the multinationality, intra-group transactions and Debts are used to maximize tax avoidance opportunities, therefore to reduce the group’s tax liabilities.

Highlights

Taxation was always considered as a Tax burden which blocked the development of companies
Our objective is to evaluate the impacts of tax avoidance determinants on the tax liabilities of the groups, while using the effective tax rate (ETR) as a tax avoidance measure
This study contributes to the development of research on the taxation of corporate groups [17], [26], [19], [20], and this is through the construction of a tax avoidance measure within groups, at the end, our study provides a global view on how the Moroccan listed groups engage in tax avoidance

Summary

Introduction

Taxation was always considered as a Tax burden which blocked the development of companies. Taxation has become the main concern of all companies This new trend encourages companies to adopt a more active and dynamic attitude towards their tax management, and this through the tax avoidance practices which constitute for the company a real lever of success and financial performance. The economic literature is very rich of studies on corporate taxation in general, while there is just little work on the question of tax avoidance within corporate groups . Abudlrazaq [5] and Oats [2] have confirmed that tax avoidance is generally considered a legal practice against tax evasion. Killian and Kolitz, [6] have concluded that the tax avoidance is a legal practice because tax legislation is often open to interpretation

Objectives

Methods

Results

Conclusion