Visualization of World-Scale Evidence on Tax Avoidance and Tax Rate Convergence

Abstract

Purpose Firm tax avoidance has gathered substantial public attention in both practice and academic literature. We study tax avoidance among firms and countries using the visualization of accounting data of all of listed firms from 148 countries from 1985 to 2015. Design/methodology/approach Over 30 years of financial data on all listed firms from 148 countries and provides world-scale evidence on tax avoidance and tax rates convergence. The research design uses exploratory data analysis and reproducible research using data visualization tools, namely, R with dplyr, ggplot2, and googleVis (Geo Chart and Motion Chart). Findings We provide world-scale evidence on (1) firms’ tax avoidance, showing a non-random distribution of firms’ effective tax rates and return on assets using visualization from 1985 to 2015, and (2) downward convergence trend of firms’ effective and statutory tax rates among 58 countries over the past 20 years. Originality/Value This study makes two key contributions to the literature. First, this is the first to provide world-scale evidences on the tax avoidance and convergence trends of tax rates. Second, we use the visualization method, which allows easily understanding of what is happening around the world. Research Implications Our results highlight the tax avoidance issue, which can no longer be ignored, and facilitate a collaborative discussion between non-specialists and professionals with objective evidence from visualization.