Corporate Tax Research Articles

Purpose The objective of this study is to examine the relationship between family chief executive officers (CEOs) and corporate tax avoidance, and to assess the moderating role of board independence in this relationship within the context of Bangladesh, an emerging economy. Design/methodology/approach Based on a sample of the top 100 listed manufacturing companies for the years 2019–2023, the study employs both static and dynamic panel data analysis to derive its findings, underpinning the agency theory and socioemotional wealth theory. Findings The empirical results reveal a positive and statistically significant association between the presence of family CEOs and the level of tax avoidance, suggesting that family CEOs are more inclined to engage in aggressive tax planning. The analysis also indicates that board independence significantly moderates this relationship by constraining such behavior. Notably, the moderating effect of board independence becomes ineffective when family CEOs possess political affiliations, implying that political connections may override internal governance mechanisms. Practical implications The findings underscore the importance of robust regulatory frameworks and enhanced board independence in mitigating tax avoidance in family-run firms. This is particularly relevant for policymakers and regulators seeking to improve corporate governance and tax compliance in emerging markets. Originality/value To the best of the authors’ knowledge, this is the first study to empirically investigate the role of family CEOs in tax avoidance behavior in Bangladesh. The inclusion of board independence as a moderating variable adds novel insights into governance dynamics within family-owned enterprises in developing economies.

We study the pass-through of corporate taxes into consumer prices, leveraging 1,058 municipal tax rate changes affecting 4,754 German firms. A 1 p.p. increase in a producer’s tax rate raises retail prices by 0.3% on average, consistent with imperfectly competitive producers. Product-level pass-through varies substantially, as it increases in destination-specific product and retailer-category market shares. We find little evidence linking heterogeneous passthrough to differences in retailer efficiency as reflected in relative consumer prices. Instead, our findings align with standard non-CES preferences where pass through increasing with market shares implies weaker strategic complementarities in price setting than when this relationship is reversed.

Doctrinal legal research remains the principal methodology in legal scholarship, particularly for studies exploring corporate tax governance frameworks. This conceptual article rigorously investigates the doctrinal methodology's foundational role in analyzing complex tax regulatory systems and legal compliance mechanisms within corporate contexts. Utilizing a systematic doctrinal framework, the study deploys primary legal sources, including statutes, regulations, and judicial decisions, alongside authoritative secondary materials to examine corporate tax governance structures. This approach demonstrates methodological effectiveness across diverse corporate tax governance domains, revealing strengths in regulatory analysis, compliance framework evaluation, and enforcement mechanism assessment. The methodology provides comprehensive analytical tools for examining various governance instruments, including corporate liability frameworks, stakeholder protection mechanisms, and regulatory accountability structures. The doctrinal research process comprises precise problem identification, extensive legal materials collection, critical evaluation, analytical synthesis, and normative conclusion drawing. While addressing critiques of doctrinalism’s normative orientation and isolation from empirical methods, the study argues for doctrinal research’s essential role in generating rigorous legal analysis and guiding doctrinal innovation. This research thereby reaffirms doctrinal legal methodology’s primacy in legal scholarship and its capacity to yield robust, normative clarity in the study of law.

The Tax Cuts and Jobs Act and Domestic Corporate Tax Rates

Objective: To assess the moderating role of national culture in the relationship between executive variable compensation and tax avoidance. Method: The study population comprised non-financial firms listed on stock exchanges in G-20 countries. The sample consisted of 29,148 firms and 80,891 observations covering the period from 2013 to 2021. Abnormal Book-Tax Differences (ABTD) were used as a proxy for tax avoidance. Data were collected from the Refinitiv Eikon® database, and the analysis was conducted using multiple linear regression, with coefficients estimated through the Ordinary Least Squares (OLS) method. Results: Executive variable compensation is positively associated with tax avoidance. Regarding the moderating effect of national culture dimensions, the findings suggest that the positive relationship between executive variable compensation and tax avoidance is stronger in countries with high levels of individualism, masculinity, and indulgence, and weaker in countries with high power distance, uncertainty avoidance, and long-term orientation. Contributions: The study provides insights for society, executives, and shareholders, offering empirical evidence that may assist in designing more effective compensation schemes to align managerial actions with shareholder interests in corporate taxation strategies.

This study examines the relationship between the effective corporate tax and investment levels in the economy in Nigeria. Using a mixed-methods approach that combines quantitative panel data analysis from 2011 to 2023 across five Nigerian states with a review of theoretical and empirical literature, the research employs econometric techniques including Fully Modified Ordinary Least Squares (FMOLS) to estimate long-run effects. The findings reveal that corporate tax rates have a significant inverse relationship with investment, suggesting that high tax burdens deter private sector investment. The research concludes that well-designed tax reforms can significantly promote economic growth by encouraging investment, improving labour participation, and enhancing industrial competitiveness. It recommends progressive tax structures, reduced reliance on indirect taxes, strengthened tax administration through digitalization, and targeted incentives to support inclusive and sustainable economic development. This study contributes to the existing literature by providing empirical evidence from a developing economy context and offers policy insights for fiscal authorities in Nigeria and similar economies.

Purpose: The study examined the impact of corporate income tax on economic growth in Zambia using the Instrumental Variable (IV) approach. Materials and Methods: The study utilized a quantitative research approach, employing time series data for the period 1994-2023. The data was compiled from various sources. The top statutory corporate and personal income tax rates were obtained from the World Tax Database while the other variables namely, FDI, population growth, education and trade were obtained from the World Development Indicators, compiled by the World Bank. The study employed both OLS and 2SLS using IV Methods to address endogeneity concerns. Findings: The empirical findings show a statistically significant negative impact of CIT on economic growth in Zambia. OLS estimates suggest that higher CIT rates are associated with slower GDP per capita growth, though the magnitude of this effect is relatively small. However, the IV approach yields larger negative coefficients, reinforcing the argument that CIT exerts a substantial adverse effect on economic growth when endogeneity is accounted for. Specifically, the IV results indicate that a 10 percent reduction in the corporate tax rate causes an increase in GDP per capita growth by approximately 1.19 to 1.34 percent. Unique Contribution to Theory, Practice and Policy: The negative impact of CIT on economic growth calls for policymakers to come up with an optimal taxation structure in which taxation of income is not excessive. This is attributed to the effects of a high CIT rate which discourages reinvestment by reducing after-tax profits, limiting the capacity of firms to expand, innovate and/or create jobs. In turn, this dampens productivity and slows overall economic growth. The study recommends that policymakers should consider lowering the CIT rate to encourage business expansion, attract investment and boost job creation.

Reassessing the Effects of Corporate Income Taxes on Mergers and Acquisitions Using Empirical Advances in the Gravity Literature

Tax fraud has been a thorn on the flesh of governments and regulatory bodies across the globe, as it compromises the financial stability and confidence of the citizens. The conventional forms of detection, which are mainly rule based systems and hand audit, tend to be lagging behind the intricacy and bulk of the contemporary corporate filings. This paper will discuss the use of machine learning (ML) technologies in improving the process of detecting tax fraud and risk scoring through the use of advanced data analytics and predictive models. With the help of supervised, unsupervised and hybrid learning, ML models are able to discover the latent patterns and anomalies and come up with risk scores to determine the probability of fraud. The paper examines the current literature on the financial and tax fraud detection, with a specific focus on how these methods have been changing towards adaptive and more data-driven systems instead of being static and rule-based. It further suggests a structure of implementation which takes into consideration data preprocessing, feature engineering and model evaluation in one workflow that is fit to be used by tax authorities and auditing firms. The proposed system makes use of algorithms like Random Forests, XGBoost, and autoencoders to increase the accuracy of detection and minimize the occurrence of false positives. Moreover, the paper emphasizes how explainable AI (XAI) can be important in promoting transparency, interpretability, and adherence to ethical and legal guidelines. Finally, the study proves that the application of the ML-based fraud detection and risk scoring can become a substantial enhancement of the effectiveness, objectivity, and scalability of corporate tax audits. The next step in the work will be to incorporate deep learning, natural language processing, and federated systems to develop strong, privacy-aware frameworks that can be used to detect fraud in real-time in large-scale financial ecosystems.

This study investigates the relationship between audit firm attributes and corporate tax avoidance among listed non-financial firms in Nigeria from 2015 to 2023. Grounded in Agency Theory, Political Cost Theory, and Legitimacy Theory, the research examines how audit firm size, tenure, independence, and industry specialization influence firms’ tax behaviours. Using panel data analysis and drawing on financial statements from 50 purposively selected firms, the study proxies tax avoidance with the effective tax rate (ETR) and applies fixed effects regression to assess the hypothesized relationships. Findings reveal that audit firm size and industry specialization are significantly and negatively associated with tax avoidance, indicating that reputable and specialized auditors help mitigate aggressive tax planning. Conversely, a significant positive relationship is found between audit independence; measured by the ratio of non-audit to total fees; and tax avoidance, suggesting that economic bonding may compromise auditor objectivity. Audit tenure, while positively related to tax avoidance, does not show statistical significance. The study contributes to the literature on audit quality and tax transparency in emerging markets by providing localized empirical evidence. It recommends stricter oversight of non-audit services, promotion of industry expertise, and reforms to audit rotation policies to enhance audit effectiveness in curbing tax avoidance. These insights offer practical implications for regulators, audit practitioners, and corporate stakeholders seeking to strengthen financial integrity and tax compliance in Nigeria.

Corporate tax avoidance is drawing more attention as a growing concern within the ESG (Environmental, Social, and Governance) controversy. Many companies that publicly commit to ethical and sustainable practices are often criticized for using aggressive tax strategies, especially when they are already under scrutiny for ESG shortcomings. This conceptual paper examines the nexus between ESG controversies and corporate tax behavior, arguing that firms implicated in ESG related reputational risks may strategically adjust their tax practices to regain legitimacy. Grounded in legitimacy theory and greenwashing literature, we propose that companies facing ESG backlash might reduce tax avoidance or enhance tax transparency as a reputational repair mechanism. In this way, tax practices can be used as a tool to regain trust from the public, investors, and regulators. By synthesizing existing research, this paper highlights how ESG controversies can influence corporate tax decisions, a relationship underexplored in current literature. The findings call for deeper empirical investigation and policy discourse to bridge the gap between ESG performance and responsible tax conduct. Ultimately, this study underscores the need for corporate accountability, ensuring that firms align their tax strategies with their professed ESG commitments to uphold public and investor trust.

Minimum wage system and corporate tax burden stickiness

Actual controllers with foreign residency rights and corporate tax avoidance: Evidence from private listed companies in China

ABSTRACT Many CEOs are philanthropists who express their passion for social welfare through work with various charities and foundations. However, the consequences of these prosocial behaviors for their firms are unclear. This study investigates whether CEOs’ prosocial tendency, measured by their service on the boards of one or more charities, is associated with corporate tax aggressiveness. We find that firms with CEOs who have prosocial tendency have a lower level of tax aggressiveness than firms with CEOs who do not have this tendency. We further find that financial incentives may diminish the inhibitory effect of CEO prosocial tendency on corporate tax aggressiveness. By contrast, a firm’s positive reputation could strengthen the inhibitory effect of prosocial tendency on tax aggressiveness. Our results provide evidence that CEO prosocial tendency influences a firm’s tax planning and policies. Data Availability: Data are available from the public sources cited in the text. JEL Classifications: D64; H25.

Business tax reform and human capital in service industry firms: Evidence from China

This research is motivated by the tax competition phenomenon, where countries compete to offer attractive tax policies to attract investors and boost national revenue. Two key instruments often employed are Corporate Income Tax (CIT) rate adjustments and tax incentives in the form of tax holidays. The purpose of this research is to analyse the impact of tax competition on CIT rates and tax holiday policies in six ASEAN countries: Indonesia, Malaysia, Thailand, Philippines, Singapore, and Vietnam. Over the past decade, most ASEAN-6 countries have reduced CIT rates and extended the maximum tax holiday period. This research employs a quantitative approach using regression coefficient tests, a reliability analysis model, and determination coefficient values. The findings reveal that tax competition has a positive impact on CIT rates and tax holidays in ASEAN-6. However, the effect on CIT rates is not significant, neither partial nor simultaneity effect. In contrast, tax competition significantly influences tax holiday policies, either a partial or a simultaneous effect. These findings are expected to provide insights into understanding the dynamics of tax competition and its implications for tax policy.

ABSTRACT This study uses the implementation of the Golden Tax Project Phase III (CTAIS-3) in China as a quasi-natural experiment to explore the impact of big data tax enforcement on the corporate tax digital transformation. By constructing the corporate tax digital transformation index and employing the staggered difference-in-differences method, the findings reveal that CTAIS-3 significantly promotes corporate tax digital transformation through compliance and cost effects.

This paper investigates the impact of state ownership on corporate tax avoidance among Vietnamese listed firms during 2015–2022. Drawing on agency theory, the study emphasizes the dual role of the state as both regulator and shareholder, which may either constrain or facilitate tax planning depending on institutional settings. Using 2,350 firm-year observations and applying robust regression techniques to address heteroskedasticity and autocorrelation, the results show that state ownership is negatively associated with tax avoidance, indicating that government shareholders limit aggressive strategies due to reputational and fiscal considerations. Financial leverage also reduces tax avoidance, while firm growth increases it, reflecting different financing incentives and expansion pressures in a transitional market. Audit quality, proxied by Big4 auditors, surprisingly shows a positive relationship, suggesting larger firms may exploit auditor expertise to engage in more sophisticated tax planning, whereas auditor switching has no significant effect. Overall, the findings enrich the literature by providing novel empirical evidence from Vietnam, a frontier market where the state still plays a dominant role in corporate governance. The study contributes to debates on the ownership–tax avoidance nexus, highlights the interplay between capital structure and governance mechanisms, and offers policy implications for regulators seeking to strengthen compliance, enhance transparency, and ensure equitable tax enforcement in emerging economies.

The primary goal of this research is to measure the impact of Capital Intensity (CI), Inventory Intensity (II), Advertising Intensity (AI), and Sales Growth (SG) on corporate Tax Avoidance (TA). The study relies on secondary data analyzed through a quantitative approach, focusing on the numerical evaluation of available data. The sample comprises 19 retail sector companies listed on the Indonesia Stock Exchange (IDX) during 2022–2024. Using purposive sampling with a three-year observation period, the research obtained 57 valid panel data observations that provide a solid basis for statistical analysis. Two main analytical stages were used: descriptive statistics to understand the data and multiple linear regression to test the hypotheses. The results show that: (1) CI significantly influences TA, (2) II significantly influences TA, (3) AI has no significant impact on TA, and (4) SG shows no significant effect on TA. However, an overall test confirms that the combined effect of Capital Intensity, Inventory Intensity, Advertising Intensity, and Sales Growth significantly influences Tax Avoidance, emphasizing the importance of comprehensive considerations in tax management practices within the retail sector sector.

With an increase in the basic income tax rate from 2025, organisations are faced with the task of ensuring the tax security of profit taxation in the context of innovative economic development, allowing taxpayers and tax authorities to effectively use innovative technologies in their activities. The purpose of this article is to find tools that can be used to optimise the profit taxation process and increase tax security. The subject of the study are investment tax deductions and ensuring economic security when applied in the context of innovative economic development. The focus of this article is on investment tax deductions as the most complex tools to reduce corporate income tax. The article uses methods of a systematic approach, analysis, and synthesis. As a result of the conducted research, it has been concluded that an individual approach by taxpayers is necessary in terms of the possibility and expediency of applying investment tax deductions, realistically assessing potential risks and tax savings. Using the example of specific paint and varnish industry organisations, calculations have been performed that allow taxpayers to make effective management decisions and ensure tax security. The presented calculations can be applied by organisations of various fields of activity. The authors have concluded that the criteria requirements for the use of investment tax deductions limit the practice of their application. The results of the study can be used in developing solutions to ensure tax security in the taxation of corporate profits. The conclusion is made about the need for further development of incentives for investment activities of organisations.