Tax Planning Research Articles

Data Breach Notification Laws and Corporate Tax Planning

ABSTRACTThis study explores the impact of data breaches on corporate tax planning in the United States. The results reveal that when a firm's headquarter is located in a state that has adopted a data breach notification (DBN) law, there is a significant 3.8% decrease in the long‐term effective tax rate. This reduction translates to annual tax savings of approximately $8.13 million. Furthermore, tax sheltering is found to decrease by 19.17% compared to the sample average. These effects are particularly pronounced in financially constrained firms and those operating in high‐tech industries. The findings suggest that after the introduction of mandatory data breach disclosure requirements, firms are less inclined to engage in aggressive tax avoidance practices, which could otherwise lead to increased litigation costs. Instead, they prioritize efficient tax planning strategies to improve after‐tax cash flows.

Effect of Selected Board Attributes on Tax Aggressiveness of Quoted Insurance Companies in Nigeria

The main objective of this study is to examine the effect of selected board attributes on tax aggressiveness of quoted insurance companies in Nigeria. Specifically, the study examines the combined effect of female directors and board financial expertise on tax aggressiveness of quoted insurance companies in Nigeria. Tax aggressiveness was measured using effective tax rate while female directors and financial expertise were measured using proportion of female directors on the board to the total number of independent directors and proportion of financial experts on the board to the total number of independent directors respectively. This study uses the longitudinal research design. The population of the study is the entire twenty-three listed companies in the Nigerian insurance sector. The sample size of twenty-two was selected after eliminating one without complete data. Data were sourced from the annual financial statements of the listed insurance companies for the period 2011-2022. To be able to examine the effect of female directors and financial expertise on tax aggressiveness, the study used panel multiple regression model for the analysis. The result of the study shows that female directors have negative and insignificant effect on tax aggressiveness. However, the study finds statistical evidence which suggests that boards financial expertise has significant effect on tax aggressiveness in the insurance sector. From the findings, it was concluded that board attributes have strong explanatory power on tax aggressiveness. The study recommends that since management could aspire to avoid more taxes, because they estimate the tax benefits too high, more external board members with accounting and corporate reporting knowledge should be admitted on the boards to curtail managerial aggressive tax planning.

Taxes under stress: bank stress tests and corporate tax planning

PurposeThis paper aims to examine how bank stress tests affect bank tax planning.Design/methodology/approachThe study uses US bank stress test bank size thresholds and a regression discontinuity design to investigate the effect of the Dodd-Frank Act and the instituted bank stress tests on bank tax planning. We use different measures of tax planning, including bank-specific measures and measures of tax avoidance, tax aggressiveness, and effective tax planning from recent literature. Our regression discontinuity and difference-in-differences regression analyses include bank and year fixed-effects and lagged bank characteristics to control for potential endogeneity.FindingsThis study finds that stress tests have the unintended consequences of intensifying tax planning and increasing tax avoidance. Stress-test banks increase tax avoidance by accelerating charge-offs, net interest, and non-interest expenses. However, this increase in tax planning is not optimally maximized, leading to lower effective tax planning compared to non-stress-test banks. Banks with a substantial increase in tax avoidance under the Dodd–Frank Act tend to increase their risk, investing in high-risk-weight assets and lending in riskier loan categories. These findings are consistent with tax minimization conditions under added regulatory attention and policy uncertainty.Originality/valueLiterature on bank tax planning is limited. Most tax avoidance literature excludes financial institutions such as bank holding companies mainly due to differences in business practices and regulatory frameworks. This study is the first to investigate tax planning behavior among US banks. The current study thus extends the research field by examining the effect of bank transparency regulations, such as bank stress tests, on bank tax planning activities. Our findings have a direct bank policy implication. They show that stress testing has the unintended consequences of increasing tax planning activities and consequently increasing risk-taking on banks with high tax avoidance, which goes against the goals of stress testing regulations.

Pengaruh Sustainability Report (SR), Corporate Social Responsibility (CSR) Dan Leverage Terhadap Tax Advoidance

Tax avoidance, especially if done through tax planning, is a legitimate way to reduce taxes while still complying with tax rules. This study aims to determine the influence of leverage, sustainability report (SR), and corporate social responsibility (CSR) on tax avoidance. Secondary data is one type of data used in this quantitative research procedure. Samples were taken from nineteen mining companies listed on the Indonesia Stock Exchange (IDX) and produced 94 samples between 2018 and 2022. IBM SPSS 26 software was used as a test tool in this study. Sampling was done using purposive sampling techniques

The impact of asset specificity on corporate tax avoidance: Do financial constraints and product market power matter?

Our findings reveal that asset specificity significantly enhances corporate tax avoidance, with firms exhibiting lower cash effective tax rates. Firms with higher asset specificity also engage in more aggressive tax avoidance strategies, including tax dodging and long-term tax planning. Additionally, our analysis indicates that the positive impact of asset specificity on tax avoidance is less pronounced in firms with lower ESG performance but is more pronounced in those facing negative demand shocks or operating during periods of economic policy uncertainty. We also find that financial constraints and product market power mediate the relationship between asset specificity and tax avoidance, with financial constraints serving as the dominant economic channel. These findings offer new insights into the factors driving corporate tax avoidance and highlight the complex interplay between asset specificity, financial constraints, product market power, and tax planning strategies.

Article: Is the Privilege Too Privileged? the Orde van de Vlaamse Balies Case Revisited

The objective of this article is to analyse the concept of the legal professional privilege in the field of taxation. First, the Orde van de Vlaamse Balies case is examined in which the CJEU struck down an element of the mandatory disclosure regime contained in the fifth amendment to the Directive on Administrative Cooperation (DAC 6) as it was considered a disproportionate infringement of the legal professional privilege. The article challenges whether the CJEU was correct in simply further developing its own and the ECtHR’s precedence to reach the conclusion that all activities of lawyers as targeted by the DAC 6 fall within the scope of the strengthened protection of legal professional privilege. Additionally, it is concluded that the CJEU insufficiently took into account the DAC 6’s broader goals. Next, the article investigates ethical considerations concerning legal professional privilege, discussing particularly how it should be delineated in the field of taxation. The article concludes that the scope of legal professional privilege should not be expanded to include the activities of lawyers in tax planning.

Personal Tax Planning: Grin and Bare It—The Recent Kerfuffle over Bare Trusts

Personal Tax Planning: Grin and Bare It—The Recent Kerfuffle over Bare Trusts

Corporate Tax Planning: Making Sense of Canada's Clean Energy Investment Tax Credits

Corporate Tax Planning: Making Sense of Canada's Clean Energy Investment Tax Credits

The Effect of Independent Commissioners and Capital Intensity on Tax Planning

This study aimed to examine the effect of independent commissioners and capital intensity on tax planning by manufacturing companies in the consumer goods industry sector listed on the Indonesia Stock Exchange 2020-2023. This study has a sample of 40 consumer goods industry manufacturing companies listed on the Indonesia Stock Exchange (IDX) with predetermined criteria during the 2020-2023 period. The independent variables of this study are independent commissioners and capital intensity. The dependent variable in this study is tax planning, which is measured using ETR. This study uses secondary data from the company's financial statement and annual report. The analysis used in this study is panel data regression with the EViews-12 program. Partially, the results show that independent commissioners and capital intensity do not affect tax planning.

The Effect of Tax Planning, Leverage, and Profitability on Firm Value in the Consumer Goods Industry Sector Listed on the Stock Exchange Indonesia Year 2019-2023

This study aims to determine the effect of Tax Planning, Leverage and Profitability on Company Value in the Consumer Goods Industry Sector Listed on the Indonesia Stock Exchange in 2019-2023. The population in this study is the Consumer Goods Industry Sector listed on the Indonesia Stock Exchange as many as 51 companies with a research period of 5 years (2019-2023) and obtained a research sample of 17 companies, using purposive sampling method. Based on the results of the t test, it can be seen that the t count on the Tax Planning variable is -1.774 < t table of 1.664 with a probability of t, namely sig 0.08> 0.05. Based on this value, the Tax Planning variable has no effect and is significant to the Company's Value. t test results can be seen that the t count on the Tax Planning variable is -1.774 < t table of 1.664 with a probability of t, namely sig 0.08> 0.05. Based on this value, the Tax Planning variable has no effect and is significant to the Company's Value. In the Leverage variable of -2.189 < 1.664 with a probability t, namely sig 0.03 < 0.05. Based on this value, the leverage variable has a negative and significant effect on firm value. On the profitability variable of 3.184> 1.664 with a probability t, namely sig 0.02 <0.05. Based on this value, the profitability variable has a positive and significant effect on firm value.

Does Firm Size Buffer Tax Aggressiveness? Examining Financial Distress and Capital Intensity

This study investigates the relationships between financial distress, capital intensity, and tax aggressiveness, focusing on the moderating role of firm size. Utilizing a sample of property and real estate companies listed on the Indonesia Stock Exchange from 2021 to 2023, the research employs quantitative methods to analyze the influence of financial distress and capital intensity on tax aggressiveness. The findings reveal that financial distress significantly increases tax aggressiveness, indicating that firms facing economic challenges are more likely to pursue aggressive tax strategies to enhance their cash flow. Additionally, capital intensity is positively associated with tax aggressiveness, as firms leverage their capital assets for potential tax benefits. However, the study finds that firm size does not significantly moderate the relationships between financial distress or capital intensity and tax aggressiveness, suggesting that the effects of these variables are consistent across different firm sizes. These results underscore the complex dynamics of corporate tax behavior and highlight the need for firms to carefully consider their tax strategies in the context of financial conditions and capital structure. The research contributes to a deeper understanding of tax aggressiveness in emerging markets and provides implications for corporate managers and policymakers regarding tax planning and regulation

Gestión tributaria y recaudación de tributos municipales en una municipalidad distrital de Loreto

The objective of the research was to establish the relationship between tax management and the collection of municipal taxes in a district municipality of Loreto. The methodology was quantitative, applied, non-experimental-cross-sectional and correlational, a questionnaire validated by expert judgment was administered to 40 employees of the tax administration management and sub-management of collections of the municipality, through the survey, allowing data collection. The results showed that the values of the sig. bilateral are 0.000, 0.000 and 0.000, they are lower than the 0.05 threshold. This proves that tax management, tax planning, transparency and accountability are significantly related to the collection of municipal taxes. However, taxpayer service and municipal tax collection are not related (sig. 0.520). It was concluded that tax management is significantly and highly related to the collection of municipal taxes in the district municipality of Loreto, 2023. This responds to the fact that efficient tax management is reflected in the capacity of the municipality to administer and collect taxes. in an appropriate and timely manner. This implies that the adoption of effective collection systems and fair application of tax rates are essential for management.

Analisis Pengaruh Beban Pajak Kini, Beban Pajak Tangguhan, dan Perencanaan Pajak Terhadap Manajemen Laba

This research aims to determine empirically the influence of current tax burden, deferred tax burden and tax planning on earnings management in automotive companies listed on the Indonesia Stock Exchange (BEI). during the 2018-2022 period. The research method used is a quantitative research method. The data used is secondary data, namely financial reports listed on the Indonesia Stock Exchange (BEI) in 2018-2022. The sample was selected using the purposive sampling method. Based on predetermined criteria, there were 6 automotive companies listed on the Indonesia Stock Exchange (BEI) in 2018-2022. The analysis techniques used in this research are descriptive statistical analysis, panel data regression model testing, classical assumption testing, panel data linear regression testing, and hypothesis testing. The results of this research show that current tax burden and tax planning have an effect on earnings management, while deferred tax burden has no effect on earnings management. Then research simultaneously current tax burden, deferred tax burden, and tax planning influence on earnings management.

Transformation of Traditional Corporate Tax Planning into AI-Driven Corporate Tax Planning

Corporate tax planning has traditionally relied on manual processes and expert judgment to minimize tax liabilities. However, the rise of artificial intelligence (AI) presents new opportunities to transform these practices through automation, real-time analysis, and predictive capabilities. To conduct this research, a comprehensive review of academic literature, case studies, and existing AI tools in tax planning was carried out. The proposed AI-based tax planning model was developed based on these findings and validated through simulations and expert feedback. The study also examined the process of integrating AI systems with existing corporate tax structures to assess the feasibility and effectiveness of implementation. Results show that AI-driven corporate tax planning significantly enhances accuracy and efficiency compared to traditional methods. The AI model provides real-time analysis and predictive insights, enabling businesses to optimize tax strategies while ensuring compliance with evolving regulations. Tax authorities also benefit from AI implementation, gaining more transparent and equitable tax structures, along with stronger supervision capabilities. The proposed model can be developed into customized software tailored to individual companies, seamlessly integrating with existing corporate systems. These findings indicate that AI has the potential to revolutionize corporate tax planning by streamlining tax management and optimizing outcomes. For businesses, AI enables personalized tax strategies that adapt to specific data and regulations, improving both compliance and long-term tax optimization.

Consideration of the Application and Risk Prevention of VAT Tax Rebate Policy for Construction Enterprises at the End of the Period

The “Announcement on Deepening the Value-Added Tax Reform” clearly outlines the preferential policy regarding incremental retention tax rebates. With the advancement of value-added tax (VAT) reform and the improvement of VAT legislation in China, VAT tax planning for construction enterprises, particularly related to retained tax credits, has become routine. This paper, focusing on the characteristics of construction enterprises, analyzes VAT retained tax credits at the end of the period, the status of tax refunds, practical issues, and related processes, and offers suggestions for policy application and risk prevention.

Leveraging AI-Driven financial literacy and tax compliance solutions to foster economic growth in underserved communities and small businesses

Underserved communities and small businesses face significant challenges in financial literacy and tax compliance, both of which are critical to economic stability and growth. Limited access to financial education and the complexities of tax systems create barriers that hinder these groups from fully participating in the formal economy. This review explores the potential of leveraging artificial intelligence (AI) to address these challenges by providing innovative solutions that enhance financial literacy and simplify tax compliance. AI-driven platforms can offer personalized financial education, using machine learning algorithms to identify knowledge gaps and provide tailored resources to users. Through gamification and interactive tools, AI can make financial education more engaging and accessible, especially for individuals with limited formal education. Furthermore, AI-powered virtual assistants and chatbots can guide users through essential financial decisions, improving budgeting, credit management, and savings habits. In the realm of tax compliance, AI solutions can automate bookkeeping, tax filings, and other administrative tasks, reducing human error and lowering the compliance burden on small businesses. Predictive analytics can assist in tax planning by forecasting liabilities and helping businesses make informed decisions that minimize tax penalties and maximize cash flow. These advancements empower small businesses and entrepreneurs by enabling better financial management, fostering trust in the financial system, and facilitating access to funding opportunities. By integrating AI-driven financial literacy and tax compliance solutions, underserved communities and small businesses can unlock their economic potential, contributing to broader economic growth and financial inclusion. However, challenges such as data privacy, digital access, and regulatory concerns must be addressed to ensure equitable implementation of these technologies. The review concludes that with careful consideration of these factors, AI can be a powerful catalyst for sustainable economic development. Keywords: Leveraging AI-Driven, Financial Literacy Tax Compliance Small Businesses

Collusion or supervision? Between auditor and audit firm – tax planning’s perspective

PurposeThis study aims to investigate the impact of auditor industry specialization (AIS) on clients’ tax planning at the audit firm level and individual auditor level, respectively.Design/methodology/approachThe study’s sample consists of 44,637 firm-year observations of Chinese firms listed on the Shenzhen and Shanghai Stock Exchanges during the period from 2002–2020. The data are collected from the Taiwan Economic Journal. Panel regression is used to test hypotheses. Additionally, a two-stage least squares model is used to address concerns about possible endogeneity.FindingsThe relationship between tax planning and AIS is significantly positive at the audit firm level, while it is significantly negative at the individual auditor level.Originality/valueThe authors use manually collected data to investigate the distinct impacts of two AIS metrics on tax planning: the number of clients and the scale of clients.

Pengaruh Perencanaan Pajak dan Penghindaran Pajak terhadap Nilai Perusahaan dengan Tranparansi Sebegai Variabel Moderasi (Studi Kasus pada Perusahaan Sektor Kuangan yang Terdaftar di Bursa Efek Indonesia dengan Transparansi Informasi Sebagai Variabel Moderasi)

The study aims to empirically examine and prove how tax planning and tax avoidance affect firm value, with information transparency as a moderating variable. This research utilizes a quantitative approach applied through causal research methods. The sample was selected using purposive sampling technique, and data analysis was performed using Eviews 12 software. The sample consists of 48 data points from 16 financial sector companies listed on the Indonesia Stock Exchange for the period 2020-2022. The data analysis technique employs multiple regression analysis and moderated regression analysis (MRA). The results of this study indicate that tax planning has no effect on firm value. Tax avoidance does not impact the value of the company. Information transparency can strengthen the effect of tax planning on firm value, and information transparency can enhance the impact of tax avoidance on a company's value.

"Tax optimization" and its difference from "tax planning"

The article clarifies the content and relationship between the concepts of «tax optimization» and «tax planning». The criteria for distinguishing these concepts are determined. It is established that tax planning is a multi­stage process which includes both strategic forecasting and careful organization of tax liabilities at each level of business. The main goal of this process is to be able to shape the structure and form of the business in such a way that they are optimal from the taxation point of view. Tax planning primarily determines the choice of a business entity’s strategy. Tax planning is defined as an important element of a company’s strategic management aimed at long-term and comprehensive management of tax liabilities. Tax optimization is an important process aimed at adapting the taxpayer to the peculiarities of the current tax system in order to choose the most profitable and efficient taxation regime. This process is not limited to the passive application of tax rules, but involves the active management of tax liabilities within the limits of legally permissible techniques, means and methods. Tax optimization is not only the ability to choose the most favorable conditions from those offered by the legislator, but also the ability to predict and adapt to changes that may affect the tax burden in the future. Tax optimization as a legal tool for reducing the total tax burden is considered exclusively within the framework of legal actions of the taxpayer. A distinctive feature of tax optimization as compared to tax planning is its focus on achieving short- and medium-term goals of a business entity by directly using the opportunities provided by tax legislation. Tax planning, on the other hand, is an element of strategic management aimed at achieving the long-term strategic goals of a business entity. Tax optimization is aimed at developing the most favorable model for fulfilling tax obligations by a business entity without changing the economic substance of business transactions. This approach allows the taxpayer to flexibly adapt to changes in the tax environment, while maintaining the sustainability of financial results and reducing tax costs. Tax optimization is not just a tool for reducing the tax burden, but also an important element of tax planning.

Analisis Penerapan Tax Planning Dalam Mengefisiensikan Beban Pajak Penghasilan Pada PT Sentra Daya Madani

The research aims to analyze application of tax planning in efficiency PT Sentra Daya Madani income tax burden. This research used a descriptive method. Data collection techniques were carried out using documentation, interviews and a literature study. Analysis data by analyzing the commercial financial statement, reconciling fiscal, analyzing fiscal income statement, and making tax planning. The results of this research show that PT Sentra Daya Madani has implemented tax planning, but it has not been optimal, so that the payment of the tax owed is not yet efficient. There are still gaps that can be implemented or exploited to streamline the tax burden paid. The application of tax planning in this research can streamline the tax burden of IDR 9,089,693.