Are Private Firms Really More Tax Aggressive Than Public Firms ?

Pierk, Jochen (2016) Are Private Firms Really More Tax Aggressive Than Public Firms ? WU International Taxation Research Paper Series, 2016-02. WU Vienna University of Economics and Business, Universität Wien, Vienna.


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This paper tests the notion that private firms are more tax aggressive than public firms. Tax avoidance measures, e.g. effective tax rates, cannot be used to compare private and public firms when private and public firms have different levels of importance on financial accounting earnings (Hanlon and Heitzman 2010). To disentangle financial reporting incentives from tax aggressiveness, I use the fact that European groups must prepare two sets of financial statements: first, group statements (consolidated), which provide information to investors, and, second, individual statements (unconsolidated), which are used for legal purposes, but not to inform investors. Since in individual statements financial reporting incentives do not vary between public and private firms, I use these effective tax rates to compare private and public firms. My findings show that public, not private, firms are more tax aggressive, as the effective tax rates of public firms are lower in individual and group statements. (author's abstract)

Item Type: Paper
Additional Information: Editors: Eva Eberhartinger, Michael Lang, Rupert Sausgruber and Martin Zagler (Vienna University of Economics and Business), and Erich Kirchler (University of Vienna)
Keywords: private firms vs. public firms / tax aggressiveness / tax avoidance / individual statements
Depositing User: ePub Administrator
Date Deposited: 25 May 2016 09:13
Last Modified: 22 Oct 2019 00:41


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