Monitoring and Tax Planning – Evidence from State-Owned Enterprises

Eva Eberhartinger, David Samuel

Publikation: Working/Discussion PaperWU Working Paper

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Abstract

This study provides new evidence on the association of state ownership and tax planning by showing that a shareholder’s monitoring incentives affect a firm’s tax planning. Using the unique setting of the German fiscal federalism, where both the federal and local governments levy a significant corporate income tax, we distinguish between state owners that directly benefit from state-owned enterprises’ (SOEs’) income tax payments and those that do not. Our results indicate that state ownership is associated with less tax planning, but only for SOEs where the state owner directly benefits from higher tax payments. These results are robust to various specifications and suggest that shareholders’ monitoring incentives are a determinant of a firm’s tax planning activities. Our findings provide timely evidence on the current debate of the potential tax effects stemming from increases in state ownership around the world due to the COVID-19 pandemic.
OriginalspracheEnglisch
DOIs
PublikationsstatusVeröffentlicht - 2020

Publikationsreihe

NameWU International Taxation Research Paper Series
Nr.2020-08

Österreichische Systematik der Wissenschaftszweige (ÖFOS)

  • 502052 Betriebswirtschaftslehre
  • 502033 Rechnungswesen
  • 502035 Revisions- und Treuhandwesen
  • 502038 Steuerlehre

WU Working Paper Reihe

  • WU International Taxation Research Paper Series

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