TY - UNPB
T1 - Monitoring and Tax Planning – Evidence from State-Owned Enterprises
AU - Eberhartinger, Eva
AU - Samuel, David
PY - 2020
Y1 - 2020
N2 - 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.
AB - 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.
UR - https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3632938
U2 - 10.2139/ssrn.3632938
DO - 10.2139/ssrn.3632938
M3 - WU Working Paper
T3 - WU International Taxation Research Paper Series
BT - Monitoring and Tax Planning – Evidence from State-Owned Enterprises
ER -