Tax Avoidance vs. Tax Aggressiveness: A Unifying Conceptual Framework

Gerrit M. Lietz

University of Muenster


I develop a unifying conceptual framework of corporate tax planning. The framework accommodates constructs frequently studied in empirical tax accounting research, i.e. tax avoidance, tax aggressiveness, tax sheltering, and tax evasion, by relating them to the seminal notion of effective tax planning presented in Scholes and Wolfson [1992]. Most importantly, literature knows no universal approach to the constructs of tax avoidance and tax aggressiveness (Hanlon and Heitzman [2010]). In search of a useful reference point to delimit non-aggressive from aggressive tax avoidance, I put a particular focus on the more-likely-than-not probability of a tax transaction being legally sustainable upon potential audit (e.g. Lisowsky, Robinson, and Schmidt [2013]). I further provide an overview of commonly used and recently suggested empirical measures of the underlying constructs and discuss their context-sensitive strengths and weaknesses. Finally, I arrange the measures along the lines of the proposed conceptual framework in an attempt to provide guidance as to which proxy most adequately reflects which conceptual construct. Although a demanding task, the promotion of a sound theoretical understanding and careful empirical handling of the relevant tax constructs should enrich the discussion and foster consistent inferences.

Number of Pages in PDF File: 68

Keywords: tax avoidance, tax aggressiveness, tax planning, conceptual framework

JEL Classification: H20, H25, H26, M41

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Date posted: December 5, 2013  

Suggested Citation

Lietz, Gerrit M., Tax Avoidance vs. Tax Aggressiveness: A Unifying Conceptual Framework (2013). Available at SSRN: https://ssrn.com/abstract=2363828 or http://dx.doi.org/10.2139/ssrn.2363828

Contact Information

Gerrit M. Lietz (Contact Author)
University of Muenster ( email )
Universitätsstr. 14-16
Münster, 48143
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