Tax Avoidance vs. Tax Aggressiveness: A Unifying Conceptual Framework

68 Pages Posted: 5 Dec 2013

See all articles by Gerrit M. Lietz

Gerrit M. Lietz

ISM International School of Management; University of Muenster

Date Written: 2013


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.

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

JEL Classification: H20, H25, H26, M41

Suggested Citation

Lietz, Gerrit M., Tax Avoidance vs. Tax Aggressiveness: A Unifying Conceptual Framework (2013). Available at SSRN: or

Gerrit M. Lietz (Contact Author)

ISM International School of Management ( email )

Brooktorkai 22
Hamburg, 20457

University of Muenster

Universitätsstr. 14-16
M√ľnster, 48143

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