Technological Changes and Countries’ Tax Policy Design: Evidence from Anti–Tax Avoidance Rules

60 Pages Posted: 31 Oct 2019 Last revised: 12 Sep 2023

See all articles by Alissa Bruehne

Alissa Bruehne

WHU - Otto Beisheim School of Management

Martin Jacob

WHU - Otto Beisheim School of Management

Harm H. Schütt

Tilburg University - Tilburg School of Economics and Management

Date Written: August 29, 2023

Abstract

We investigate the association between technological changes and corporate tax policies in 34 OECD countries. We use a shift-share design to capture the differential exposure of countries to U.S. technological advancements. Our study shows that countries’ anti-tax avoidance rules are tightened as their exposure to U.S. technological advancements increases. The tightening is particularly concentrated in countries that are larger, more exposed to intangibles, and have higher profit shifting incentives. Our findings have important implications for corporate executives as a country’s anti–tax avoidance rules are associated with foreign technological advancements.

Keywords: tax policy, technological changes, tax avoidance

JEL Classification: M48, H25, H26

Suggested Citation

Bruehne, Alissa and Jacob, Martin and Schütt, Harm H., Technological Changes and Countries’ Tax Policy Design: Evidence from Anti–Tax Avoidance Rules (August 29, 2023). forthcoming, Management Science, TRR 266 Accounting for Transparency Working Paper Series No. 12, Available at SSRN: https://ssrn.com/abstract=3473767 or http://dx.doi.org/10.2139/ssrn.3473767

Alissa Bruehne (Contact Author)

WHU - Otto Beisheim School of Management ( email )

Burgplatz 2
Vallendar, 56179
Germany

Martin Jacob

WHU - Otto Beisheim School of Management ( email )

Burgplatz 2
D-56179 Vallendar, 56179
Germany

HOME PAGE: http://www.whu.edu/steuer

Harm H. Schütt

Tilburg University - Tilburg School of Economics and Management ( email )

PO Box 90153
Tilburg, 5000 LE Ti
Netherlands

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