Monitoring and Tax Planning – Evidence from State-Owned Enterprises

39 Pages Posted: 26 Jun 2020

See all articles by Eva Eberhartinger

Eva Eberhartinger

Vienna University of Economics and Business

David M. P. Samuel

University of Wisconsin-Madison; Vienna University of Economics and Business

Date Written: June 20, 2020

Abstract

In this paper, we provide new evidence on the association of state ownership and tax planning and show that shareholders’ monitoring incentives affect a firm’s tax planning. Using the unique setting of the German corporate tax system, 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 the negative association between state ownership and tax planning is concentrated in SOEs where the state owner directly benefits from the tax payments. These results are robust to various specifications and suggest that shareholders’ monitoring incentives are a determinant of firms’ tax planning activities.

Keywords: tax avoidance, monitoring, ownership Structure, state owned enterprises

JEL Classification: G30, G32, H26, H71

Suggested Citation

Eberhartinger, Eva and Samuel, David, Monitoring and Tax Planning – Evidence from State-Owned Enterprises (June 20, 2020). WU International Taxation Research Paper Series No. 2020-08, Available at SSRN: https://ssrn.com/abstract=3632938 or http://dx.doi.org/10.2139/ssrn.3632938

Eva Eberhartinger (Contact Author)

Vienna University of Economics and Business ( email )

Welthandelsplatz 1
Vienna 1020
Austria

HOME PAGE: http://www.wu.ac.at

David Samuel

University of Wisconsin-Madison ( email )

975 University Avenue
Madison, WI 53706
United States

Vienna University of Economics and Business ( email )

Welthandelsplatz 1
Vienna, Wien 1020
Austria

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