Public Tax Disclosures and Fair Share Perceptions

49 Pages Posted: 23 Jan 2021 Last revised: 15 Nov 2022

See all articles by Bart Dierynck

Bart Dierynck

Tilburg University

Martin Jacob

WHU - Otto Beisheim School of Management

Maximilian A. Müller

University of Cologne

Christian Peters

Tilburg University

Victor van Pelt

WHU - Otto Beisheim School of Management

Multiple version iconThere are 2 versions of this paper

Date Written: November 14, 2022

Abstract

To reveal whether firms pay their fair share of taxes, regulators increasingly mandate public tax
disclosures. Such disclosures are often assumed to raise awareness and scrutiny of firms’ tax
aggressiveness and should thus help stakeholders identify aggressive tax avoiders. We conducted
two experiments to test this assumption. The first experiment indicate that stakeholders become
worse at identifying aggressive tax avoiders when public disclosures focus on bottom-line tax
numbers. The reason is that stakeholders use such disclosures as a heuristic for a firm’s tax
aggressiveness and are reluctant to acquire complementary, more detailed tax information. The
results of the second experiment demonstrate that policies to counteract the adverse effects of
public tax disclosures (i.e., a disclaimer, more detailed public tax information, and country-by-country reporting) are helpful but none can achieve the actual policy goal of improved
identification of aggressive tax avoiders.

Keywords: public tax disclosure, corporate taxation, tax transparency

JEL Classification: C91, H26, M48

Suggested Citation

Dierynck, Bart and Jacob, Martin and Müller, Maximilian A. and Peters, Christian P. H. and van Pelt, Victor, Public Tax Disclosures and Fair Share Perceptions (November 14, 2022). Available at SSRN: https://ssrn.com/abstract=3729938 or http://dx.doi.org/10.2139/ssrn.3729938

Bart Dierynck

Tilburg University ( email )

P.O. Box 90153
Tilburg, DC Noord-Brabant 5000 LE
Netherlands

Martin Jacob (Contact Author)

WHU - Otto Beisheim School of Management ( email )

Burgplatz 2
D-56179 Vallendar, 56179
Germany

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

Maximilian A. Müller

University of Cologne ( email )

Albertus-Magnus-Platz
Cologne, 50923
Germany

Christian P. H. Peters

Tilburg University

P.O. Box 90153
Tilburg, DC 5000 LE
Netherlands

Victor Van Pelt

WHU - Otto Beisheim School of Management ( email )

Burgplatz 2
Vallendar, 56179
Germany

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