Public tax-return disclosure

Hoopes, Jeffrey L.; Robinson, Leslie A.; Slemrod, Joel

doi:10.1016/j.jacceco.2018.04.001

Cited by 107 publications

(96 citation statements)

References 40 publications

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“…This is of special importance in light of the proposal of the European Commission and the European Parliament to adopt a public CbCR requirement for all multinational firms with profits above a certain threshold (European Commission, 2016; European Parliament, 2017). When taking together the findings of Chen (2017), Hoopes et al (2018), Johannesen & Larsen (2016) and our study, we argue that the capital market reaction to a new tax disclosure requirement is likely to depend on the motivation of the rule and on the way the information is presented. The European Commission suggests that companies shall not only publish the CbCRs on their website, but that the data shall also be disclosed in a publicly available register of the European Commission.…”

supporting

confidence: 51%

“…A couple of recent studies suggest that investors perceive a mandatory increase in tax transparency as a potent tool in curbing tax avoidance. More precisely, Johannesen & Larsen (2016), Chen (2017) and Hoopes et al (2018) document negative stock price reactions around key dates of two legislative procedures that introduced new public tax disclosure obligations for certain companies. They interpret their findings as evidence of investors expecting the disclosure of new information to be costly for firms, mainly due to an anticipated increase in scrutiny by the public and by tax authorities, resulting in a potential reduction of profit shifting opportunities under the new disclosure rules.…”

Section: Introductionmentioning

confidence: 99%

“…Empirical evidence from similar settings suggests a negative response of the capital market. Chen (2017) and Hoopes et al (2018) investigate a new public tax disclosure rule in Australia issued in 2013. Johannesen and Larsen (2016) exploit the introduction of the CbCR requirement for EU companies in the extractive industries by the EU Accounting Directive 2013 3 .…”

Section: Introductionmentioning

confidence: 99%

“…First, our analysis provides evidence on the impact of tax transparency on the capital market. Some extant studies examine how investors value the publication of tax-related information about companies, focusing on the event of disclosure itself (Brooks et al, 2016;Chen, 2017;Gallemore et al, 2014;Hanlon & Slemrod, 2009;Hoopes et al, 2018;Huesecken et al, 2017;O'Donovan et al, 2017). However, little is known about how investors react to changes in rules requiring the disclosure of additional information, i.e.…”

mentioning

confidence: 99%

“…an increase in tax transparency. Chen 2017, Hoopes et al (2018) and Johannesen & Larsen (2016) find significant stock price declines around key dates of two legislative procedures that introduced new public tax disclosure obligations. We aim to investigate whether the negative investor reactions documented in their studies are generalizable to other industries and settings, namely to the introduction of a public CbCR requirement for EU financial institutions.…”

mentioning

confidence: 99%

See 4 more Smart Citations

Increasing tax transparency: investor reactions to the country-by-country reporting requirement for EU financial institutions

Dutt

Ludwig

Nicolay

et al. 2019

Int Tax Public Finance

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We employ an event study methodology to investigate the stock price reaction around the day of the political decision to include a country-by-country reporting obligation for EU financial institutions. We do not find significant abnormal returns for the banks affected. Sample splits according to the effective tax rate and the degree of B2C orientation do not reveal a more pronounced negative investor response for banks engaging more strongly in tax avoidance or being potentially more concerned about reputational risks, respectively. We conclude that the implementation of a CbCR requirement for EU financial institutions did not trigger a noticeable investor response. Contrary prior findings regarding other public tax disclosure obligations might be driven by the distinct motivation of the rules and the way the information is presented. We contend that capital market reactions to an upcoming increase in tax transparency are not generalizable to other industries and settings, but that consideration must be given to the context and the exact design of the rule.

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supporting

confidence: 51%

Section: Introductionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

mentioning

confidence: 99%

mentioning

confidence: 99%

See 3 more Smart Citations

Increasing tax transparency: investor reactions to the country-by-country reporting requirement for EU financial institutions

Dutt

Ludwig

Nicolay

et al. 2019

Int Tax Public Finance

View full text Add to dashboard Cite

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How do tax compliance labels impact sharing platform consumers? An empirical study on the interplay of trust, moral, and intention to book

Dann

Müller

Werner

et al. 2022

Inf Syst E-Bus Manage

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The platform economy has generated various new and highly successful business models. However, certain models facilitate tax evasion for service providers on their income earned on these platforms. While tax evasion contradicts the pro-social claim of many sharing platforms, it is unclear whether a provider’s tax honesty constitutes a value for consumers at all. This study investigates the role of tax compliance for platform users by employing an online experiment ($$n=286$$ n = 286 ). The results indicate that consumers perceive providers’ tax compliance and consider it as a trust-enhancing signal. In further analysis, we find that consumers’ moral norms moderate both the signal’s trust-building effect as well as the relation between trust and transaction intention. In light of recent policy debates around taxing the platform economy, this study provides valuable practical insights for tax legislators.

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Threshold-dependent tax enforcement and the size distribution of firms: evidence from Germany

Klimsa

Ullmann

2022

Int Tax Public Finance

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This paper investigates firms’ responses to threshold-dependent intensity of tax enforcement. We use administrative tax return data over the entire population of German firms and exploit industry variation in firm size thresholds applied by the tax administration. In our setting, each threshold marks a considerable spike in audit intensity and hence should create strong incentives to bunch below the threshold. However, we find no such effect in our large sample analysis. We attribute this empirical observation to optimization costs, particularly to the costs associated with the operational implementation of size management and to information costs. Our paper adds to the emerging field of studies on potential distortions created by threshold-dependent firm regulation. The findings are also relevant for policymakers, as they suggest that the specific design of threshold-dependent policies might allow governments to increase the efficiency of tax audits without distorting the firm size distribution.

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Public tax-return disclosure

Cited by 107 publications

References 40 publications

Increasing tax transparency: investor reactions to the country-by-country reporting requirement for EU financial institutions

Increasing tax transparency: investor reactions to the country-by-country reporting requirement for EU financial institutions

How do tax compliance labels impact sharing platform consumers? An empirical study on the interplay of trust, moral, and intention to book

Threshold-dependent tax enforcement and the size distribution of firms: evidence from Germany

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