Restrição Financeira E Agressividade Fiscal Nas Empresas Brasileiras De Capital Aberto

Martinez, Antônio Lopo; Silva, Raimundo da

doi:10.14392/asaa.2018110305

Cited by 19 publications

(24 citation statements)

References 4 publications

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“…To Martinez and Silva (2018), this metric facilitates a better understanding of the tax rules that are applicable in Brazil. Martinez (2017) also relates that this measure is different because it is determined by VAR data, which can broadly capture aggressiveness, including not only the IRPJ and CSLL but also other federal, state and municipal taxes, unlike the ETR, which is measured only by the company's profits.…”

Section: Data Collectionmentioning

confidence: 99%

“…This is confirmed by the VAT regression, a metric that uses the characteristics of VAR, which was not used by Higgins et al (2015) but provides a closer vision of the reality of Brazilian firms. Previous studies note that the VATR, responsible for inferring tax rates through the wealth of firms, is vital in measuring taxation in general and not only taxes on profit, which is not the main characteristic of Brazilian companies (Motta and Martinez, 2015;Martinez and Silva, 2018).…”

Section: Regression Analysismentioning

confidence: 99%

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Business strategy and tax aggressiveness in Brazil

Martinez

Ferreira

2019

JSMA

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Purpose The purpose of this paper is to analyse the relationships between company business strategy type and tax aggressiveness for companies listed on the Brazilian Bovespa stock exchange. Design/methodology/approach Following the concepts of Miles and Snow (1978, 2003), we classified company strategies into four types, analyser, defender, prospector and reactor, using data from 2012 to 2016. The authors excluded financial companies due to a differential tax regime. Next, prospector and defender companies were identified, and the relationship of these strategies with tax aggressiveness assessed using regression analysis; analyser and reactor types were not included as these are defined as a combination of the prospector and defender type, or non-strategic, respectively. To assess aggressiveness, the authors used effective tax rates on corporate profits, as well as a metric that captures tax burden in terms of all taxes paid by a company. Findings Most Brazilian companies were analysers (76.66 per cent), with prospector companies being a minority, and defenders representing a little over 21 per cent. Unlike the findings of Higgins et al. (2015), the authors found that defender companies also have a tendency to practice aggressive tax planning. Practical implications The authors found the Brazilian defender companies similar to prospectors, tended to be more tax aggressive or to take higher tax risks. Thus, findings in economies such as the USA may not be generalizable to other countries, such as Brazil, Russia, India or China (i.e. the BRICs), for example. The particularities of each country, such as ease of access to the capital market, tax deductibility of investment in research and development and legal issues must be considered before applying generalized prognostics. Originality/value This paper offers original empirical evidence from Brazil of the relationship between company strategy type and the tax aggressiveness, offering a clear result that differs in part from results from American companies. It therefore encourages further studies on this topic.

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Section: Data Collectionmentioning

confidence: 99%

Section: Regression Analysismentioning

confidence: 99%

Business strategy and tax aggressiveness in Brazil

Martinez

Ferreira

2019

JSMA

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“…All data were collected from the Economatica ® database. We follow Martinez and Silva (2018), excluding financial firms with pre-tax losses and those that did not have the necessary data to compute the variables used in the analyses. Table 1 shows the process of formation and composition of the sample.…”

Section: Methodsmentioning

confidence: 99%

Tax aggressiveness as a determining factor of conditional conservatism in Brazil,

Martinez

Júnior

Sena

2022

Rev. contab. finanç.

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This paper investigates whether the degree of tax aggressiveness is associated with conditional conservatism in Brazil. After a thorough literature review on accounting conservatism by Brazilian academia and a discussion about tax aggressiveness and accounting conservatism, a literature gap was found because the relationship between a firm's degree of tax aggressiveness and its conditional conservatism had not been investigated previously. Taxable income has a relationship with accounting income in the Brazilian corporate income tax system. Hence, tax planning can affect financial information properties. This study offers a partial explanation of accounting conservatism based on tax issues that contribute to the conservatism and taxation literature. The results suggest that tax strategies that aim to avoid tax burden are related to conditional conservative accounting. Hence, the practice of conditional conservatism in Brazil appears to be linked with tax-deductible alternatives of reducing earnings, which would explain tax planning’s association with the degree of conditional conservatism in financial reporting. This finding is relevant to financial reporting users that can consider our results in their analysis and to management that seeks to understand their decisions about tax planning better. For this research purpose, two Basu models (Basu, 1997) were adopted, adapted with tax-aggressiveness controls. The effective tax rate (ETR) was used as a tax-aggressiveness metric, controlling firms with both high and low ETR. The study period was from 2010 to 2019 for Brazilian firms from B3 S.A. - Brasil, Bolsa, Balcão (B3). The findings demonstrate a significant relationship between tax avoidance and conditional conservatism, that is, more tax-aggressive firms tend to use more conservative accounting.

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“…Thus, increasing the tax aggressiveness level, i.e., the tax risk of the corporations, can unwittingly cause an enhance risk of notices of violation issued by the treasury official. Tax risk and tax aggressiveness go together; despite the conceptual difference they are positively related to the same ideal (Martinez & Silva, 2018).…”

Section: Financial Derivative Taxation In Brazilmentioning

confidence: 96%

Financial Derivatives, Hedge Accounting and Tax Aggressiveness in Brazil

Martinez¹,

Reinoso²,

Antônio³

et al. 2019

SSRN Journal

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This study investigated the relationship between the use of financial derivatives by non-financial corporations and tax aggressiveness in Brazil. In research on the American market, evidence was identified that non-financial entity users of financial derivatives were more tax aggressive. However, there is no reason to assume that this behavior is replicated in the Brazilian market, since tax legislation does not offer the same economic incentives, i.e., since it imposes limits on the tax deductibility of losses with these financial instruments, except in derivatives' well-documented and proven use as a hedge tool. To verify this point, companies were classified into users and non-users of first-generation financial derivatives, and associated this classification with tax aggression metrics. The study focus was 384 non-financial companies listed on the B3 in the period from 2005 to 2015. The results of regression analysis using a probit estimate have pointed, in a distinctly different way than the American reality, that the most tax aggressive companies tend to use fewer financial derivatives. Nevertheless, when the use of derivative instruments as a hedge was controlled, it was found that when a company adopts hedge accounting, it is more likely it will be more tax aggressive. The result is presumably explained by the Brazilian tax treatment that authorizes the deductibility of losses, regardless of earnings, when using the derivative as a hedge.

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Restrição Financeira E Agressividade Fiscal Nas Empresas Brasileiras De Capital Aberto

Cited by 19 publications

References 4 publications

Business strategy and tax aggressiveness in Brazil

Business strategy and tax aggressiveness in Brazil

Tax aggressiveness as a determining factor of conditional conservatism in Brazil,

Financial Derivatives, Hedge Accounting and Tax Aggressiveness in Brazil

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