The relationship between tax avoidance and tax risk

• Main Authors: Chiang, Pei-Chen, 姜沛岑
• Other Authors: 郭振雄
• Format: Others
• Language: zh-TW
• Published: 2018
• Online Access: http://ndltd.ncl.edu.tw/handle/c6v4hm

碩士 === 國立政治大學 === 財政學系 === 106 === Tax risk is the degree of uncertainty about the firm’s future tax payments, where the tax uncertainty comes from the likelihood of losing a claimed tax benefit upon challenged by a tax authority. In my research, the sample selection begins with TEJ Database firm-years between 1998 and 2016. I investigate the relation between tax avoidance and tax risk. The results show that the firms with low effective tax rates or high book-tax differences bear less tax risk. On average, reduction of explicit tax can be achieved via safe tax avoidance strategies, and tax avoidance does not increase tax risk. However, the relation between tax avoidance and tax risk may be changed by firms with high levels of R&D expenses, investment income using the equity method, or tax haven subsidiaries. As a result, the findings show that firms with high levels of R&D expenses or investment income may let tax avoidance significantly increase tax risk.