This paper aims to identify the determinants of revenue underreporting and their temporal evolution from a business perspective in formal firms located in an emerging country with high inflation (Argentina). We propose a conceptual model and we estimate it empirically using a logistic regression...

Shifting intellectual property (IP) rights across jurisdictions is a well-known strategy of multinationals to reduce corporate income taxation. We investigate the extent to which the flows of remunerations for the use of IP rights are affected by differences in corporate income and withholding...

This paper examines the determinants and margins of profit shifting through transfer pricing. We develop a theory model, where transfer pricing patterns are governed by a generalized concealment cost function (CCF). Our empirical analysis draws on micro-level data about transaction-level...

Based on a natural experiment that took place in Ecuador in the context of a capital outflow tax, this paper presents suggestive evidence of the emergence of an abnormal transfer pricing behavior. We exploit the fact that some imports were eligible to a tax-credit measure aiming to offset the...

Existing evidence indicates that companies' reported earnings react to tax incentives, but we do not know whether these are accounting responses, evasion responses or real responses. This paper tests for the responses using a quasi-experimental design of a corporate minimum tax scheme introduced...

This theoretical paper studies the relation between tax audits and labour market outcomes (job creation and unemployment) in an economy that contemplates penalties for firms that evade taxes and rewards for firms that comply with tax rules. Intuitively, the simultaneous presence of penalty and...

We model the interaction between the informal credit market and the act of tax collection by the government; in presence and functioning of the informal credit market, the agents (the tax paying firms) engage in false or sham litigation and deferred tax payments. During the litigation period...

Third-party reporting and employers' tax withholding are powerful compliance mechanisms, as long as the employer and employee do not collude to evade. Using data from randomly assigned on-site audits among 2,462 Norwegian firms, we provide evidence of collusive tax evasion. We find that firms...

I leverage a Pakistani tax reform that cuts the tax rate on the supply chains of five major industries of the country from 15% to 0% to cast light on the extent of, and mechanisms driving, VAT noncompliance in a representative emerging economy. I find that firms overclaim refunds by 22% and...

This paper examines the compliance pattern of small businesses, using pooled 1985 and 1988 Taxpayer Compliance Measurement Program (TCMP) data. Specifically, we focus on the voluntary reporting compliance of income from proprietorship, farm, and rental real estate activities. We find that...