Does Public Country-by-Country Reporting Deter Tax Avoidance and Income Shifting? Evidence from the European Banking Industry*

• 成果类型: Article
• 署名作者: Joshi, Preetika; Outslay, Edmund; Persson, Anh; Shevlin, Terry; Venkat, Aruhn
• 署名单位: York University - Canada; Michigan State University; University of Illinois System; University of Illinois Urbana-Champaign; University of California System; University of California Irvine
• 刊物名称: CONTEMPORARY ACCOUNTING RESEARCH
• ISSN/ISSBN: 0823-9150
• DOI: 10.1111/1911-3846.12601
• 发表日期: 2020
• 页码: 2357-2397
• 关键词: MULTINATIONAL-CORPORATIONS; economic consequences; accounting standards; earnings management; FIRMS; state; DISCLOSURES; taxation; Aggressiveness; APPORTIONMENT

摘要

In this study, we examine the effect of increased tax transparency on the tax planning behavior of European banks. In 2014, the European Union introduced public country-by-country reporting requirements to the banking industry. Treating this new requirement as an exogenous shock, we find limited evidence consistent with a decline in income shifting by the banks' financial affiliates in the post-adoption period (starting from 2015). We do not, however, find robust evidence of a significant change in the consolidated book effective tax rates among the affected banks. Our findings suggest that increased transparency from public country-by-country reporting can deter tax-motivated income shifting but that it did not appear to materially influence the banks' overall tax avoidance. Our findings have policy implications for the ongoing debate between the European Parliament, the Organisation for Economic Co-operation and Development, and accounting standard-setting bodies on whether to require multinationals to publish country-by-country reports.