Publication Type
Working Paper
Publication Date
5-2017
Abstract
In-house human capital investment in the tax function is a significant input to a firm’s tax planning. Yet, due to lack of data, there is little empirical evidence on whether corporate in-house tax departments are associated with effective tax planning. We examine this issue using hand-collected data on corporate tax employees in S&P1500 firms. We find that firms with larger in-house tax departments are more effective in tax planning: they have lower tax rates, report lower uncertain tax benefits, and exhibit less volatile tax rates. The results are stronger for firms with in-house tax departments that have a higher proportion of senior or longer-tenured tax professionals. Overall, this paper contributes to the literature by looking inside the “black box” of corporate tax departments.
Keywords
Human Capital, Tax Planning, Tax Avoidance, Tax Risk
Discipline
Accounting | Corporate Finance
Research Areas
Corporate Reporting and Disclosure
First Page
1
Last Page
71
Publisher
Singapore Management University School of Accountancy Research Paper No. 2016-41
City or Country
Singapore
Citation
CHEN, Xia; CHENG, Qiang; CHOW, Travis; and LIU, Yanju.
Corporate In-House Human Capital Tax Investments. (2017). 1-71.
Available at: https://ink.library.smu.edu.sg/soa_research/1417
Copyright Owner and License
Authors
Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial-No Derivative Works 4.0 International License.
Additional URL
http://ssrn.com/abstract=2701723