Taking advantage of the mandatory disclosure of detected corporate taxevasions in China, we examine why publicly listed firms evade taxes. Different from mostprior studies that focus on corporate income tax avoidance, we consider tax evasions relatedto both income taxes and non-income taxes. We also use a bivariate probit model to accountfor the partial observability of corporate tax evasion. Many of our regression results using thebivariate probit model are different from the results using the reduced form probit model thatignores the partial observability of tax evasion. Many of our results are also different fromthose of prior research on the determinants of corporate tax avoidance using the traditionaleffective tax rate as a proxy for tax avoidance.
Tax avoidance, tax evasion, China, SOE
Corporate Reporting and Disclosure
CHOW, Travis K.; KE, Bin; YUAN, Hongqi; and YAO, Zhang.
The joint modeling of the commitment and detection of partially observable corporate tax evasion: Evidence from China. (2017). 1-38. Research Collection School Of Accountancy.
Available at: http://ink.library.smu.edu.sg/soa_research/1596
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