{"title":"Tax control and corporate VAT compliance: An empirical assessment of the moderating role of tax strategy","authors":"","doi":"10.1016/j.intaccaudtax.2024.100655","DOIUrl":null,"url":null,"abstract":"<div><div>Tax control frameworks (TCF) of higher quality are seen by tax authorities and the OECD as a prerequisite for corporate tax compliance. However, a higher quality TCF can also enable organizations to reduce their tax burden by providing information that allows them to make the best use of opportunities within the boundaries of the tax law. We investigate the effect of TCF quality on tax compliance by looking at the tax strategy of the organization and whether the organization unintentionally or intentionally fails to comply. We focus on Value Added Tax (VAT) and test our hypotheses using a sample of large organizations, using a combination of survey data and tax audit results from the Netherlands. Our results show that a TCF of higher quality is positively associated with VAT compliance, resulting in both less unintentional and less intentional errors requiring tax adjustment. For organizations with a more conservative tax strategy, we find that the quality of the TCF does not affect the level of intentional non-compliance. For organizations with a more aggressive tax strategy, however, the level of intentional non-compliance is conditional upon the quality of the TCF, with a lower (higher) quality TCF leading to more (less) intentional non-compliance.</div></div>","PeriodicalId":53221,"journal":{"name":"Journal of International Accounting Auditing and Taxation","volume":null,"pages":null},"PeriodicalIF":3.3000,"publicationDate":"2024-10-02","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Journal of International Accounting Auditing and Taxation","FirstCategoryId":"1085","ListUrlMain":"https://www.sciencedirect.com/science/article/pii/S1061951824000612","RegionNum":0,"RegionCategory":null,"ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q1","JCRName":"BUSINESS, FINANCE","Score":null,"Total":0}
引用次数: 0
Abstract
Tax control frameworks (TCF) of higher quality are seen by tax authorities and the OECD as a prerequisite for corporate tax compliance. However, a higher quality TCF can also enable organizations to reduce their tax burden by providing information that allows them to make the best use of opportunities within the boundaries of the tax law. We investigate the effect of TCF quality on tax compliance by looking at the tax strategy of the organization and whether the organization unintentionally or intentionally fails to comply. We focus on Value Added Tax (VAT) and test our hypotheses using a sample of large organizations, using a combination of survey data and tax audit results from the Netherlands. Our results show that a TCF of higher quality is positively associated with VAT compliance, resulting in both less unintentional and less intentional errors requiring tax adjustment. For organizations with a more conservative tax strategy, we find that the quality of the TCF does not affect the level of intentional non-compliance. For organizations with a more aggressive tax strategy, however, the level of intentional non-compliance is conditional upon the quality of the TCF, with a lower (higher) quality TCF leading to more (less) intentional non-compliance.
期刊介绍:
The Journal of International Accounting, Auditing and Taxation publishes articles which deal with most areas of international accounting including auditing, taxation and management accounting. The journal''s goal is to bridge the gap between academic researchers and practitioners by publishing papers that are relevant to the development of the field of accounting. Submissions are expected to make a contribution to the accounting literature, including as appropriate the international accounting literature typically found in JIAAT and other primary US-based international accounting journals as well as in leading European accounting journals. Applied research findings, critiques of current accounting practices and the measurement of their effects on business decisions, general purpose solutions to problems through models, and essays on world affairs which affect accounting practice are all within the scope of the journal.