The effects of concession timing, perceived fairness and aggressiveness on tax negotiation offers

Purpose This study aims to examine the consequences of tax authorities’ use of concession-timing negotiation strategies on tax practitioners and their final proposed offers. Design/methodology/approach This is an experimental study conducted on tax practitioners using a design of 2 × 1, varying the tax authorities’ negotiation strategy (i.e. concession-gradual and concession-end strategies) across two levels. Findings The concessionary negotiation strategies adopted by tax authorities influence tax practitioners’ final proposed offers, their perceptions of fairness (i.e. distributive justice and procedural justice) and their aggressiveness of stance in tax audit negotiations. Originality/value This experimental study contributes to existing research on tax authority-tax practitioner negotiation models used during tax audits by providing the first evidence that concession timing matters. The study extends the negotiation model to include tax aggressiveness as a new variable and examines the indirect roles of fairness and offers in tax audit negotiations.