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Identifying tax aggressive behaviour: testing the proxies
Published on 01 Apr 22 by "AUSTRALIAN TAX FORUM" JOURNAL ARTICLE
The proprietary nature of corporate management tax policy and corporate tax return information results in very little information being known about the tax aggressive behaviour of these entities. Despite this lack of inside knowledge, tax scholars have continued to attempt to identify corporate tax aggressiveness via the use of proxies using publicly available data. There are numerous different proxies, each with different characteristics as well as perceived advantages and disadvantages. Two common proxies that allow for a continuous ranking of corporate taxpayers are effective tax rates and book-tax differences. Yet, even these proxies can be and are calculated in multiple ways using a variety of data and methodologies. There are also dichotomous proxies such as a presence in a harmful tax regime and involvement in tax disputes. The purpose of this study is to evaluate the application of the different proxies to determine whether there is any consistency in the manner in which they estimate the tax aggressiveness
of large publicly listed corporate entities. A total of 16 proxies were used: seven effective tax rate proxies, seven book-tax differences proxies, one harmful tax regime proxy, and one tax dispute proxy. The proxies were applied to the Australian Stock Exchange top 200 companies (ASX200) to determine whether there was any consistency in the outcomes from the application of the proxies.
Author profiles
Richard Krever
Richard is a professor in the Law School at the University of Western Australia. - Current at 15 April 2020
Prof Kerrie Sadiq CTA
Professor Kerrie Sadiq holds the position of Professor of Taxation in the School of Accountancy at the QUT Business School, Queensland University of Technology. Kerrie’s primary areas of expertise are international tax, tax expenditures and capital gains tax. She is the co-editor of Australian Tax Review, an internationally recognised leading academic tax journal. She is author of publications in both Australian and International journals and edited books, including the Bulletin for International Taxation, Australian Tax Forum, Journal of International Tax, Canadian Tax Journal and the New Zealand Journal of Taxation Law and Policy. She is the general editor and co-author of leading taxation texts used in universities throughout Australia. Prior to joining Queensland University of Technology, Kerrie spent 20 years at The University of Queensland as a member of both their Law School and Business School. Academic Qualifications: • Doctor of Philosophy, Deakin University (PhD) • Master of Laws, Queensland University of Technology (LLM) • Bachelor of Laws, The University of Queensland (LLB (Hons)) • Bachelor of Commerce, The University of Queensland (BCom) Professional Associations & Designations: • Chartered Accountant (CA), Chartered Accountants Australia and New Zealand • Certified Practice Accountant (CPA), CPA Australia • Chartered Tax Adviser (CTA), Tax Institute (Australia) • Graduate of the Australian Institute of Company Directors (GAICD designation) - Current at 25 August 2020Bronwyn McCredie
The Tax Institute is Australia's leading professional association and educator in tax providing the best resources, professional development and networks.