Footnote:
Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments March 23, 2023 erstellt
Description:
In 2016, the U.K. government passed a new regulation requiring large businesses to publicly disclose their tax strategy. The regulator expects these mandatory, qualitative tax disclosures to attract public scrutiny on firms’ tax practices, which would in turn pressure firms to reduce tax avoidance. This study examines whether the U.K. tax strategy disclosure requirement has achieved its objective. Using a difference-in-differences (DiD) design and a sample of U.K. publicly traded firms, I provide evidence mostly compatible with the regulation not having significant impact on firms’ tax avoidance. I find similar inferences even in a series of cross-sectional tests within the sample of treated firms, where I focus on subsamples that are most likely to exhibit the intended behavioral changes. Thus, the collective evidence is largely inconsistent with the regulation being successful in curbing tax avoidance. Because this regulation represents an early attempt that promotes direct conversations between large businesses and the public about firms’ tax practices through public disclosures, findings of this study should inform regulators worldwide as they consider implementing similar disclosure regulations to combat corporate tax avoidance