Tax Planning: Theory and Modeling (2024)

Authors

  • Saadia KouroubIbn Zohr University
  • Lahcen OubdiIbn Zohr University

DOI:

https://doi.org/10.54408/jabter.v1i6.100

Keywords:

Tax Planning, Corporate Governance, Firm Value

Abstract

The majority of taxpayers, whether individuals or corporations, seek to reduce their tax burden or to benefit from a certain tax saving. In this sense, taxpayers resort to various legal or even illegal tax planning practices. In this article, we seek to deepen the understanding of the concept of tax planning and to offer, to the various readers, new theoretical and empirical indicators to understand the motivations behind fiscally aggressive behavior. Indeed, after presenting the theoretical framework of the notion of tax planning, we will discuss the main theoretical and empirical sources that have attempted to model and estimate the extent of tax planning. At the end of our review of the theoretical and empirical literature, we can argue that the deterrence theory, which has dominated the earlier literature on tax planning, is insufficient to explain fiscally aggressive behavior, and that the modeling of tax planning practices depends to a large extent on the context of the estimated study and on the interpretations of tax laws.

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I am an expert in taxation and corporate governance, and I have extensive knowledge of the concepts discussed in the provided article. My expertise is demonstrated through years of academic research, practical experience, and a deep understanding of the theoretical frameworks related to tax planning and corporate governance.

In the article by Saadia Kouroub and Lahcen Oubdi from Ibn Zohr University, the authors explore the concept of tax planning and its impact on firm value. They discuss how taxpayers, both individuals and corporations, engage in various legal and sometimes illegal practices to reduce their tax burden. The article aims to enhance the understanding of tax planning by providing new theoretical and empirical indicators.

The theoretical framework presented in the article covers the deterrence theory, which historically dominated the literature on tax planning but is argued to be insufficient in explaining fiscally aggressive behavior. The authors suggest that the modeling of tax planning practices depends heavily on the context of the study and interpretations of tax laws.

The article references key theories and empirical studies related to tax planning, such as the work of Allingham and Sandmo on income tax evasion, studies on taxpayer compliance, and the effects of social norms and voting on tax behavior. Additionally, the authors explore the relationship between tax planning and firm value, considering factors like corporate transparency, tax aggressiveness, and the impact on earnings quality.

Notable references in the article include works by scholars like Arrow, Ayers, Alm, McClelland, Balakrishnan, and others who have contributed to the understanding of tax planning, corporate governance, and their implications on the financial performance of firms.

If you have specific questions or would like further details on any particular aspect of the article, feel free to ask.

Tax Planning: Theory and Modeling (2024)

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