Corporate tax disclosure and impression management: the case of French listed firms

Florence Depoers () and Tiphaine Jérôme ()
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Florence Depoers: CEROS - Centre d'Etudes et de Recherches sur les Organisations et la Stratégie - UPN - Université Paris Nanterre
Tiphaine Jérôme: CERAG - Centre d'études et de recherches appliquées à la gestion - UGA - Université Grenoble Alpes

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Abstract: IAS 12 gives managers the option of presenting corporate income tax in the tax reconciliation either as a value or a percentage of the pre-tax profit. Our objective in this study is to analyze the motivations that lead managers to use one format of presentation over the other to disclose the effective corporate income tax. Our study covers a sample of companies listed on the Paris stock exchange. Results show that, when the effective tax rate is relatively low compared to that of competitors, managers choose the percentage format in order to highlight their low corporate tax burden, which we identify as an impression management tactic. However, this propensity decreases when the company benefits from positive coverage in the media, as managers simultaneously seek to preserve corporate legitimacy. Our results highlight one of the elements of strategic tax information management and are therefore useful to stakeholders interested in this information.

Keywords: tax reconciliation; tax disclosure; impression management; fiscal transparency; disclosure policy (search for similar items in EconPapers)
Date: 2021
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Published in Gestion 2000, 2021, 38 (3), pp.143-164. ⟨10.3917/g2000.383.0143⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-04815903

DOI: 10.3917/g2000.383.0143

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