Tax department design, tax planning, and tax risk

Harald Amberger, Henning Giese, Reinald Koch and Lukas Ortner

No 313, arqus Discussion Papers in Quantitative Tax Research from arqus - Arbeitskreis Quantitative Steuerlehre

Abstract: Despite the central role of corporate tax departments in managing multinational enterprises' (MNEs) global tax positions, little is known about how their internal design shapes corporate tax behavior. Drawing on hand-collected data on more than 8,000 tax employees across 309 publicly listed European MNEs, we examine the association between tax department centralization and firm-level tax outcomes. We find no evidence for tax department centralization being associated with the overall level of tax planning. However, firms with more centralized tax departments engage in greater cross-border profit shifting, respond less to local tax incentives, and face higher tax risk. These findings suggest that tax department design shapes the means rather than the intensity of corporate tax planning. Our study extends the emerging literature on tax department design and provides insights for managers responsible for corporate tax strategies as well as for policymakers anticipating organizational responses to international tax reforms

Keywords: management structure; tax planning; tax risk (search for similar items in EconPapers)
JEL-codes: H25 H26 M12 (search for similar items in EconPapers)
Date: 2026
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