Is corporate digital transformation a tax haven?

Wanyi Chen and Fanli Meng

International Journal of Managerial Finance, 2023, vol. 20, issue 2, 304-333

Abstract: Purpose - Corporate digital transformation (CDT) has challenged traditional tax administration systems. This study examines the impact of CDT on tax avoidance behavior and tests whether tax authorities can identify this behavior. Design/methodology/approach - Using data on listed companies on the Shanghai and Shenzhen Stock Exchanges from 2008 to 2020, this study applies the Heckman two-stage and cross-section models. Findings - The results show that the higher the degree of CDT, the more aggressive the tax avoidance behavior. The CDT's impact on corporate tax avoidance is more significant under strong government tax efforts. Originality/value - This study expands research on the economic consequences of CDT and the factors influencing corporate tax avoidance behavior. Moreover, it has important implications for governments to monitor tax avoidance behavior under the CDT, improve digital tax systems, and pay more attention to the tax administration of digital assets.

Keywords: Corporate digital transformation; Corporate tax avoidance; Tax effort; Tax management; Tax haven; G10; G23; G30 (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:eme:ijmfpp:ijmf-11-2022-0505

DOI: 10.1108/IJMF-11-2022-0505

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