Tax Overpayments, Tax Evasion, and Book-Tax Differences

Laszlo Goerke

No 2212, CESifo Working Paper Series from CESifo

Abstract: A strictly risk-averse manager makes joint decisions on a firm's tax payments and book profit declarations according to accounting standards. It is analysed how the incentives to overpay or evade taxes and to inflate book profits are influenced by (1) the composition of the manager's remuneration, (2) the ability to control the manager's actions, (3) the costs of making untruthful profit declarations, and (4) the tax rate. If the firm's owner or the government takes into account these effects when pursuing his own objectives, the changes in tax payments and book profit declarations become theoretically more ambiguous.

Keywords: executive compensation; financial accounting; tax evasion (search for similar items in EconPapers)
JEL-codes: H25 H26 M52 (search for similar items in EconPapers)
Date: 2008
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Journal Article: Tax Overpayments, Tax Evasion, and Book‐Tax Differences (2008)
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Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_2212

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