Incentives for Tax Planning and Avoidance: Evidence from the Field

We analyze survey responses from nearly 600 corporate tax executives to investigate firms' incentives and disincentives for tax planning. While many researchers hypothesize that reputational concerns affect the degree to which managers engage in tax planning, this hypothesis is difficult to test with archival data. Our survey allows us to investigate reputational influences and, indeed, we find that reputational concerns are important—69 percent of executives rate reputation as important and the factor ranks second in order of importance among all factors explaining why firms do not adopt a potential tax planning strategy. We also find that financial accounting incentives play a role. For example, 84 percent of publicly traded firms respond that top management at their company cares at least as much about the GAAP ETR as they do about cash taxes paid and 57 percent of public firms say that increasing earnings per share is an important outcome from a tax planning strategy.Duke University. Fuqua School of BusinessUniversity of Michigan (Paton Accounting Fund)University of California, Irvine. Paul Merage School of Busines

Tax Haven Networks and the Role of the Big 4 Accountancy Firms

This paper investigates the association between the Big 4 accountancy firms and the extent to which multinational enterprises build, manage and maintain their networks of tax haven subsidiaries. We extend internalisation theory and derive a number of hypotheses that are tested using count models on firm-level data. Our key findings demonstrate that there is a strong correlation and causal link between the size of an MNE’s tax haven network and their use of the Big 4. We therefore argue that public policy related to the role of auditors can have a significant impact on the tax avoidance behaviour of MNEs

Weaning practices in phenylketonuria vary between health professionals in Europe

Background: In phenylketonuria (PKU), weaning is considered more challenging when compared to feeding healthy infants. The primary aim of weaning is to gradually replace natural protein from breast milk or standard infant formula with solids containing equivalent phenylalanine (Phe). In addition, a Phe-free second stage L-amino acid supplement is usually recommended from around 6 months to replace Phe-free infant formula. Our aim was to assess different weaning approaches used by health professionals across Europe. Methods: A cross sectional questionnaire (survey monkey (R)) composed of 31 multiple and single choice questions was sent to European colleagues caring for inherited metabolic disorders (IMD). Centres were grouped into geographical regions for analysis. Results: Weaning started at 17-26 weeks in 85% (n=81/95) of centres, > 26 weeks in 12% (n=11/95) and 26 weeks. First solids were mainly low Phe vegetables (59%, n=56/95) and fruit (34%, n=32/95). A Phe exchange system to allocate dietary Phe was used by 52% (n=49/95) of centres predominantly from Northern and Southern Europe and 48% (n=46/95) calculated most Phe containing food sources (all centres in Eastern Europe and the majority from Germany and Austria). Some centres used a combination of both methods. A second stage Phe-free L-amino acid supplement containing a higher protein equivalent was introduced by 41% (n=39/95) of centres at infant age 26-36 weeks (mainly from Germany, Austria, Northern and Eastern Europe) and 37% (n=35/95) at infant age > 1y mainly from Southern Europe. 53% (n=50/95) of centres recommended a second stage Phe-free L-amino acid supplement in a spoonable or semi-solid form. Conclusions: Weaning strategies vary throughout European PKU centres. There is evidence to suggest that different infant weaning strategies may influence longer term adherence to the PKU diet or acceptance of Phe-free L-amino acid supplements; rendering prospective long-term studies important. It is essential to identify an effective weaning strategy that reduces caregiver burden but is associated with acceptable dietary adherence and optimal infant feeding development.Peer reviewe

Early feeding practices in infants with phenylketonuria across Europe

Background: In infants with phenylketonuria (PKU), dietary management is based on lowering and titrating phenylalanine (Phe) intake from breast milk or standard infant formula in combination with a Phe-free infant formula in order to maintain blood Phe levels within target range. Professionals use different methods to feed infants with PKU and our survey aimed to document practices across Europe. Methods: We sent a cross sectional, survey monkey (R) questionnaire to European health professionals working in IMD. It contained 31 open and multiple-choice questions. The results were analysed according to different geographical regions. Results: Ninety-five centres from 21 countries responded. Over 60% of centres commenced diet in infants by age 10 days, with 58% of centres implementing newborn screening by day 3 post birth. At diagnosis, infant hospital admission occurred in 61% of metabolic centres, mainly in Eastern, Western and Southern Europe. Breastfeeding fell sharply following diagnosis with only 30% of women still breast feeding at 6 months. 53% of centres gave pre-measured Phe-free infant formula before each breast feed and 23% alternated breast feeds with Phe-free infant formula. With standard infant formula feeds, measured amounts were followed by Phe-free infant formula to satiety in 37% of centres (n = 35/95), whereas 44% (n = 42/95) advised mixing both formulas together. Weaning commenced between 17 and 26 weeks in 85% centres, >= 26 weeks in 12% and <17 weeks in 3%. Discussion: This is the largest European survey completed on PKU infant feeding practices. It is evident that practices varied widely across Europe, and the practicalities of infant feeding in PKU received little focus in the PKU European Guidelines (2017). There are few reports comparing different feeding techniques with blood Phe control, Phe fluctuations and growth. Controlled prospective studies are necessary to assess how different infant feeding practices may influence longer term feeding development.Peer reviewe

Early feeding practices in infants with phenylketonuria across Europe

Background: In infants with phenylketonuria (PKU), dietary management is based on lowering and titrating phenylalanine (Phe) intake from breast milk or standard infant formula in combination with a Phe-free infant formula in order to maintain blood Phe levels within target range. Professionals use different methods to feed infants with PKU and our survey aimed to document practices across Europe. Methods: We sent a cross sectional, survey monkey (R) questionnaire to European health professionals working in IMD. It contained 31 open and multiple-choice questions. The results were analysed according to different geographical regions. Results: Ninety-five centres from 21 countries responded. Over 60% of centres commenced diet in infants by age 10 days, with 58% of centres implementing newborn screening by day 3 post birth. At diagnosis, infant hospital admission occurred in 61% of metabolic centres, mainly in Eastern, Western and Southern Europe. Breastfeeding fell sharply following diagnosis with only 30% of women still breast feeding at 6 months. 53% of centres gave pre-measured Phe-free infant formula before each breast feed and 23% alternated breast feeds with Phe-free infant formula. With standard infant formula feeds, measured amounts were followed by Phe-free infant formula to satiety in 37% of centres (n = 35/95), whereas 44% (n = 42/95) advised mixing both formulas together. Weaning commenced between 17 and 26 weeks in 85% centres, >= 26 weeks in 12% and <17 weeks in 3%. Discussion: This is the largest European survey completed on PKU infant feeding practices. It is evident that practices varied widely across Europe, and the practicalities of infant feeding in PKU received little focus in the PKU European Guidelines (2017). There are few reports comparing different feeding techniques with blood Phe control, Phe fluctuations and growth. Controlled prospective studies are necessary to assess how different infant feeding practices may influence longer term feeding development

Undiagnosed Phenylketonuria Can Exist Everywhere: Results From an International Survey

peer reviewedMany countries do not have a newborn screening (NBS) program, and immigrants from such countries are at risk for late diagnosis of phenylketonuria (PKU). In this international survey, 52 of 259 patients (20%) with late diagnosed PKU were immigrants, and 145 of the 259 (55%) were born before NBS or in a location without NBS. © 2021 The Author

Personally Tax Aggressive Managers and Firm Level Tax Avoidance

This paper investigates whether managers that have a propensity for personal tax aggressiveness are associated with tax avoidance at the firm level. Motivated by Dhaliwal, Erickson, and Heitzman (2009) and Hanlon and Heitzman (2009), I construct a measure of personally tax aggressive ("aggressive") managers and determine whether corporate tax avoidance activities increase in their presence. The results of my study indicate that aggressive managers are associated with firm-level tax avoidance. The neoclassical view would suggest that aggressive managers' tax expertise could benefit shareholders through lower tax payments. Since aggressive managers extract their personal tax savings from shareholders, non-tax agency costs potentially increase in their presence. This has implications for the association between aggressive managers and firm value. Using the framework established through the agency view of tax avoidance (Desai and Dharmapala, 2008) I find that on average the presence of aggressive managers is associated with increased firm value. However, consistent with recent research, governance is an important moderating factor whereby firm value in the presence of aggressive managers tends to increase only for relatively better-governed firms

Implicit taxes of u.S. domestic and multinational firms during the past quarter century

Dyreng et al. (2017) find that the effective tax rates for both foreign and domestic firms have been steadily decreasing during recent decades and that multinational firms (MNEs) do not have a tax advantage relative to domestic firms. This paper extends this research and examines implicit taxes for MNEs relative to domestic firms. We find evidence that implicit taxes are approximately 32 percent lower for MNEs. We exploit differences in the exposure to various market frictions to help explain how MNEs could have lower implicit taxes than domestic firms. We find that MNEs face less competition, operate in countries with higher unemployment rates, use patents more frequently, tend to have more global supply chains, and are more vertically integrated when compared to domestic firms. We also find that firms with relatively higher product concentration and relatively lower product similarity exhibit approximately 35 percent lower implicit taxes