International Journal of Corporate Finance and Accounting (IJCFA)
Abstract
The effects of corporate tax reforms in reported profits and firms’ financial position have been extensively
studied in the literature. However, only few studies disaggregate deferred tax items to jointly explore political
implications and aspects of corporate behavior around such reforms. Greece’s recent financial crisis and
economic recession provides an intriguing setting for examining possible incentives and consequences of
substantial tax rate changes, such as the 6% increase imposed by the Greek Government in year 2013. Results
reveal a totally different picture between financial and non-financial firms, with the former being clearly favored, at least from this short-run effect. These findings seem to coincide with the view that tax policy design
is usually shaped by taking into consideration powerful groups’interests. Regarding probable Determinants
of Deferred Tax Assets for Tax Loss Carry forwards, the authors find that firms the audit firm may significantly
affect recognized amounts due to firm specific internal guidelines and due to the overall quality of the audit