Bachelor Thesis from the year 2019 in the subject Business economics -
Review of Business Studies, grade: 1,3, Otto Beisheim School of
Management Vallendar, language: English, abstract: This thesis
contributes to the large literature of drivers of tax avoidance, for
example tax system characteristics or the degree of tax incidence, by
investigating which kind of firms drive the discovered difference in tax
avoidance between countries. Thereby, it tries to answer the question
which kind of firms benefit the most from common tax mechanisms and thus
use them the most. By doing so, this thesis focus on firm
characteristics that are not part of the tax system itself, but rather
are common characteristics associated with a difference in tax
avoidance. Moreover, the research is complemented by investigating some
tax related country characteristics to answer the question whether the
observed firm-tax avoidance correlations differ depending on certain
country-specific factors. The thesis therewith further completes the
explanation for the difference between the degree of tax avoidance in
different countries. On January 22, 2019, the German political party
Bündnis 90/Die Grünen published a study about the extent of tax
avoidance in the European Union, revealing a gap between the effective
tax rate paid by companies and the statutory tax rate in their home
country. This gap between statutory tax rate and effective tax rate is
one way of considering tax avoidance. There are other definitions as
well, but overall tax avoidance can be seen as not paying the share of
pre-tax income as taxes as intended by the government. In other words,
tax avoidance is the attempt to legally reduce the tax burden paid to
the government as much as possible.
