Double taxation

Tax planning

Linguistics

Philosophy

Government (linguistics)

Tax credit

Accounting

Economics

Tax reform

Business

Corporate governance

Monetary economics

Public economics

Epistemology

Agency cost

Tax avoidance

Finance

Agency (philosophy)

Shareholder

Journal of Accounting and Economics

In state owned enterprises (SOEs), taxes are a dividend to the controlling shareholder, the state, but a cost to other shareholders. We examine publicly traded firms in China and find significantly lower tax avoidance by SOEs relative to non-SOEs. The differences are pronounced for locally versus centrally-owned SOEs and during the year of SOE term performance evaluations. We link our results to managerial incentives through promotion tests, finding that higher SOE tax rates are associated with higher promotion frequencies of SOE managers. Our results suggest managerial incentives and tax reporting are conditional on the ownership structure of the firm.

Agency costs and tax planning when the government is a major Shareholder