[Purpose]The purpose of this study is to analyze the relationship between tax error and corporate tax avoidance behavior.
[Methodology]In this study, three research hypotheses were established and empirical analysis was conducted to verify the relatio...
[Purpose]The purpose of this study is to analyze the relationship between tax error and corporate tax avoidance behavior.
[Methodology]In this study, three research hypotheses were established and empirical analysis was conducted to verify the relationship between tax error and corporate tax avoidance.
[Findings]First, it was confirmed that the year of insufficient national tax revenue, there was a lower level of tax avoidance than the year of excess tax revenue. Second, the result of controlling the tax revenue shortage of the entire country and checking the level of tax avoidance in the year when the tax revenue shortage occurred by region also confirmed that there was a negative (-) relationship between the tax shortage and tax avoidance tendency of local agencies. Third, as a substitute for tax source management efforts due to lack of tax revenue, the previous hypotheses 1 and 2 are additionally verified using the tax audit ratio. As the tax audit ratio of all countries or regions increases, the level of tax avoidance of individual companies will decrease, confirming a negative (-) relationship between the tax avoidance measure and the tax audit ratio.
[Implications]This paper shows evidence that regional tax source management, which is independent of tax source management due to the lack of tax revenue of the entire country, is also related to tax avoidance in the region.