The Impact of Corporate Governance Monitoring Mechanisms and Tax Complexity on Corporate Tax Aggressiveness: Empirical Evidence from Australia and Hong Kong

Project: Research

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Corporate tax aggressiveness is described as downward manipulation of taxable income through tax planning activities that may involve tax evasion (Frank et al., 2006). A series of relatively recent global corporate scandals involving major corporations such as Enron, Parmalat, Tyco, WorldCom and Yukos have drawn considerable public, government and investor attention to the growth of corporate tax aggressiveness, which employ complex tax arrangements (e.g. transfer-pricing) for tax manipulation purposes. Regarding Enron, data for the 1996-2000 period show that it produced pretax profits approaching US$1.8 billion, but paid no federal income tax and was, in fact, a net recipient of tax rebates from government (Christensen & Murphy, 2004). However, no previous study has considered the impact of corporate governance monitoring mechanisms (e.g. board of director composition, board stock ownership and board size) and tax complexity on corporate tax aggressiveness. Thus, the researchers would like to fill this gap in the literature.


Project number7002421
Grant typeSRG
Effective start/end date1/04/094/01/12