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Tax Aggressiveness and Earnings Persistence and Its Components

Authors: Ederaldo Lima; Claudia Alves Perez; Antonio Lopo Martinez;

Tax Aggressiveness and Earnings Persistence and Its Components

Abstract

The objective of this research is to analyze if companies with higher tax aggressiveness have different levels of earnings persistence components, specifically: i) book-tax differences and ii) tax profit. The study period was from 2010 to 2016, involving Brazilian companies listed on B3. The most aggressive companies ranked tax-dependent by the Effective Tax Rate metric. The results showed that companies, when segregated by levels of tax aggressiveness, present differentiated earnings persistence in their components. It is noted that, in most tax- aggressive companies, tax profit becomes a determining factor for future book income. This paper contributes to the accounting literature by identifying the impact of taxation on earnings quality, in particular, for earnings persistence, which is a fundamental requirement for greater managerial and tax predictability and greater value direction for companies.

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selected citations
These citations are derived from selected sources.
This is an alternative to the "Influence" indicator, which also reflects the overall/total impact of an article in the research community at large, based on the underlying citation network (diachronically).
BIP!Citations provided by BIP!
popularity
This indicator reflects the "current" impact/attention (the "hype") of an article in the research community at large, based on the underlying citation network.
BIP!Popularity provided by BIP!
influence
This indicator reflects the overall/total impact of an article in the research community at large, based on the underlying citation network (diachronically).
BIP!Influence provided by BIP!
impulse
This indicator reflects the initial momentum of an article directly after its publication, based on the underlying citation network.
BIP!Impulse provided by BIP!
0
Average
Average
Average
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