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Articles in Press

Tax Audit and Tax Evasion: Evidence from Taiwanese Firms (in Chinese)

  • Author Yu-Chun Cheng , Tze-Ting Yang, and Hsing-Wen Han
  • Abstract This paper examines the causal effect of corporate tax audits on firms’ behaviors using a unique corporate tax audit policy in Taiwan, which involves lower audit effort for firms with reported revenues just below 30 million NTD. The study focuses on how firms “control” the cost and expense to minimize their tax burden. To simplify the analysis, we investigate whether there is a significant difference in salary expenditure of the firms using a unique corporate tax audit policy. We use the corporate tax return data and income registry data from Fiscal Information Agency between 2004 and 2014. To reduce the selection bias, the “Propensity score matching” method is adopted. We find this policy significantly decreases salary expenditure, and lead to annual tax losses of about 2 billion to 3 billion.
  • Link http://www.econ.sinica.edu.tw/UpFiles/2013090214141704234/Messagess_Flies2013100417174743120/S10817刊登定稿(New).pdf