Tax avoidance and state ownership : The case of Sweden

Summary, in English

We propose a simple theoretical model for how a company with both private and state shareholders decides on its optimal tax policy. The model predicts that even in the absence of state shareholding, a company will not always pick a tax policy that minimizes taxes. Conversely, majority state ownership will generally not result in zero tax avoidance. Using panel regressions on the entire population of state-owned as well as publicly listed Swedish companies from 2000–2019, we find that a one standard deviation increase in state ownership increases corporate tax payments by around 14%.

• Author: Axel Hilling; Frederik Lundtofte; Niklas Sandell; Amanda Sonnerfeldt; Anders Wilhelmsson
• Department/s: Department of Business Law; Accounting and Corporate Finance; Department of Business Administration; Department of Economics
• Publishing year: 2021-09-01
• Language: English
• Publication/Series: Economics Letters
• Volume: 208
• Links: http://dx.doi.org/10.1016/j.econlet.2021.110063
• Document type: Journal article
• Publisher: Elsevier
• Topic: Economics; Law (excluding Law and Society)
• Keywords: Tax avoidance; Ownership structure; State ownership; H26; G32
• Status: Published
• Project: Tax reporting for a sustainable society
• ISBN/ISSN/Other: ISSN: 0165-1765