Effect of tax aggressiveness on CEO turnover

Authors

DOI:

https://doi.org/10.5380/rcc.v12i2.73736

Keywords:

Tax Aggressiveness, CEO turnover, Chief Executive Officer, Effective Tax Rate

Abstract

This study verifies the influence of corporate tax aggressiveness on replacing the Chief Executive Officer - CEO. Tax Aggressiveness can be a determinant of CEO turnover in companies listed on the Brazilian stock exchange B3. Efficient tax planning is essential for any organization, being a manager's duty to avoid paying unnecessary taxes. Methodologically, the study uses three tax aggressiveness metrics to verify the nature of this relationship from 2010 to 2016, ranking the results by quintile and identifying the high and low extremes of tax aggressiveness. Also, control variables were used to reduce the bias of the proposed regression. Two of the proxies of tax aggressiveness, Cash Effective Tax Rate Long Run Effective Tax Rate, showed significant low tax aggressiveness. The results evidence that less tax aggressive CEOs are more likely to be replaced. For managers, the findings reinforce that tax planning is a determinant factor to remain in the position.

Author Biography

Antonio Lopo Martinez, Universidade de Coimbra

Doutorando em Direito Universidade de Coimbra (Portugal) e da Universidad de Salamanca (España)

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Published

2021-01-26

How to Cite

Lopo Martinez, A., Brito, F. O., & Chiachio, V. F. de O. (2021). Effect of tax aggressiveness on CEO turnover. Revista Contabilidade E Controladoria - RC&C, 12(2). https://doi.org/10.5380/rcc.v12i2.73736

Issue

Vol. 12 No. 2 (2020): VOLUME 12 | NÚMERO 2 | MAI./AGO. | 2020

Section

Articles

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