The Effect of Corporate Ownership, Accruals, and Accounting Loss Compensation on Tax Avoidance

Abstract

Purpose - The aim of this study is to investigate the impact of corporate ownership structures, accruals (conservatism), and accounting loss offsets of relevant companies on tax avoidance based on the data of Borsa İstanbul (BIST) Holding and Investment Companies (XHOLD). Design/Methodology/Approach - In accordance with the research aim, 40 companies for which complete data could be obtained from among the 50 companies listed in the relevant index were included in the study. The data of these relevant companies for the period 2011-2022 were obtained from reliable financial statements that have undergone independent auditing and are available on the Public Disclosure Platform (PDP). Subsequently, these data were subjected to analysis using the panel data analysis method. Findings - According to the research results, the impact of offsetting accounting losses on tax avoidance is positive, while the impact of accruals (accounting conservatism) on tax avoidance is negative. However, no significant impact of corporate ownership on tax avoidance has been detected. Discussion - While the legal and ethical dimensions of tax avoidance are subjects of discussion in the literature, it can be argued that businesses engaging in transparent and honest reporting instead of tax avoidance activities would be viewed more positively by the public. Furthermore, it could be more beneficial for public authorities to review and address gaps in tax avoidance regulations, which would ultimately contribute to a fairer and more effective tax system.