Influence Tax Avoidance on Bank Loan Contracts with Emphasis on the Moderating Role of Disclosure Quality

Subject Areas : • Risk management and its new technologies

Peyman Amini ^{1 *} , Mohammad Omid Akhgar ² , Arman Moradi ³

1 - Assistant Professor, Accounting Department, University of Kurdistan, Sanandaj, Iran
2 - Assistant Professor, Accounting Department, University of Kurdistan, Sanandaj, Iran
3 - Accounting Department, University of Kurdistan, Sanandaj, Iran

Received: 2024-08-17 Accepted : 2024-12-06 Published : 2024-12-20

Keywords: Tax avoidance, Bank loan contracts, Disclosure quality.,

Abstract :

Objectives: This research aims to investigate the influence of tax avoidance on bank loan contracts, with a focus on the moderating role of disclosure quality from 2013 to 2019.

Design/methodology/approach: The methodology involved gathering data through document mining and referencing bank information. Regression models, including ordinary least squares and logistic methods, were used to fit the data. The panel data model was utilized to test the research hypotheses.

Results: Tax avoidance was found to have a positive effect on bank loan contracts. The impact of disclosure quality on this relationship varied depending on the criteria used to measure tax avoidance. When the effective rate of cash tax paid was used, tax avoidance reduced the three criteria of bank loan structure, cost, and collateral. When using the book tax difference criterion, tax avoidance also reduced the three criteria of structure, cost, and risk of non-payment of bank loans.

Innovation: By focusing on the quality of disclosure as a mechanism to reduce information asymmetry and agency costs, the negative effects of tax avoidance on bank loan contracts can be mitigated.

References:


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