A Review of the Effect of the Life Cycle on Tax Avoidance of Firms

Subject Areas :

Ghodrat Allah Taleb Nia ¹ , Hossein Rajabdorri ² , Fatemeh Dehghan ³

1 - دانشیار عضو هیات علمی دانشگاه آزاد اسلامی واحد علوم تحقیقات تهران،
2 - Accounting Ph.D student and Member of Young Researchers and Elite Club, Bandar Abbas Branch, Islamic Azad University, Bandar Abbas, Iran
3 - Master of Accounting, Hafez Non-profit institution of higher education, Shiraz, Iran

Received: 2017-06-19 Accepted : 2017-09-20 Published : 2017-11-22

Keywords: Tehran Stock Exchange, Life Cycle, Tax Avoidance, The Effective Tax Rate,

Abstract :

The present study aims to review the effect of life cycle on tax avoidance of firms. Based on the available theoretical bases, firms have unique and various planning during different stages of their life cycles, among which the rate of tax avoidance is not an exception. The present study is an applied research and it uses post-event method. The variables of study are examined using information of financial statements. Period of study includes 2006 to 2015 and the selected sample consists of 95 firms that are accepted in Tehran Stock Exchange. To review the hypotheses of the study, ordinary least square regression in Eviews software version 9 and ANOVA in SPSS software version 22 are used. The findings show that there is a significant relation between life cycle and tax avoidance of firms. In addition, there is a significant statistical difference at the level of 99 percent between various levels of life cycles of firms. This subject is more in the growth and decline levels and less in puberty level. The main result of the study can be considered as a confirmation of the theory of Zohurhassan et al (2016). According to their view, tax avoidance has a U-shaped pattern in the levels of life cycle of the firm that is more significant in growth and decline levels and less common in puberty level. The findings of the present study, also, confirm this theory.  

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