Müller, Nicolay, and Voget focus on the interplay between voluntary and mandatory tax reporting that jointly determine tax transparency. By establishing a holistic view of tax transparency, they strive to understand what drives the decision of firms to become tax transparent and to assess its consequences. Using data from voluntary as well as mandatory tax-related disclosures such as the newly required country-by-country reporting, this project will enhance our understanding of the role of tax transparency, the costs and benefits of tax disclosure, and the interplay of tax and financial accounting in shaping firm behavior and ultimately the transparency of publicly listed firms.

• Research Question

  How does mandatory and voluntary tax reporting affect tax transparency, and how does the resulting tax transparency affect profit shifting and firm value?

• Research Motivation

  Analyzing the costs and benefits of tax transparency is important for two reasons: First, several regulation changes mandating higher tax transparency have been initiated in recent years, while accompanied by heated debates about their costs and benefits. Due to the novelty of these regulations, the discussion about their effectiveness has so far proceeded in the absence of empirical evidence. Second, firms choose at the same time to voluntarily disclose tax-related information which exceeds mandatory requirements. Costs and benefits of the observed voluntary tax disclosure are yet largely unexplored.

• Research Program

  The aim of this project is to explore what constitutes tax transparency and which consequences of voluntary and mandatory tax transparency arise. Our objective is to investigate whether and to what extent mandatory and voluntary disclosure of tax-related information affect firm and stakeholder behavior (e.g., including reporting strategy, firm value, customer perception).B y establishing a holistic view of tax transparency, we strive to understand what drives the decision of firms to become tax transparent and to assess its consequences. Using data from voluntary as well as mandatory tax related disclosures such as the newly required country-by-country reporting, we will enhance our understanding of the role of tax transparency, the costs and benefits of tax disclosure, and the interplay of tax and financial accounting in shaping firm behavior and ultimately the transparency of publicly listed firms.

• Research Contribution

  This project contributes to understanding the role of tax transparency regulations and their consequences, and as such delivers valuable information for policy makers.