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Free keywords:
Anti-tax-avoidance regulation, corporate tax planning, mandatory disclosure rules, tax consultants
Abstract:
This paper addresses the debate over aggressive tax‐planning models and analyzes the role of tax consultants. It focusses on the dynamic interaction between innovation and imitation of aggressive tax‐planning products and governmental tax regulation and highlights the importance of the length of regulatory lag in comparison to the time it takes the tax‐consulting industry to imitate newly innovated tax‐avoidance products. It reveals an alignment of interests between highly innovative tax‐consulting firms and the governmental tax legislator/regulator. The conclusions are also relevant for the policy debate on mandatory disclosure rules about aggressive tax‐planning models.
