Authors: Evangelos Koumanakos

Title: Policy induced tax avoidance: empirical evidence form the accommodation sector in Greece

Abstract

How does legislation affect firms’ tax aggressiveness? This paper exploits quasi-experimental variation created by the Assets Revaluation, a corporate tax rule introduced in 1992. Taxation on realized goodwill from revaluated assets is asymmetric: accommodation firms deserve a 50 percent discount on the implied rates. At the same time, the accommodation sector, frequently called the “heavy industry” of the Greek economy, is the only sector in which the number of loss firms exceeds that of profitable. This study uses administrative data to measure corporate tax avoidance and interpret the consequences of an established tax policy.