Authors: EVANGELOS KOUMANAKOS, Grigorios Lazos, Theodoros Roumelis

Title: The role of tax authority audits in corporate tax compliance: empirical evidence from Greece

Abstract

The issue of tax compliance and the relationship between taxpayers and tax authorities has over the last years concentrated the interest of academic research given the worsening economic conditions and budget cuts that tax administrations around the world are encountering. This paper investigates, at firm-level, the ex post consequences of actual tax audits in tax compliance behavior of private corporations in Greece. The initial sample includes all tax offenders to which during the years 2006-2011 the Greek tax authorities after a tax inspection pressed charges for previous years’ tax infringements. Results confirm prior literature about the mitigating role of tax audits since as it is evidenced here the book-tax gap for the years after the audit is significantly lower than the book tax gap for the years prior to the audit.