Banca de DEFESA: ALINE MENDONÇA DE ANDRADE

FEES PAID TO INDEPENDENT AUDITORS FOR SERVICES TAX AND TAX AVOIDANCE OF BRAZILIAN COMPANIES

Auditor-Provided Tax Services (APTS), tax avoidance, effective corporate income tax rate, tax planning

The present study verified whether, in Brazil, the level of tax avoidance of the firm, measured through the different ways of representing the effective corporate income tax rate, varies according to the remuneration value paid to the independent auditor for the tax services provided in together with the audit services. For this, a study was carried out with data extracted from the financial statements in the Economática database and data collected in the reference form referring to the period from 2011 to 2020, with a total of 1,584 company-year observations in an unbalanced panel. Statistical analysis for estimating the coefficients was performed using ordinary least squares and fixed effects with Driscoll and Kraay estimator. The results suggest that the amount of remuneration paid to the independent auditor for the tax services provided in conjunction with the audit services positively influences the company's tax avoidance, and it was verified that managers reduce the tax burden through strategies that affect accounting profit and taxable income, carry out tax planning through tax deferral and postpone the payment of income tax and social contribution to future years. As additional results, evidence that complements the studies by Santos et al. (2021) when exposing that both the fact that a company only buys tax services from the auditor and the fact that it pays higher amounts for tax services in relation to the entire amount paid to the audit firm positively affect the company's tax avoidance. In addition, in a sample where companies that did not pay their auditors for tax services were disregarded, it was found that the tax services remuneration provided by the auditor was related in different ways with the tax avoidance proxies, with strategies being observed that affect more intensely the deferred component of the effective corporate income tax rate, in addition to strategies that do not postpone the taxes payment to a future moment. Finally, it was concluded that measuring the main explanatory variable through the ratio between the amount paid for tax services and the total amount paid to the audit firm or by calculating the logarithm of amounts paid by the tax service does not interfere with the results, maintaining the positive relationship with tax avoidance. The study contributes to the national and international literature by reinforcing the existence of an overflow of knowledge between the joint provision of tax and audit services and the reduction of the tax burden. Furthermore, it brings evidence of the use of different ways of measuring the effective corporate income tax rate as proxies of tax avoidance, demonstrating the different perspectives of carrying out tax planning.