The role of regional tax autonomy, firm size, and business groups in tax avoidance: evidence from Spain

• Aitor Garmendia-Lazcano ^[1] ; Laura Baselga-Pascual ^[1]
  1. [1] Universidad de Deusto

     Universidad de Deusto

     Bilbao, España

     
• Localización: Revista española de financiación y contabilidad, ISSN 0210-2412, Vol. 54, Nº 1, 2025, págs. 25-36
• Idioma: inglés
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• Resumen

  • This paper investigates the influence of regional tax autonomy, firm size, and business group affiliation on corporate tax burden in a large sample of Spanish firms, including non-listed firms, from 2007 to 2016. Our findings reveal that firms located in tax-autonomous regions exhibit lower effective corporate tax rates (ETR), providing new empirical support for the horizontal tax competition theory. Additionally, we identify a positive relationship between firm size and corporate tax burden, aligning with the political cost theory. Furthermore, we find that group-affiliated firms face a higher ETR than independent firms, and that group affiliation attenuates the differences in the tax burden experienced by large and small firms.