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Corporate tax risk: a literature review and future research directions

Author

Listed:
  • Arfah Habib Saragih

    (Universitas Gadjah Mada
    Universitas Indonesia)

  • Syaiful Ali

    (Universitas Gadjah Mada)

Abstract

Our study aims to analyze the current state of, and avenues for, future studies into the tax risk literature. The construct of the corporate tax risk (tax uncertainty) has increasingly begun to attract significant interest from both academics and practitioners. Most previous studies discussing corporate tax behavior have also focused on tax planning, tax avoidance, and tax evasion. Studies investigating the tax risk are still very limited and it is an underexplored subject. Examining the tax risk is crucial because it relates to the tax outcomes arising from a firm’s taxation activities. Furthermore, analyzing the tax risk simultaneously with other tax behavior constructs may provide a deeper understanding. Despite the importance of the tax risk construct, there is no published literature review regarding the tax risk. Using a systematic review process, this study selected 37 articles published in 21 highly reputable journals listed in the Scopus database. The findings of this study are provided in two sections: (1) A discussion of the current studies of tax risk, including the theories, methods, and measurements of tax risk, its determinants and consequences; and (2) Recommendations for future research agendas. From the review, we find that tax risk research still tends to be limited and understudied; many relevant research gaps can be identified. Finally, we suggest several research directions into 12 themes: corporate governance, executive personal characteristics, executive compensation plans, ownership structure, firm-level characteristics, the external market, institutional factor, accounting and auditing, operating environment, regulators and regulation, reputational costs, and others.

Suggested Citation

  • Arfah Habib Saragih & Syaiful Ali, 2023. "Corporate tax risk: a literature review and future research directions," Management Review Quarterly, Springer, vol. 73(2), pages 527-577, June.
    • Handle: RePEc:spr:manrev:v:73:y:2023:i:2:d:10.1007_s11301-021-00251-8
    DOI: 10.1007/s11301-021-00251-8
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    Cited by:

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    More about this item

    Keywords

    Corporate tax risk; Tax risk; Tax uncertainty; Tax volatility; Literature review;
    All these keywords.

    JEL classification:

    • H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General
    • H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion and Avoidance
    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting
    • M10 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - General
    • M00 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - General - - - General

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