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Collaborative tax evasion in the provision of services to consumers: A field experiment

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  • Doerr, Annabelle
  • Necker, Sarah

Abstract

We conduct a field experiment with sellers of home-improvement services on two German online markets. We take the role of consumers and vary whether we request an invoice for the delivery of the service. In a market which allows anyone to sell anonymously, a willingness to evade is prevalent. In a market that keeps track of credentials, sellers are only willing to evade when a willingness to collude is signaled. The evasion discount is in most estimates not larger than the tax subsidy for legal demand. Evasion is unlikely to be beneficial for many consumers in our setting.

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  • Doerr, Annabelle & Necker, Sarah, 2021. "Collaborative tax evasion in the provision of services to consumers: A field experiment," ZEW Discussion Papers 21-024, ZEW - Leibniz Centre for European Economic Research.
    • Handle: RePEc:zbw:zewdip:21024
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    Cited by:

    1. Buettner, Thiess & Madzharova, Boryana & Zaddach, Orlando, 2023. "Income tax credits for consumer services: A tool for tackling VAT evasion?," Journal of Public Economics, Elsevier, vol. 220(C).
    2. Burgstaller, Lilith & Feld, Lars P. & Pfeil, Katharina, 2022. "Working in the shadow: Survey techniques for measuring and explaining undeclared work," Journal of Economic Behavior & Organization, Elsevier, vol. 200(C), pages 661-671.
    3. Burgstaller, Lilith & Pfeil, Katharina, 2022. "You don't need an invoice, do you? An online experiment on collaborative tax evasion," Freiburg Discussion Papers on Constitutional Economics 22/6, Walter Eucken Institut e.V..
    4. Kotakorpi, Kaisa & Nurminen, Tuomas & Miettinen, Topi & Metsälampi, Satu, 2024. "Bearing the burden — Implications of tax reporting institutions on evasion and incidence," Journal of Economic Behavior & Organization, Elsevier, vol. 220(C), pages 81-134.
    5. Jarkko Harju & Sami Jysmä & Aliisa Koivisto & Tuomas Kosonen, 2023. "Do household tax credits increase consumption? The role of demand elasticity and the extent of demand," Working Papers 8, Finnish Centre of Excellence in Tax Systems Research.
    6. Lilith Burgstaller & Annabelle Doerr & Sarah Necker, 2023. "Do Household Tax Credits Increase the Demand for Legally Provided Services?," CESifo Working Paper Series 10211, CESifo.
    7. Burgstaller, Lilith & Pfeil, Katharina, 2024. "You don’t need an invoice, do you? An online experiment on collaborative tax evasion," Journal of Economic Psychology, Elsevier, vol. 101(C).
    8. Burgstaller, Lilith & Doerr, Annabelle & Necker, Sarah, 2023. "Incentives for Consumers to Act as Tax Auditors: (When) Are They Effective?," VfS Annual Conference 2023 (Regensburg): Growth and the "sociale Frage" 277628, Verein für Socialpolitik / German Economic Association.
    9. Youngrok Kim & Hongyu Wan & Minjo Kang, 2022. "Card or cash? Evidence regarding consumers' cooperative value‐added tax compliance," Asian Economic Journal, East Asian Economic Association, vol. 36(3), pages 337-359, September.
    10. Arezzo, Maria Felice & Horodnic, Ioana A. & Williams, Colin C. & Guagnano, Giuseppina, 2024. "Measuring participation in undeclared work in Europe using survey data: A method for resolving social desirability bias," Socio-Economic Planning Sciences, Elsevier, vol. 91(C).
    11. Kaisa Kotakorpiⓡ & Tuomas Nurminenⓡ & Topi Miettinen ⓡ & Satu Metsälampiⓡ & Kaisa Kotakorpi, 2022. "Bearing the Burden - Implications of Tax Reporting Institutions and Image Concerns on Evasion and Incidence," CESifo Working Paper Series 9791, CESifo.
    12. Kaisa Kotakorpi & Tuomas Nurminen & Topi Miettinen & Satu Metsälampi, 2022. "Bearing the burden – Implications of tax reporting institutions and image concerns on evasion and incidence," Working Papers 3, Finnish Centre of Excellence in Tax Systems Research.

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    More about this item

    Keywords

    Collaborative tax evasion; evasion discount; undeclared work; third-party reporting; field experiment;
    All these keywords.

    JEL classification:

    • H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion and Avoidance
    • C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments
    • E26 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Informal Economy; Underground Economy
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements

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