Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/191406
Authors: 
Bjørneby, Marie
Alstadsæter, Annette
Telle, Kjetil
Year of Publication: 
2018
Series/Report no.: 
CESifo Working Paper No. 7381
Abstract: 
Third-party reporting and employers’ tax withholding are powerful compliance mechanisms, as long as the employer and employee do not collude to evade. Using data from randomly assigned on-site audits among 2,462 Norwegian firms, we provide evidence of collusive tax evasion. We find that firms assigned to be audited increased their subsequent wage reporting on behalf of their employees by 18 percent relative to firms assigned to the control group. The effect is more pronounced among small firms with few employees. Our results document the limitations of third-party reporting, but also that these limitations can be counteracted by relatively inexpensive on-site audits.
Subjects: 
collaborative tax evasion
collusive tax evasion
random audits
undeclared work
third-party reporting
JEL: 
E26
H26
H32
Document Type: 
Working Paper

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