Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/306110 
Year of Publication: 
2024
Citation: 
[Journal:] Contemporary Accounting Research [ISSN:] 650 [Volume:] 41 [Issue:] 3 [Publisher:] John Wiley & Sons, Inc. [Place:] Hoboken, NJ [Year:] 2024 [Pages:] 1893-1924
Publisher: 
John Wiley & Sons, Inc., Hoboken, USA
Abstract: 
We examine the costs associated with public disclosure, as opposed to confidential reporting, of tax country‐by‐country reporting (CbCR) information. Our study addresses a critical knowledge gap, considering the growing adoption of public tax transparency measures. We aim to illuminate this matter by examining the expected costs for firms of making previously confidential CbCR information publicly available. The fact that the information was previously confidentially reported to the tax authorities allows us to assess the cost of publication in isolation. Employing an event study methodology, we provide early evidence on the capital market reaction to this new requirement on a sample of European firms falling within its scope. We document a significantly negative cumulative average abnormal return of EUR 47 billion to 64 billion for up to 3 days following the announcement. Additional cross‐sectional results suggest that concerns about the reputational costs arising from public scrutiny and the proprietary costs from disclosing sensitive business information outweigh the potential benefits of an extended information environment from an investor perspective. Our findings highlight that the public disclosure of tax information imposes significant—and likely unintended—costs from a firm perspective. This aspect should be carefully considered when developing tax transparency measures.
Subjects: 
country‐by‐country reporting
event study
tax avoidance
tax disclosure
tax transparency
communication d'informations fiscales
déclaration pays par pays
étude de cas
évasion fiscale
transparence fiscale
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by-nc-nd Logo
Document Type: 
Article
Document Version: 
Published Version

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