Identifying tax aggressive behaviour: testing the proxies

Rick Krever, Kerrie Sadiq, Bronwyn McCredie

Research output: Contribution to journalArticlepeer-review


The proprietary nature of corporate management tax policy and corporate tax
return information results in very little information being known about the tax
aggressive behaviour of these entities. Despite this lack of inside knowledge, tax
scholars have continued to attempt to identify corporate tax aggressiveness via
the use of proxies using publicly available data. There are numerous different
proxies, each with different characteristics as well as perceived advantages
and disadvantages. Two common proxies that allow for a continuous ranking of
corporate taxpayers are effective tax rates and book-tax differences. Yet, even
these proxies can be and are calculated in multiple ways using a variety of data
and methodologies. There are also dichotomous proxies such as a presence in a
harmful tax regime and involvement in tax disputes. The purpose of this study is
to evaluate the application of the different proxies to determine whether there
is any consistency in the manner in which they estimate the tax aggressiveness
of large publicly listed corporate entities. A total of 16 proxies were used: seven
effective tax rate proxies, seven book-tax differences proxies, one harmful
tax regime proxy, and one tax dispute proxy. The proxies were applied to the
Australian Stock Exchange top 200 companies (ASX200) to determine whether
there was any consistency in the outcomes from the application of the proxies.
Original languageEnglish
Pages (from-to)27-63
Number of pages37
JournalAustralian Tax Forum: a journal of taxation policy, law and reform
Issue number1
Publication statusPublished - Mar 2022


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