Corporate and Personal Income Tax Declarations

20 Pages Posted: 10 Aug 2006

See all articles by Laszlo Goerke

Laszlo Goerke

University of Trier - Institute of Labour Law and Industrial Relations in the European Union; CESifo (Center for Economic Studies and Ifo Institute); IZA Institute of Labor Economics

Date Written: August 2006

Abstract

Decisions by firms and individuals on the extent of their tax payments have generally been treated as separate choices. Empirically, a positive relationship between corporate and personal income tax evasion can be observed. The theoretical analysis in this paper shows that a manager's decision on the firm's behaviour will be independent of his personal preferences if the gain from reducing corporate tax payments is certain, as in the case of tax avoidance. If, however, the firm evades taxes so that the manager's income depends on whether the firm's activities are detected or not, corporate and personal income tax evasion choices cannot be separated.

Keywords: firms, individuals, tax evasion, uncertainty

JEL Classification: H24, H25, H26

Suggested Citation

Goerke, Laszlo, Corporate and Personal Income Tax Declarations (August 2006). IZA Discussion Paper No. 2239, CESifo Working Paper Series No. 1781, Available at SSRN: https://ssrn.com/abstract=923555

Laszlo Goerke (Contact Author)

University of Trier - Institute of Labour Law and Industrial Relations in the European Union ( email )

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