Title: Disclosure of tax incentives and the corporate liabilities in Brazilian public companies: a quantitative study

Authors: Henrique Formigoni; Liliane Cristina Segura; Flavio Roberto Mantovani; Francisco Alegria Carreira; Rute Abreu

Addresses: CCSA – Center of Applied Social Science, Presbyterian Mackensie University, Rua da Consolação, 930, 01302-907, São Paulo, Brazil ' CCSA – Center of Applied Social Science, Presbyterian Mackensie University, Rua da Consolação, 930, 01302-907, São Paulo, Brazil ' CCSA – Center of Applied Social Science, Presbyterian Mackensie University, Rua da Consolação, 930, 01302-907, São Paulo, Brazil ' Department of the Business and Administration School, Instituto Politécnico de Setúbal, Portugal ' Instituto Politécnico da Guarda, Business and Economics Scientific and Technical Unit, Technology and Business Higher School at the Instituto Politécnico da Guarda, Portugal

Abstract: This article aims to evaluate the effect of tax incentives on the liability level of firms listed in Brazilian Stock Exchange. Obtaining the tax incentives require many investments from the company. This paper contributes with the literature to identify if the companies that disclosed their fiscal incentives have any changes in their debt, because of these investments. The final sample was 382 firms, for the years 2010-2013, and with a total of 1,528 observations. We used a regression model for the panel data in order to estimate the relation between liabilities and the fiscal incentives. The results show that encouraged firms have higher long-term debt and total debt than those who are not encouraged. In addition, the authors found a positive relationship between the assets of these companies and the tax incentive.

Keywords: tax incentives; disclosure; corporate liabilities; Brazil; public companies; corporate debt; fiscal incentives; corporate assets.

DOI: 10.1504/IJAUDIT.2016.081984

International Journal of Auditing Technology, 2016 Vol.3 No.2, pp.95 - 112

Received: 07 Apr 2016
Accepted: 04 Jul 2016

Published online: 31 Jan 2017 *

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