Corporate Tax Avoidance

This thesis examines the association between degree of firm’s tax avoidance and its determinants. Then, it investigates the moderating effect of corporate governance on that relation. Using panel data of public U.S. companies from 2000 to 2015, I find that three firm characteristics: firm size, financing structure, and capital intensity, significantly correlate with effective tax rates. Firm size has a positive correlation with effective tax rates, while financing leverage and capital intensity shows an inverse association with effective tax rates. These findings imply that higher companies avoid less corporate income tax than small corporations. On the other hand, a company with higher long-term debt and tangible assets have more chance to minimize their tax burden. However, this thesis fails to find significant results regarding moderating effect of corporate governance on those correlations even though after employing various governance measures.