Tax planning and strategic decisions : a comparison of UK firms and Turkish firms

Demirbag, Mehmet and Frecknall-Hughes, Jane and Glaister, Keith and Tatoglu, Ekrem (2014) Tax planning and strategic decisions : a comparison of UK firms and Turkish firms. In: Academy of International Business Annual Meeting, 2014-06-23 - 2014-06-26.

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This paper investigates a number of research questions related to tax planning, an area where there has been little prior empirical research, by examining the perceptions of two groups of tax practitioners, one group employed in UK firms and another group employed in Turkish firms. This facilitates both an examination of responses from within each country and a cross-national comparison of tax planning issues. There are several statistically significant differences between the perception s of UK practitioners and Turkish practitioners. We find that the tax planning variables ‘relative importance of tax factors in decision making’, ‘strategic decisions are taken after tax decisions and tax decisions take priority over strategic decisions’ and the ‘extent of formal strategic planning’ are relatively more important for Turkish firms than for UK firms. In contrast the variables the ‘nature of tax planning’, ‘tax planning costs compared to savings’, ‘relative importance of non-tax factors in decision-making’, ‘strategic decisions and tax decisions are integrated and taken at the same time’ and the ‘disconnect between strategic decisions and tax decisions’ are all relatively more important for UK firms than for Turkish firms. The paper makes a new contribution to the literature by providing evidence from a cross-national study on the nature of tax planning and the way in which strategic decisions interface with tax decisions.