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The Influence Of The Connections Of Romanian Non-Listed Firms To Tax Havens On Their Profitability

Listed author(s):
  • Mihai-Bogdan AFRASINEI

    ()

    (Associate Assistant Professor, Alexandru Ioan Cuza University of Iasi, Romania)

  • Iuliana Eugenia GEORGESCU

    ()

    (Professor, Alexandru Ioan Cuza University of Iasi, Romania)

  • Costel ISTRATE

    ()

    (Professor, Alexandru Ioan Cuza University of Iasi, Romania)

Registered author(s):

    The offshore entities have become one of the most efficient solutions for tax avoidance and are used by taxpayers almost all around the world. This paper investigates the influence of the connections (via subsidiaries or shareholders) of Romanian non-listed firms to tax havens on their profitability and effective tax rate. In this regard, we used a sample of 7,167 Romanian firms (3,370 with connections to tax havens and 3,797 without tax havens connections). For statistical analysis, we used the simple and multiple linear regression methods with dummy variables. Results have shown that the presence of Romanian non-listed firms in tax havens significantly influences their profitability and effective tax rate. The firms with connections to tax havens have a return on equity ratio higher, a return on assets ratio lower, a gross profit margin ratio lower, a total assets turnover ratio higher and an effective tax rate lower than companies without connections to such jurisdictions

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    File URL: http://www.ceswp.uaic.ro/articles/CESWP2016_VIII4_AFR.pdf
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    Article provided by Centre for European Studies, Alexandru Ioan Cuza University in its journal CES Working Papers.

    Volume (Year): 8(4) (2016)
    Issue (Month): 4 (December)
    Pages: 572-596

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    Handle: RePEc:jes:wpaper:y:2016:v:8:i:4:p:572-596
    Contact details of provider: Web page: http://cse.uaic.ro

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