Implications of Adopting CPC 47 on the Tax Avoidance of Listed Brazilian
Companies
Name: JOÃO VICTOR COELHO DECOTÉ
Publication date: 13/08/2024
Examining board:
Name |
Role |
|---|---|
| GIUSEPPE TREVISAN CRUZ | Examinador Externo |
| JORGE DE SOUZA BISPO | Examinador Externo |
| VAGNER ANTONIO MARQUES | Presidente |
Summary: The adoption of CPC 47, which introduced more flexible guidelines for revenue recognition, may
have incentivized an increase in corporate tax aggressiveness, as taxpayers tend to exploit such
opportunities to optimize their tax positions. This study aims to analyze the implications of CPC
47 implementation on the tax aggressiveness of companies listed on B3 during the period from
2010 to 2023, and to investigate how sectors more vulnerable to normative changes have
influenced this dynamic. The national literature remains sparse concerning studies that address the
relationship between CPC 47 and tax aggressiveness of B3-listed firms, as well as the specific
impact on sectors most exposed to accounting changes. Data from 471 companies were analyzed
using descriptive statistics, mean difference tests, and panel data regression. Descriptive statistics
and panel data regressions indicated that the adoption of CPC 47 generally led to increased tax
aggressiveness among companies. However, tax aggressiveness in sectors identified by the
literature as more susceptible to the effects of CPC 47 exhibited the opposite trend, decreasing
after the change in revenue recognition standards, highlighting the complexity of tax
aggressiveness dynamics in the Brazilian context. This complexity was further underscored by
additional analyses that examined how the most aggressive companies behaved post-adoption of
CPC 47 and how entities in more exposed sectors under the large taxpayer monitoring regime of
the Brazilian Federal Revenue reacted to the new revenue recognition standards. The findings of
this study provide significant contributions to understanding the fiscal stance adopted by
companies in response to flexible accounting changes such as CPC 47. Specifically, they shed
light on how normative flexibility impacts tax aggressiveness across different sectors and how
companies adjust their tax strategies in response to new accounting guidelines. Additionally, the
study offers insights into the interaction between corporate tax practices and the Brazilian Federal
Revenue’s monitoring program, illustrating how fiscal oversight can affect compliance and tax
aggressiveness. These findings have substantial implications for regulators, accounting
professionals, and scholars, offering empirical evidence for evaluating the effectiveness of
accounting standards and fiscal policies in contexts of normative flexibility.
