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The Impact of Earnings Management and Sustiability Performance on Corporate Tax Avoidance: The Moderating Role of Financial Leverage
Mahdi Kazemioloum1 , Mohsen Khotanlou *2 , Matin Raoufi3
1- Assistant Professor, Department of Accounting, Faculty of Economic and Social Science, Bu-Ali Sina University, Hamedan, Iran.Email: m.kazemiolum@basu.ac.ir
2- Assistant Professor, Department of Accounting, Faculty of Economic and Social Science, Bu-Ali Sina University, Hamedan, Iran.Email: mkhotanlou@basu.ac.ir (Corresponding Author) , mkhotanlou@basu.ac.ir
3- Msc, Department of Accounting, Faculty of Economic and Social Science, Bu-Ali Sina University, Hamedan, Iran Email: m.raoufi.ac@gmail.com
Abstract:   (44 Views)
Taxation is one of the most significant sources of government financing, playing a crucial role in funding public budgets and achieving economic, social, and sustainable development goals. In Iran, despite efforts to reduce reliance on oil revenues, the share of tax revenues in the country’s total financial resources remains below the desired level. Consequently, identifying the factors influencing corporate tax behavior is of great importance. This study aims to investigate the impact of earnings management and Sustiability performance on tax avoidance in companies listed on the Tehran Stock Exchange, as well as the moderating role of financial leverage in these relationships. Data from 92 companies listed on the Tehran Stock Exchange were collected over the period from 2013 to 2024, and the research hypotheses were tested using panel data and multiple regression analysis. The results indicate that earnings management, both accrual-based and real, has a positive and significant effect on tax avoidance. Conversely, improved performance in environmental, social, and governance areas is associated with a reduction in tax avoidance. Additionally, financial leverage plays a significant moderating role in these relationships, weakening the direct effect of earnings management on tax avoidance while strengthening the mitigating effect of environmental, social, and governance performance. The findings suggest that although companies use earnings management as a tool to reduce their tax burden, strong performance in ESG areas and a capital structure reliant on debt can reduce the intensity of tax avoidance behaviors.
Keywords: Tax Avoidance, Financial Leverage, Earnings Management, Sustiability Performance.
     
Type of Study: Research | Subject: Special
Received: 2025/07/23 | Accepted: 2026/03/1
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