TAX AGGRESSIVENESS AND TAX DISPUTE EXPOSURE: EVIDENCE FROM BRAZIL

Resumo

This study examines the association between tax aggressiveness and tax dispute exposure
among Brazilian firms listed on B3 from 2017 to 2022. The sample comprises 233 non-financial
companies across 27 industries, using data from Comdinheiro® and firms' explanatory notes.
Tax dispute exposure is measured as tax provisions plus contingent tax liabilities scaled by total
assets. Tax aggressiveness is proxied by abnormal book–tax differences (BTDA), the effective
tax rate on profits (ETR), and the tax burden on value added (TTVA), assessed with 1-, 3-, and
5-year lags. Multiple linear regressions are estimated with standard controls (size, leverage,
profitability, and operating performance). Results are consistent with higher dispute exposure
among firms with greater BTDA and TTVA, while higher ETR associates with lower exposure
in the short run. These associations should be interpreted as observational, given measurement
limitations and potential endogeneity. From a policy and regulatory perspective, findings
provide empirical grounding for discussions on tax simplification, cooperative compliance
design, and mandatory disclosure of tax uncertainty—particularly relevant in the context of
Brazil's ongoing tax reform and persistent administrative dispute backlogs.