International Tax and Public Finance

, Volume 26, Issue 1, pp 145–166 | Cite as

Does the government-mandated adoption of international financial reporting standards reduce income tax revenue?

  • Chih-Wen Mao
  • Wen-Chieh WuEmail author


The mandatory adoption of International Financial Reporting Standards (IFRS) has been the most noteworthy accounting regulatory change in a multitude of countries. After adopting IFRS, the gap between accounting earnings and taxable income increases in most of these countries. Previous literature suggests that low book-tax conformity is associated with higher corporate tax avoidance, thereby collecting lower income tax revenues. This study applies the propensity score matching method and the difference-in-differences design to empirically examine the impact of the government-mandated adoption of IFRS on a country’s income tax revenue. Using panel data of 137 countries covering the period from 2000 to 2010, the empirical results show that the mandatory IFRS adoption results in a decrease in income tax revenue.


International Financial Reporting Standards Income tax revenue Propensity score matching Difference-in-differences 

JEL Classification

M40 M48 H26 F60 



We appreciate the insightful comments and suggestions from the anonymous reviewers and the editor.


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© Springer Science+Business Media, LLC, part of Springer Nature 2018

Authors and Affiliations

  1. 1.Department of Public Finance and Tax AdministrationNational Taipei University of BusinessTaipei CityTaiwan, ROC
  2. 2.Department of Public FinanceNational Chengchi UniversityTaipei CityTaiwan, ROC

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