organizational culture and corporate tax compliance (The Case study of Large Taxpayers Units)

Document Type : Research Paper


Associate Prof., Faculty of Social Sciences and Economics, alzahra University


Regarding the critical role of tax and tax revenues in developing the country`s economy and achieving social objectives, recognition the factors affecting tax compliance is very important. Understanding these factors in order to design efficient methods to increase tax revenues, requires an understanding of the behavioral aspects of judgment and decision making for taxpayers on tax compliance. Since tax payers’ decision to compliance is a function of cultural norms, therefore it is critical to consider the influence of culture. This study examines the relationship between organizational culture and corporate tax compliance. In this study to measure organizational culture, Hofstede's Cultural questionnaire and to measure corporate tax compliance, an index based on the difference between expression and certain taxes is used. Sample of this study included 65 companies from Large Taxpayers Units during the period 1387 to 1391. The conclusions show that organizational culture has a significant effect on corporate tax compliance and corporate tax compliance by low uncertainty avoidance, high individualism, low power distance and high masculinity determined.


Alm, J. & Torgler, B. (2006). Culture differences and tax morale in the United States and in Europe. Journal of Economic Psychology, (27): 224–246.
Alm, J., Bahl, R. & Murray, M. N. (1990). Tax structure and tax compliance. The Review of Economics and Statistics, (72): 603–613.
Alm, J., Sanchez, I. & De Juan, A. (1995). Economic and noneconomic factors in tax compliance. KYKLOS, 48(1): 141–171.
Balthazard, P. A. & Cook, R.A. (2004). Organizational culture and Knowledge Management Success: Assessing the Behavior-Performance Continuum. Proceedings of the 37th Hawaii International Conference on System Science. 5-8 Jan. DOI: 10.1109/HICSS.2004.1265577.
Bame-Aldred, C.W., Cullen, J.B., Martin, K.D. & Parboteeah, K.P. (2013). National culture and firm-level tax evasion. Journal of Business Research, 66(3): 390-396.
Begue, J. (1976). On culture and tax. Economie et Statistique. 84: 97–104.
Braun, G. P., Putnam, K. & Bagchi, K. (2006). Culture and international tax rates: An empirical investigation. Working Paper. El Paso: University of Texas.
Cummings, R.G., Martinez-Vanquez, J., McKee, M. & Johnson, E.J. (2004). Effects of culture on tax compliance: A cross check of experimental and survey evidence. CREMA Working Paper Series. 2004-13. Basel, Switzerland.
Doupnik, T. S. & Tsakumis, G. T. (2004). A critical review of tests of Gray’s theory of cultural relevance and suggestions for future research. Journal of Accounting Literature, 1(23): 1–48.
Elster, J. (1989). Social Norms and Economic Theory. Journal of Economic Perspectives, 3 (1): 99-117.
Frey, B. S. & Weck-Hannemann, H. (1984). The hidden economy as an unobserved variable. European Economic Review, 1 (26): 33–53.
Hanlon, M. & Heitzman, S. (2010). A review of tax research. Journal of Accounting and Economics, 1(50): 127–178.
Harrison, D et all., (1993). The impact of U.S. tax law revision on multinational corporations’ capital location and income-shifting decisions. Journal of Accounting Research (31): 111–140.
Hashemi, A. & Mehrabi, M. (2009). Identifying Tax Factors Effecting Debt Tax Advantage in Financing for listed Firms in Tehran Stock Exchange. The Iranian Accounting and Auditing Review, 15(54):137-145. (in Persian)
Hill, A.T., Lewis, P. & Millrmser, M. (2000). A Human Resource Strategy Approach Managing Change, ACAD MANAGE REV, 13(3) 454-470
Hofstede, G. (1980). Culture’s consequences: International differences in work-related values. London: Sage Publications.
Hofstede, G. (1986). Cultural differences in teaching and learning. International Journal of Intercultural Relations, 10(3): 301-320.
Hofstede, G. (1991). Cultures and organizations: Software of the mind. London: McGraw-Hill Book Company (UK) Limited.
Hofstede, G. (1994). Values Survey Module 1994 Questionnaire (VSM 94). Tilburg, Netherlands: Institute for Research on Intercultural Cooperation (IRIC).
Hofstede, G. (2001). Culture’s consequences: Comparing values, behaviors, institutions, and organizations across nations. Thousand Oaks: Sage Publications.
Husted, B. W. (1999). Wealth, culture, and corruption. Journal of International Business Studies, 2(30): 339–359.
Knack, S. & Keefer, P. (1997). Does Social Capital Have an Economic Payoff? A Cross- country Investigation. Quarterly Journal of Economics, 4(112): 1251-88.
Korte, R. & Chermack, T. (2007). Changing Organizational Culture with Scenario Planning. Journal of Futures, 6(39): 645- 656.
Martin, J. (2002). Organizational Culture. Thousand Oaks, California: Sage publications.
Naylor, R. (1989). Strikes, Free Riders, and Social Consensus. Quarterly Journal of Economics, (104): 771-786.
Noravesh, I. & Dianati, Z. (2003). The Impact of Culture on Accounting Values. The Iranian Accounting and Auditing Review, 10(33): 3-40. (in Persian)
Noravesh, I. & Sepasi, S. (2005). Impact of Culture on Income Smoothing in Tehran Stock Exchange. The Iranian Accounting and Auditing Review,12 (40): 81-96. (in Persian)
Picur, R. D. & Riahi-Belkaoui, A. (2006). The impact of bureaucracy, corruption and tax compliance. Review of Accounting and Finance, 2(5): 174–180.
Poorheidari, O. & Aflatooni A. (2006). Investigation of Motivation of Income Smoothing in Tehran Security Exchange Listed Companies. The Iranian Accounting and Auditing Review, 13(2): 55-70. (in Persian)
Porcano, T. M. & Price, C. E. (1993). The effects of social stigmatization on tax evasion. Advances in Taxation, 5(5): 197–217.
Porcano, T. M. (1988). Correlates of Tax Evasion. Journal of Economic Psychology, 1(9): 47–67.
Rasooli Shamirani, R. & Asadollahzadeh bali, M.R (2007). Investigation of effective factors on tax compliance of tax unites. Journal of Tax Research, 1(48): 43-61(in Persian)
Riahi-Belkaoui, A. (2004). Relationship between tax compliance internationally and selected determinants of tax morale. Journal of International Accounting, Auditing and Taxation, 2(13): 135–143.
Richardson, G. (2006). Determinants of tax evasion: A cross-country investigation. Journal of International Accounting, Auditing and Taxation, 2(15): 150–169.
Richardson, G. (2008). The relationship between culture and tax evasion across countries: additional evidence and extensions. Journal of International Account, Auditing, Taxation, 17 (2): 67–78.
Tsakumis, G.T., Curatola, A.P. & Porcano, T.M. (2007).The relation between national cultural dimensions and tax evasion. Journal of International Accounting, Auditing and Taxation, 2(16): 131–147.
Vitell, S. J., Nwachukwu, S. L. & Barnes, J. H. (1993). The effects of culture on ethical decision making: An application of Hofstede’s typology. Journal of Business Ethics, 12(10): 753–760.
World Economic Forum. (1996). Global Competitiveness Report 1996. New York: Oxford University Press.
Zanganeh, E. (2010). Social interaction on the level of taxpayer compliance (Case Study: Isfahan). MA thesis. Isfahan University. (in Persian)