INVESTIGACIONES

We use rm-level administrative data from Ecuador to study the implications of `reverse withholding' for rms' tax behavior. Withholding does not aect tax liability of rms, but it may result in a discontinuity in the audit probability around the withholding threshold. Exploiting variation in withholding rates across industries and over time, we nd that rms' prot taxes concentrate near the withholding rate. To explore the link between bunching and evasion, we use data from third party reports on sales and costs. We show that the rms that bunch are more likely to conceal their sales and inate their costs. Finally, we create a prole of the rms that bunch and of their general managers: medium size rms in the coastal region headed by single males are signicantly more likely to bunch and, presumably, to evade taxes.

Paul E. Carrillo, Universidad George Washington

M. Shahe Emran, Columbia University

Ana Rivadeneira, Centro de Estudios Fiscales - SRI [amrivadeneira@sri.gob.ec]

Withholding, Reverse Withholding, Firms, Prot Tax, Bunching, Tax Evasion, Ecuador