Lobbying and tax avoidance in EU countries

Corporate lobbying in the US has a fundamental role driving tax planning strategies. Tax avoidance schemes are so created to reduce taxable income and permit to maximize revenues for shareholders. By analyzing a public dataset of firms lobbying in the UE, we investigate the correlation between lobbying expenditures and corporate tax avoidance in the European context. The empirical evidence suggests a negative relationship, indicating that firms that allocate greater resources to lobbying efforts in UE tend to experience slightly higher effective tax rates due to the more strict controls.