Project R-14749

Behavioural drivers of tax compliance of owner-managers and accountants of SMEs (Research)

Classic models used to investigate and predict tax compliance decisions, are based on expected utility theory. As self-interested rational agents, taxpayers analyse the cost and benefits of various options and consequently choose the option that maximises their utility. Doing so, they take into account the probability of being audited and the associated penalties. However, empirical findings often contradict predictions of these models. In reality, tax payers don't seem to act like the pure rational Econs the classical models assume them to be. On the contrary, and not surprisingly, tax payers show Human tendencies. They do not disregard feelings and emotions. They adhere to personal and social norms, and they interact with other agents like accountants, fiscal authorities and other tax payers. Most of the compliance research so far focusses on situations of income tax. However, a growing body of literature is recognising that owner-managers of SMEs (as well as the self-employed) are in a distinct tax situation. Research, accounting for behavioural drivers of this group of taxpayers, has gained interest in the last years. We will contribute to this field, focussing on deep-level behavioural aspects and accounting for interactions with agents like accountants, the fiscal authorities and members of their reference group of peers.

01 February 2024 - 31 January 2028