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NTU Management Review Vol. 35 No. 1 Apr. 2025

6. Conclusions

The implementation of the Economic Substance Act has influenced corporate tax
avoidance behaviors. Use of tax haven subsidiaries within offshore investment structures

has declined while corporate ETRs have increased. These findings underscore the
effectiveness of international regulatory measures in enhancing tax transparency and
tax equity. Furthermore, the results highlight a crucial shift for companies operating in
a changing global tax environment. With diminishing tax incentives in traditional tax

havens, firms may realign their core income-generating activities with jurisdictions where
substantive economic value is created.

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