The Influence of Uncertain Tax Positions on Tax Compliance: Considering Taiwan’s Business Income Tax

Abstract

This paper explores the impact of uncertain tax positions on the tax compliance of taxpayers,
penalties for tax agents, and audit quality of tax authorities. The findings are as follows:
When tax positions are uncertain, taxpayers’ intentions to avoid taxes and engaging in
sheltering activities are more obvious, and tax agents assist taxpayers in evading taxes.
However, increasing penalties for tax agents may not intensify tax compliance. Additionally,
uncertain tax positions, poor audit quality, and low integrity of tax officials are the main
reasons of decreased tax compliance. Furthermore, when tax laws are ambiguous, improving
the integrity of tax officials has a significantly positive effect on the audit quality of tax
authorities.