Effects of supervision on tax compliance: Evidence from a field experiment in Austria

We conduct a field experiment on tax compliance, focusing on newly founded firms. As a novelty the effect of tax authorities’ supervision on timely tax payments is examined. Interestingly, results show no positive overall effect of close supervision on tax compliance.
Highlights • We study the impact of supervision on tax compliance with a field experiment. • We manipulate supervision through friendly deterrence. • Results suggest that supervision leads to delayed tax payments. • It is concluded that supervision causes a crowding out of intrinsic tax compliance.