LEVEL OF TAXATION, FISCAL LITIGATION, AND REPUTATION OF BRAZILIAN PUBLICLY TRADED COMPANIES

Corporate reputation is an important tool to help organizations achieve their goals, as well as the reduction of taxes (tax avoidance). However, an aggressive reduction in taxes can lead to tax disputes, which may or may not negatively affect corporate reputation, thus characterizing controversial strategies. Although the literature offers studies that evaluate the relationship between taxation levels and variables such as governance, crisis, sustainability, among others, there is a scarcity of research linking profit taxation levels and corporate reputation associated with tax litigation processes. This study employs a quantitative approach, with data collected from the Economática® database and the Administrative Tax Appeals Board (CARF) website. Logistic regression analysis is conducted to assess the relationship between the presence of tax litigation, taxation levels, and the reputation of publicly traded companies listed on the B3. The dependent variables include reputation indicators such as the Corporate Sustainability Index (ISE) and the ranking of the Biggest and Best (MM) companies. The results indicate that the presence of tax litigation does not reduce the likelihood of having a strong reputation, whereas a low level of taxation does. The interaction between litigation and low taxation, in turn, does not decrease the probability of a company having a strong reputation. It is concluded that while a low level of taxation negatively affects a company's reputation, the combination with tax litigation processes does not exacerbate this perception. This finding reinforces the idea that stakeholders perceive tax strategies differently depending on the context.