CPC 47, Brazilian Federal Revenue Service Monitoring, and Tax Avoidance among Companies Listed on B3

Objective: To examine the association between the adoption of CPC 47, which modified the recognition, measurement, and disclosure of revenue, and tax avoidance among companies listed on B3. Method: Analysis of data from 471 companies covering the period from 2010 to 2023, using descriptive statistics, tests of differences in means, panel data regression, and regression discontinuity analysis. Results: The implementation of CPC 47 was accompanied by a reduction in companies’ effective tax burden. However, the heterogeneity analysis did not reveal significant differential effects in the sectors potentially most affected by the standard. Furthermore, there was no evidence that the standard’s adoption contributed to reducing tax avoidance among companies subject to monitoring by the Brazilian Federal Revenue Service (RFB). Contributions: This study contributes by showing that the adoption of CPC 47 was accompanied by a lower effective tax burden, without significant differential effects in the most exposed sectors. Furthermore, it indicates that RFB monitoring did not significantly mitigate tax avoidance after the standard’s adoption. The implications of this study provide a basis for evaluating the effectiveness of accounting standards and tax policies in contexts of regulatory flexibility.