Weiteres Forschungsprojekt
Innovation and Entrepreneurship Research

The Effect of a Tax Training Program on Tax Compliance and Business Outcomes of Starting Entrepreneurs: Evidence from a Field Experiment

This study reports on a randomized field experiment conducted in the Netherlands to estimate the (long-term) effect of a short personalized tax training program on the performance and tax compliance of first-time entrepreneurs. The tax training was expected to have an impact on business performance and different aspects of tax compliance through better financial decision making and more relevant tax knowledge. In this study, we combine survey data, audit data and unique register data from the Netherlands’ Tax and Customs Administration with a randomized experiment and find that the effects of the tax training on business outcomes and tax compliance outcomes are modest. The training program does not have an impact on business survival or turnover. However, we do find that entrepreneurs who received the training have significantly higher profits than entrepreneurs in the control group due to lower reported cost (deductions). This indicates that the treatment affects entrepreneurial behavior, rather than entrepreneurial performance. Furthermore, we find an indirect effect on tax compliance. That is, entrepreneurs who received the training make fewer mistakes in complying with the legal requirements for keeping a business administration than the control group in the first three years after the training.