Factors involved in the difference between taxable income declared by business corporations and taxable income assessed by tax authorities: Case of West Tehran Tax Affairs Head Office

The present paper seeks to explore the factors involved in the difference betweenthe taxable income declared by business corporations and the taxable incomeassessed by tax authorities. To this end, data of business corporations’ performance(data of the fiscal years 2005 and 2006 being recorded in their statuary books) weregathered from tax cases filed with West Tehran Tax Affairs Head Office and,through making use of relevant statistical methods and software, were put underinvestigation. The findings obtained indicate that there is a significant differencebetween the declared and assessed taxable incomes. Moreover, the factors involvedin this difference are all, in isolation, significant. In order to show the degree ofimportance of each factor, the proportion of each variable in the overall differencewere calculated and Freidman Test was used.