E-commerce and labour tax avoidance Josep Mª Argilés-Bosch a,⇑ , Diego Ravenda b , Josep Garcia-Blandón c a Department of Business, Universitat de Barcelona, Spain b Department of Management Control, Accounting and Auditing, TBS Business School, Campus Barcelona, Spain c Departament of Economics and Finance, IQS School of Management, Universitat Ramón Llull, Spain article info Article history: Received 22 April 2019 Revised 24 April 2020 Accepted 27 April 2020 Available online xxxx Keywords: E-commerce Social security contributions Labour tax avoidance Tax avoidance abstract This study evidences one of the adverse effects of e-commerce on labour tax avoidance, and more precisely in the loss of firms’ social security contributions. With a sample of French e- commerce and traditional retail firms, we find that labour tax avoidance is significantly higher in e-commerce than in traditional retail firms. Results are robust to all measures of labour tax avoidance used in this study, to different estimation methods, sample selection criteria and sensitivity analyses. We discuss and conclude on the adverse effects of the digital economy and e-commerce on employees’ welfare and social well- being. Ó 2020 Elsevier Ltd. All rights reserved. 1. Introduction This paper aims to provide empirical evidence of the effects of e-commerce on labour tax avoidance (LTAV), namely the amount of social security contributions (SSC) paid and reported by the firms. Following previous empirical research on tax avoidance (Hanlon and Heitzman, 2010), we consider LTAV very broadly, as a wide spectrum of SSC planning strategies and activities, where legal actions are at one end, whereas evasion or illegal activities are at the other end. Hence, we include in LTAV both legal and illegal practises, given that the legality of a transaction cannot be ascertained with the data of this study. According to the OECD/G20 (2015, p. 52), e-commerce is the sale of goods or services conducted over computer networks. It can be used either to facilitate the ordering of goods or services that are then delivered through conventional channels, or to order and deliver goods and services completely electronically. We use e-commerce as a representative business sector of the digital or platform economy (e.g. Brynjolfsson, Hu, & Smith, 2003; Lee, 2001). There are two important features which have the potential to fundamentally disrupt the work as it has been performed in Western countries until recent times, namely globalisation and digital economy. Globalisation encourages mobility of goods, services, labour and capital, with corporations searching profits and favourable conditions across different countries in the world. Sikka (2008) argues that with the globalisation nations compete trying to satisfy corporations’ demands for lower costs and social obligations, in order to attract business. Globalisation has also corrosively impacted on national institutions and regulations of employment and industrial relations (Marginson, 2016). Specifically, it has made labour markets more flexible and employment more precarious in Western advanced countries and post-transition economies (Lissowska, 2017). In addition, it has fostered anti-social tax practises and human rights abuses in developing countries (Otusanya, 2011; Lauwo & Otusanya, 2014). https://doi.org/10.1016/j.cpa.2020.102202 1045-2354/Ó 2020 Elsevier Ltd. All rights reserved. ⇑ Corresponding author. E-mail addresses: josep.argiles@ub.edu (J.M. Argilés-Bosch), josep.garcia@iqs.edu (J. Garcia-Blandón). Critical Perspectives on Accounting xxx (xxxx) xxx Contents lists available at ScienceDirect Critical Perspectives on Accounting journal homepage: www.elsevier.com/locate/cpa Please cite this article as: J. M. Argilés-Bosch, D. Ravenda and J. Garcia-Blandón, E-commerce and labour tax avoidance, Critical Perspec- tives on Accounting, https://doi.org/10.1016/j.cpa.2020.102202