ACCOUNTING AND TAX EARNINGS MANAGEMENT THROUGH INTEREST ON CAPITAL IN COMPANIES LISTED ON SAO PAULO STOCK EXCHANGE

This study aims to analyse the relationship between remuneration through interest on equity and the variability of book income and variability of taxable income. The companies analyzed represent 28.8% of pay interest on equity in the period between 2006 and 2011. For validation and interpretation of data, were performed descriptive analyzes, correlation analysis and multiple linear regression for longitudinal data (panel data) through Generalized Estimating Equation. In general, it was found that companies do not use this interest to reduce the variability of results (by increasing or reducing tax expenditures, which may vary depending on the level of interest on capital paid). The exception occurred for companies in the Corporate Governance Level 1, to which the data indicate the use of interest on equity for the practice of smoothing. Regarding the management of taxable income, in general, there is evidence that this metric influence the decision to compensation through interest on capital, an indication that the reduction in the tax expenditure in this case is what matters in deciding the means of remuneration.