Corporate management affects taxable profit through capital structure and tax shields. The reason for these manipulations is primarily to minimize corporate taxes and maximize the corporate market value and shareholder value of both listed and unlisted companies. The study explores the relationship between the tax shield and the capital structure and the influence of earnings management on it. Secondly, it evaluates which of the known models of capital structure best suits the conditions of the analyzed countries concerning tax and non-tax profit optimization. These effects were examined on panel data of more than 5,000 non-financial Slovak and Czech companies from 2014 - 2017. Three variants of the leverage ratio (total short-term and long-term) were used as proxies for the capital structure. Tax shields were examined at the level of the effective tax rate, profit manipulation at the level of discretionary accruals by checking firm-level factors and country-level factors (GDP and inflation). The negative dependence of profitability and leverage indicated that companies follow the conclusions of the Pecking order theory modified for emerging economies. Slovak and Czech profitable companies use tax interest and non-interest benefits only to a small extent since it is being replaced by non-tax profit manipulation (earnings management). Instead, indebted businesses tend to increase accounting profits to obtain cheaper long-term debt. Moreover, accounting manipulations have a negative impact on short-term debt as a high degree of indebtedness enhances debt holders' demands for quality accounting profit. The authors proved that conclusions could be improve theoretical knowledge of the capital structure in Czech and Slovak companies. Besides, developed approach could be useful in the decisionmaking of all stakeholders (managers, equity holders, and debt holders/creditors).