تاثیر برآورد نرخ بهره سود سهام بر اجتناب مالیات شرکت: مورد ارزش سهامداران
Abstract
1- Introduction
2- Theory and hypothesis development
3- Research design
4- Results
5- Conclusion
References
Abstract
The objective of this paper is to evaluate whether dividend imputation, whereby tax credits may be passed on to shareholders for corporate tax paid, impacts corporate tax avoidance. This is undertaken with a pooled cross-sectional research design evaluating differences in tax avoidance across firms where there are significant differences in corporate tax avoidance incentives. Specifically, potential differences arise between firms paying dividends with tax credits, paying dividends without tax credits, and not paying dividends. Results suggest that firms paying dividends with tax credits attached are less likely to engage in tax avoidance with an average cash effective tax rate up to 16.9 percentage points higher than firms that pay dividends without tax credits, and up to 14.7 percentage points higher than firms that do not pay dividends at all. Accordingly, this provides insights into the effectiveness of dividend imputation in mitigating corporate tax avoidance, as well as providing support for the continuance of dividend imputation in Australia. Additionally, a positive association is found to exist between outside directors and corporate tax avoidance, extending to firms paying dividends with tax credits where dividend imputation is expected to mitigate such a relation. In combination, these results suggest heterogeneity of costs and benefits of tax avoidance and this is a challenge in evaluating corporate tax aggressiveness generally, and the impact of corporate governance on corporate tax avoidance in particular.
Introduction
The literature suggests that dividend imputation may be associated with lower levels of tax avoidance. However, there are numerous limitations in these studies. Amiran, Bauer and Frank (2016) rely on a cross country design, and both Wilkinson, Cahan and Jones (2001) and Ikin and Tran (2013) use limited samples which are unlikely to be representative of the overall population. Further, all three papers lack a theoretical foundation linking tax avoidance and dividend imputation, and provide no evidence of economic significance. Amiran et al. (2016) in particular, and with little justification, implicitly assume that under dividend imputation, managers in all firms will not engage in tax avoidance, as it is ineffective in increasing shareholders‘ wealth (Lasfer, 1996; Amiran et al., 2016). As a consequence, they ignore differences from the impact of dividend imputation across firms, and in particular, firms not paying dividends, as the effects of tax-induced dividend clienteles and the constraints on the impact of imputation are not considered. The objective of this paper is to evaluate corporate tax avoidance separately across firms paying dividends with tax credits, dividends without tax credits, and not paying dividends, where significant differences in the impact of dividend imputation on the incentives for corporate tax avoidance exist. 1 Additionally, this study evaluates the tax avoidance strategies available in an imputation setting that are in the best interests of shareholders, by controlling for outside director monitoring.