scholarly journals Host country corporate income tax rate and foreign subsidiary survival

2021 ◽  
Vol 56 (2) ◽  
pp. 101186
Author(s):  
Bassam Farah ◽  
Rida Elias ◽  
Dwarka Chakravarty ◽  
Paul Beamish
Keyword(s):  
Host Country ◽  
Income Tax ◽  
Corporate Income Tax ◽  
Foreign Subsidiary ◽  
Tax Rate ◽  
Subsidiary Survival

Taxation in a mixed economy: the case of China

2017 ◽  
Vol 34 (1) ◽  
pp. 49-61 ◽  
Author(s):  
Davidson Sinclair ◽  
Larry Li
Keyword(s):  
Income Tax ◽  
Central Government ◽  
Corporate Income Tax ◽  
Tax Rates ◽  
Government Ownership ◽  
Effective Tax Rate ◽  
Effective Tax Rates ◽  
Content Type ◽  
Tax Rate ◽  
For Profit

Purpose The purpose of this paper is to investigate how Chinese firms’ ownership structure is related to their effective tax rate. The People’s Republic of China provides an interesting environment to examine the corporate income tax. Government has significant ownership stakes in the for-profit economy and state-owned enterprises (SOEs) are liable to the corporate income tax. This is very different to most other economies where SOE tends to dominate the not-for-profit economy and pays no corporate income tax. Government ownership also varies between the central government and local government in addition to state asset management bureaus. This provides a rich institutional background to examining the corporate income tax. Design/methodology/approach A panel data analysis approach is used to examine relationship between ownership structure and effective tax rates of all public firms in China from 1999 to 2009. Findings The authors report that effective tax rates do appear to vary across the ownership types, but that SOEs pay a statistically higher effective tax rate than to non-state-owned. In addition, local government owned SOE pay higher effective tax rates than central government and SAMB owned SOE. The authors also investigate Zimmerman’s (1983) political cost hypothesis. Unfortunately, these results are econometrically fragile with the statistical significance of those results varying by empirical technique. Originality/value This paper provides insight into government ownership and taxation in China.

scholarly journals Beneficial ownership of income as an antiabusive measure in Serbian Tax Law

2020 ◽  
Vol 59 (88) ◽  
pp. 217-232
Author(s):  
Miloš Vasović
Keyword(s):  
Income Tax ◽  
Corporate Income Tax ◽  
Tax Law ◽  
Tax Rates ◽  
Double Taxation ◽  
Current Function ◽  
Tax Rate ◽  
Treaty Shopping ◽  
Beneficial Ownership ◽  
The One

The Serbian Corporate Income Tax Act contains a provision on the beneficial ownership of income (hereinafter: the BO provision), which is one of the conditions for the application of the preferential tax rate on income tax after tax deduction, which is envisaged in Treaties for the avoidance of Double Taxation on income and capital (hereinafter: Double Taxation Treaties/ DTTs). The subject matter of research in this paper is the term "beneficial ownership", which is not defined in the Corportate Income Tax Act. It may ultimately lead to abusing the preferential tax rates from the DTTs in tax planning and "treaty shopping" through the use of conduit companies. Tax experts have different opinions on the legal nature of the BO provision, which is given the function of an anti-abusive measure (on the one hand) and a rule for the attribution of income (on the other hand). The author analyzes the current function of the BO provision envisaged in the Serbian Serbian Corporate Income Tax Act (CITA), and its inadequate application. The author advocates for enacting the BO provision as an anti-abusive measure, and examines the possible application of the BO provision in domestic tax law, with reference to Articles 10, 11, and 12 of the DTTs that Serbia contracted with other states, as well as Articles 10-12 of the OECD Model-Convention on Income and Capital (2017) and Commentaries on these articles. Such an application of the BO provision may preclude "treaty shopping". In final remarks, the author points out why the BO provision should be envisaged as an anti-abusive measure in Serbian tax law.

scholarly journals Analisis Perhitungan Pajak Penghasilan Badan Pada Perusahaan Jasa Konstruksi

2018 ◽  
Vol 6 (3) ◽  
pp. 205-216
Author(s):  
Jeanne Laura Elizabeth Manuputty ◽  
Sudradjat Sudradjat
Keyword(s):  
Qualitative Research ◽  
Income Tax ◽  
Financial Statement ◽  
Corporate Income Tax ◽  
Tax Rate ◽  
Fixed Assets ◽  
Reporting Mechanism ◽  
And Behavior ◽  
Descriptive Writing ◽  
Construction Services

This research was conducted at PT. Anugerah Abba Prakarsa at Jalan Pangeran Jayakarta 45 No. A5 Jakarta Barat DKI Jakarta. The purpose of this study is to know compliance calculation of corporate income tax on construction services at PT. Anugerah Abba Prakarsa with Peratura Pemerintah no. 51 year 2008 Jo Peraturan Pemerintah no. 40 year 2009 and know how reporting mechanism of annual income tax return of construction service company at PT. Anugerah Abba Prakarsa. This research is a qualitative research with descriptive approach. Research that produces descriptive data in the form of written or oral words of people and behavior that can be observed. In other words, this research is called qualitative research because it is a study that does not hold calculations. The analytical method used is comparative descriptive writing that compares the similarities and differences between two or more facts and properties of the object under study based on a particular frame of mind. The results showed that the analysis and calculation of income tax of PT. Anugerah Abba Prakarsa has been in accordance with Peraturan Pemerintah no. 51 year 2008 JO Peraturan Pemerintah no. 40 years 2009. However, there are some time PT. Abba Prakrsa's prize suffered a constraint which resulted in the increase of the Corporate Income Tax rate to 4% from the Tax Basis.   Keywords : PSAK 16, fixed assets, financial statement

scholarly journals Management Of Accrual Components In Response To Corporate Income Tax Rate Changes: Evidence From Korea

2013 ◽  
Vol 29 (5) ◽  
pp. 1421 ◽  
Author(s):  
Won-Wook Choi ◽  
Hyun-Ah Lee
Keyword(s):  
Financial Reporting ◽  
Income Tax ◽  
Tax Avoidance ◽  
Corporate Income Tax ◽  
Tax Rate ◽  
Taxable Income ◽  
Accruals Management ◽  
Accrual Management ◽  
Aggressive Tax Avoidance ◽  
Statutory Tax Rate

Changes in the statutory corporate income tax rate provide firms with an opportunity to reduce their tax burden by shifting their taxable income from higher to lower tax rate years. One negative consequence of shifting taxable income across years is higher variation in book income for financial reporting purposes. Taxable income and book income are closely related in most countries, and, in general, reporting volatile book income across years is not a favorable signal to investors. This study investigates how firms shift taxable income and concurrently mitigate book income fluctuation by managing accrual components separately when the statutory income tax rate changes. Unlike prior studies, we decompose discretionary accruals into two components and examine distinctive patterns of accrual management in Korea, where book-tax conformity is high and aggressive tax avoidance is restricted. We find that firms manage book-tax accruals for taxable income shifting and manage book-only accruals to mitigate book income fluctuation. Furthermore, we find the extent of book-tax and book-only accruals management varies depending on the firms tax and financial reporting costs. The results of this study provide clear and compelling evidence of firms opportunistic accrual management behavior in response to statutory tax rate reduction.

THE COMPARISON OF CORPORATE INCOME TAX IN LATVIA AND LITHUANIA

2017 ◽  
pp. 20
Author(s):  
Jūlija Ščeglova ◽  
Iveta Mietule
Keyword(s):  
Income Tax ◽  
The State ◽  
Corporate Income Tax ◽  
Tax Rates ◽  
State Budget ◽  
Tax Base ◽  
Tax Rate ◽  
Common Features ◽  
Advance Payment ◽  
Tax Payers

Corporate income tax is one of the important taxes that provide revenues to the state budget. Article contains a comparison between Latvian and Lithuanian existing legislation relating to corporate income tax, studied differences between the tax rates, tax base, tax period and taxpayers. Were described differences that are related to the advance payment calculation, as well as created an example that shows how advance payments are calculated in Latvian and Lithuanian companies. As a result, it was found that there are several common features in the Latvian and Lithuanian legislation, with regard to corporate income tax, for example, the tax payers, taxation period, tax rate, the taxable amount. But there are several differences, such as the nuances of rates for non-residents, depending on the type of revenue, advance payment deadlines and other particularities of the calculation of the advance payments. Also differ corporate income tax payment deadlines. It was concluded that making advance payments in Lithuanian enterprises is more profitable, because it was calculated that at the same conditions, the amount of advances in Lithuania is lower than in Latvia.

scholarly journals Effective Corporate Income Tax Rates: Southern and Northern Economies of the European Union

2020 ◽  
Vol 10 (1) ◽  
pp. 117
Author(s):  
Dimitris Balios ◽  
Nikolaos Eriotis ◽  
Stefanos Tantos ◽  
Dimitrios Vasiliou
Keyword(s):  
European Union ◽  
Income Tax ◽  
Corporate Income Tax ◽  
Tax Rates ◽  
The European Union ◽  
Tax Rate ◽  
Industrial Sectors ◽  
Determining Factors ◽  
Business Profitability ◽  
Alternative Approaches

In the present study, we attempt to investigate the determinants of the effective corporate tax rate of companies of the European Union (EU) discriminating between northern and southern economies. We adopt in our analysis the period after the outbreak of the crisis in the Eurozone up today including some years before 2009 in the assessed period. Our empirical investigation is based on three alternative approaches to effective income tax rate based on accounting information. We investigate the determinants of ECITR assessing two sub-samples of firms from all the aforementioned industrial sectors for 16 member countries of Europe. The first sub-sample consists of firms from 12 member countries of "North" European Union and the second sub-sample consists of firms from 4 member countries of "South" European Union. The analysis covers the period 2004-2016. Estimation results point out that the effective corporate income tax rate is variously affected by firm-specific determining factors for both northern and southern economies. The relation between ECITR and determining factors is ascertained to be less significant (sensitive) during the pre-crisis period in comparison with the respective empirical findings after the outburst of the economic crisis in the European Union. Empirical findings indicate that effective corporate income tax rate is more vulnerable to financial leverage for southern economies in comparison to the northern economies signaling financing structure differences between the two EU-country groups. Finally, there is evidence that there is an indisputable and positive coexistence between business profitability and tax burden.

scholarly journals The Influence of Corporate Income Taxes on Investment Location: Evidence from Corporate Headquarters Relocations

2021 ◽  
Author(s):  
Travis Chow ◽  
Sterling Huang ◽  
Kenneth J. Klassen ◽  
Jeffrey Ng
Keyword(s):  
Income Tax ◽  
Strong Support ◽  
The State ◽  
Economic Consequences ◽  
Corporate Income Tax ◽  
Tax Rates ◽  
Tax Rate ◽  
Percentage Point Increase ◽  
Point Increase ◽  
State Income

This study examines the effects of jurisdictions’ corporate taxes and other policies on firms’ headquarters (HQ) location decisions. Using changes in state corporate income tax rates across time and states as the setting, we find that a one-percentage-point increase in the HQ state corporate income tax rate increases the likelihood of firms relocating their HQ out of the state by 16.8%, and an equivalent decrease in the HQ state rate decreases the likelihood of HQ relocations by 9.1%. Exploiting the unique tax policy features within the state apportionment system lends strong support to the interpretation that taxation drives this effect. Our analyses also demonstrate that state income tax features affect the destination of the HQ move. We contribute to the literature on corporate decision making by showing how state income taxation affects a real corporate decision that has significant economic consequences for the company and the state. This paper was accepted by Brian Bushee, accounting.

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