scholarly journals A practical proposal to end corporate tax abuse: METR, a minimum effective tax rate for multinationals

Global Policy ◽  
2021 ◽  
Author(s):  
Alex Cobham ◽  
Tommaso Faccio ◽  
Javier Garcia‐Bernardo ◽  
Petr Janský ◽  
Jeffery Kadet ◽  
...  
Keyword(s):  
Corporate Tax ◽  
Effective Tax Rate ◽  
Tax Rate ◽  
Practical Proposal

An Investigation of the Firm Size—Effective Tax Rate Relation in the 1980s

1993 ◽  
Vol 8 (2) ◽  
pp. 167-182 ◽  
Author(s):  
Thomas C. Omer ◽  
Karen H. Molloy ◽  
David A. Ziebart
Keyword(s):  
Firm Size ◽  
Tax Burden ◽  
Tax Rates ◽  
Corporate Tax ◽  
Effective Tax Rate ◽  
Effective Tax Rates ◽  
Policy Makers ◽  
Tax Rate ◽  
Sample Composition ◽  
Rate Relation

Given the recent emphasis on effective tax rates by policy makers and accounting researchers, this study investigates the relation between firm size and corporate tax burdens on a yearly and an industry basis. The analysis is conducted using five effective tax measures employed in previous studies in order to determine the degree to which inferences between size and tax burden are robust across these different effective tax measures. The results indicate that the relation is fairly robust across measures and, in instances in which the relation is not upheld by our analysis, sample composition explains differences in the observed relation between firm size and corporate tax burden.

scholarly journals Does Corporate Social Responsibility Influence Corporate Tax Avoidance of Chinese Listed Companies?

2018 ◽  
Vol 10 (12) ◽  
pp. 4549 ◽  
Author(s):  
M.A. Gulzar ◽  
Jacob Cherian ◽  
Muhammad Sial ◽  
Alina Badulescu ◽  
Phung Thu ◽  
...  
Keyword(s):  
Corporate Social Responsibility ◽  
Social Responsibility ◽  
Tax Avoidance ◽  
Listed Companies ◽  
Primary Objective ◽  
Corporate Tax ◽  
Effective Tax Rate ◽  
Tax Rate ◽  
Chinese Listed Companies ◽  
Corporate Social

The primary objective of this paper is to empirically examine whether corporate social responsibility (CSR) influences corporate tax avoidance (CTA) of Chinese listed companies. The study is based on a sample of 3481 firm-year observations from 2009 to 2015 using CSR ratings from the Rankins (RKS) corporate social responsibility ratings agency in China, and all financial data extracted from the China Stock Market and Accounting Research (CSMAR). The authors foundthat CSR is negatively related to the current and cash effective tax rate (proxies of corporate tax avoidance), suggesting that responsible firms are more involved in tax avoidance as compared to less responsible firms. Their findings are robust against different control variables. Additionally, to the best of the authors’ knowledge, the paper is one of the first to document an empirical association between CSR and corporate tax avoidance of Chinese listed companies.

scholarly journals Faktor Penentu Tarif Pajak Efektif Pada Perusahaan Kesehatan: Sebelum dan Saat Covid-19

2021 ◽  
Vol 26 (3) ◽  
pp. 412
Author(s):  
Anindita D. Pinastika, Ferry Irawan
Keyword(s):  
Ownership Structure ◽  
Health Sector ◽  
Tax Rates ◽  
Corporate Tax ◽  
Effective Tax Rate ◽  
Tax Rate ◽  
Tax Management ◽  
State Tax ◽  
Corporate Tax Rates ◽  
The Government

The pandemic of Covid-19 had attacked and contribute to the Indonesia’ economics negatively. State tax revenues could not be achieved given the restrictions on activities that were intensified to prevent the spread of virus. Incentives issued by the government are one of the factors causing the decline in state revenues, one of which is in the form of lowering corporate tax rates. The effective tax rate used in measuring corporate tax management is tested with related-parties transaction, profitability, leverage, and ownership structure variables. The effect of this variable is then compared in 2019 and 2020 to observe whether there is a difference before and during the pandemic. The research was conducted on health sector companiesas a sector that was positively affected by the pandemic. The results of the study show that leverage has an effect on the effective tax rate (ETR) in 2020 while ownership structure has an effect on the ETR in 2019. The effective tax rate of health sector companies, which allegedly decreased due to incentives from the government, has actually increased during the pandemic.

scholarly journals Corporate Tax Preferences: Identification and Accounting Measurement

2013 ◽  
Vol 36 (1) ◽  
pp. 89-103 ◽  
Author(s):  
James J. Musumeci ◽  
Richard C. Sansing
Keyword(s):  
Financial Reporting ◽  
Financial Accounting ◽  
Corporate Tax ◽  
Effective Tax Rate ◽  
Rates Of Return ◽  
Tax Rate ◽  
Tax Preference ◽  
Accounting Measurement ◽  
Long Run ◽  
Preference Measure

ABSTRACT This study evaluates the relation between a firm's long-run cash effective tax rate (ETR) and the extent to which a corporation's projects are tax-favored or tax-disfavored. We first derive a measure of the extent to which a project is tax-favored that is independent of the project's financial accounting treatment. We argue that our measure, which focuses on the present value of the government's tax collections from the project, is superior to the traditional measure that compares the pretax and after-tax internal rates of return of the project. We then use our measure as a benchmark with which to examine the relation between the ETR and tax preferences. We find that the long-run cash ETR is an unreliable tax preference measure, even when the asset is depreciated for financial reporting purposes at the rate at which its productivity declines.

Earnings Management, Corporate Governance and Tax Avoidance: The Case in Indonesia

2017 ◽  
Vol 2 (4) ◽  
pp. 28-35
Author(s):  
Lulus Kurniasih ◽  
Sulardi Sulardi ◽  
Sri Suranta
Keyword(s):  
Corporate Governance ◽  
Earnings Management ◽  
Audit Quality ◽  
Stock Exchange ◽  
Tax Avoidance ◽  
Governance Mechanisms ◽  
Corporate Tax ◽  
Effective Tax Rate ◽  
Tax Rate ◽  
Corporate Governance Mechanisms

Objective - This study aims to determine the effect of earning management and corporate governance mechanisms on corporate tax avoidance. Methodology/Technique - Corporate governance mechanisms use institutional ownership, the size of the board of commissioners, the percentage of independent commissioners, auditing committees, and audit quality as proxies. Meanwhile, earnings management uses the modified Jones model. The sample of this study include non-financial companies that are listed on the Indonesian Stock Exchange (IDX) between 2014 and 2016. Findings - Corporate tax avoidance can be detected by using the effective tax rate (ETR), which is the ratio of income to tax expenses. This sample was chosen using a purposive sampling method, resulting in 871 firms. The results suggest that earnings management has a significant impact on ETR. Novelty - This study identifies that only independent commissioners and audit quality have a significant influence on ETR. Type of Paper - Empirical Keywords: Tax Avoidance; Earnings Management; Corporate Governance; Effective Tax Rate; Audit Quality. JEL Classification: G3, G39, G39.

Corporate Tax Planning and Financial Performance of Companies Listed in Colombo Stock Exchange (CSE)

2020 ◽  
Vol 3 (2) ◽  
pp. 1-15
Author(s):  
Dunusinghe Dharmarathna
Keyword(s):  
Financial Performance ◽  
Stock Exchange ◽  
Listed Companies ◽  
Ordinary Least Squares ◽  
Tax Planning ◽  
Sri Lankan ◽  
Corporate Tax ◽  
Effective Tax Rate ◽  
Return On Assets ◽  
Tax Rate

This study focuses on how best performing listed companies in CSE make strategies in tax planning to reduce tax liabilities without violating rules and regulations imposed by the Tax Authority. In this study, the corporate tax planning was measured by using the Effective Tax Rate (ETR) and the financial performance was measured by using Return on Assets (ROA). The sample of the study was designed based on criteria namely, the largest and most liquid companies in the Sri Lankan equity market and the sample period was restricted for the period 10 years from 2009-2018. The sample represents seventeen (17) companies which are used to calculate the S&P SL 20 index. Data was collected through the published annual reports of CSE of the selected listed companies during the selected financial time period. Co-integration regression along with Panel Dynamic Ordinary Least Squares (DOLS) statistical technique was used to explore this study. Johansen co-integration test confirmed to run the panel DOLS. According to the result of that, corporate tax planning has a negative impact on the financial performance of Sri Lankan best-performing companies listed in CSE however, which is not statistically significant at 5% level. It provides evidence that there is no significant impact from corporate tax planning strategies to the financial performance of listed companies in CSE. This evidence implies that Sri Lankan firms do not utilize the loopholes embedded in the Sri Lankan tax law efficiently. Keywords: Corporate Tax Planning, Colombo Stock Exchange, Co-integration regression, Effective Tax Rate, Financial Performance, Panel Dynamic Ordinary Least Squares, Return on Assets.

The Effect of Corporate Tax Burden on Employment – On Marginal Effective Tax Rate

2016 ◽  
Vol 23 (2) ◽  
pp. 155-173
Author(s):  
Sanghyun Hwang ◽  
◽  
Youn Seol ◽  
Sunhwa Lee
Keyword(s):  
Tax Burden ◽  
Corporate Tax ◽  
Effective Tax Rate ◽  
Tax Rate

scholarly journals Taxing across Borders: Tracking Personal Wealth and Corporate Profits

2014 ◽  
Vol 28 (4) ◽  
pp. 121-148 ◽  
Author(s):  
Gabriel Zucman
Keyword(s):  
Tax Evasion ◽  
Tax Avoidance ◽  
Corporate Tax ◽  
Effective Tax Rate ◽  
Profit Shifting ◽  
Tax Havens ◽  
Tax Rate ◽  
Policy Initiatives ◽  
Tenfold Increase ◽  
Corporate Profits

This article attempts to estimate the magnitude of corporate tax avoidance and personal tax evasion through offshore tax havens. US corporations book 20 percent of their profits in tax havens, a tenfold increase since the 1980; their effective tax rate has declined from 30 to 20 percent over the last 15 years, and about two-thirds of this decline can be attributed to increased international tax avoidance. Globally, 8 percent of the world's personal financial wealth is held offshore, costing more than $200 billion to governments every year. Despite ambitious policy initiatives, profit shifting to tax havens and offshore wealth are rising. I discuss the recent proposals made to address these issues, and I argue that the main objective should be to create a world financial registry.

Long-Run Corporate Tax Avoidance

2008 ◽  
Vol 83 (1) ◽  
pp. 61-82 ◽  
Author(s):  
Scott D. Dyreng ◽  
Michelle Hanlon ◽  
Edward L. Maydew
Keyword(s):  
Tax Avoidance ◽  
Tax Rates ◽  
Corporate Tax ◽  
Effective Tax Rate ◽  
Initial Examination ◽  
Cross Sectional ◽  
Effective Tax Rates ◽  
Sample Mean ◽  
Tax Rate ◽  
Long Run

We develop and describe a new measure of long-run corporate tax avoidance that is based on the ability to pay a low amount of cash taxes per dollar of pre-tax earnings over long time periods. We label this measure the “long-run cash effective tax rate.” We use the long-run cash effective tax rate to examine (1) the extent to which some firms are able to avoid taxes over periods as long as ten years, and (2) how predictive one-year tax rates are for long-run tax avoidance. In our sample of 2,077 firms, we find there is considerable cross-sectional variation in tax avoidance. For example, approximately one-fourth of our sample firms are able to maintain long-run cash effective tax rates below 20 percent, compared to a sample mean tax rate of approximately 30 percent. We also find that annual cash effective tax rates are not very good predictors of long-run cash effective tax rates and, thus, are not accurate proxies for long-run tax avoidance. While there is some evidence of persistence in annual cash effective tax rates, the persistence is asymmetric. Low annual cash effective tax rates are more persistent than are high annual cash effective tax rates. An initial examination of characteristics of firms successful at keeping their cash effective tax rates low over long periods shows that they are well spread across industries but with some clustering.

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