Tax Avoidance by Controlling Shareholders in Distribution of Property of Controlled Corporation under the Current Law on Distribution ―Focused on Comparison with the Internal Revenue Code―

2011 ◽  
Vol 17 (2) ◽  
pp. 83-106
Author(s):  
김의석
Keyword(s):  
Tax Avoidance ◽  
Controlling Shareholders ◽  
Internal Revenue

How Internal Control Protects Shareholders' Welfare: Evidence from Tax Avoidance in China

2020 ◽  
Vol 19 (2) ◽  
pp. 19-39
Author(s):  
Hsihui Chang ◽  
Xin Dai ◽  
Yurun He ◽  
Maolin Wang
Keyword(s):  
Control Systems ◽  
Internal Control ◽  
Agency Costs ◽  
Tax Avoidance ◽  
Positive Association ◽  
Data Availability ◽  
Corporate Tax ◽  
Controlling Shareholders ◽  
The Public ◽  
Prior Literature

ABSTRACT This paper investigates how effective internal control protects shareholders' welfare in the context of corporate tax avoidance. Prior literature documents a positive association between internal control weakness and low tax avoidance. In this paper, we re-examine this association and complement prior research by finding that the direction of the association between internal control and tax avoidance depends on the level of tax avoidance. Specifically, for firms with low (high) levels of tax avoidance, internal control quality is positively (negatively) associated with tax avoidance. In additional analyses, we further explore how internal control mitigates agency costs for state-owned enterprises and tunneling activities. We show that for state-owned enterprises, which have lower incentives to avoid tax, effective internal control prevents managers from paying more taxes to cater to the controlling shareholders' interests. We also find that the association between tax avoidance and tunneling is reduced by effective internal control systems. Data Availability: Data are available from the public sources cited in the text.

scholarly journals Transfer Pricing As A Vehicle In Corporate Tax Avoidance

2016 ◽  
Vol 33 (1) ◽  
pp. 9-16 ◽  
Author(s):  
Joel Barker ◽  
Kwadwo Asare ◽  
Sharon Brickman
Keyword(s):  
Transfer Pricing ◽  
Tax Avoidance ◽  
Tax Rates ◽  
Corporate Tax ◽  
Internal Revenue ◽  
Tax Reduction ◽  
Arm’S Length Principle ◽  
Corporate Tax Rates ◽  
Foreign Affiliates ◽  
Regulatory Bodies

Using transfer pricing, U.S. Corporations are able to transfer revenues to foreign affiliates with a lower corporate tax rates.  The Internal Revenue Code requires intercompany transactions to comply with the “Arm’s Length Principle” in order to prevent tax avoidance.   We describe and use elaborate examples to explain how US companies exploit flexibility in the tax code to employ transfer pricing and related tax reduction and avoidance methods. We discuss recent responses by regulatory bodies.

Do Investors Use Prior Tax Avoidance when Pricing Tax Loss Carryforwards?

2016 ◽  
Vol 38 (2) ◽  
pp. 27-49 ◽  
Author(s):  
Sean T. McGuire ◽  
Stevanie S. Neuman ◽  
Adam J. Olson ◽  
Thomas C. Omer
Keyword(s):  
Avoidance Behavior ◽  
Tax Avoidance ◽  
Tax Planning ◽  
High Variability ◽  
Data Availability ◽  
Taxable Income ◽  
Internal Revenue ◽  
Valuation Allowance ◽  
Tax Loss ◽  
Jel Classifications

ABSTRACT The Internal Revenue Code allows firms to carry excess tax losses forward to offset future taxable income and reduce taxes. Consistent with tax loss carryforwards (TLCFs) creating a significant asset, prior research finds that investors positively value TLCFs. However, investors face significant uncertainty about whether firms will have sufficient future taxable income to benefit from TLCFs. We hypothesize that investors' valuation of new TLCFs will vary with firms' prior tax avoidance behavior because it signals firms' abilities to generate taxable income to offset TLCFs through tax planning. We confirm that investors assign a positive value to new TLCFs and find that investors' valuation varies with firms' prior tax avoidance behavior. Investors positively value TLCFs when firms exhibit high variability in prior tax avoidance and high levels of prior tax avoidance. Our results are incremental to the effect of changes in the valuation allowance on investors' valuation of new TLCFs. JEL Classifications: M40; M41; M49. Data Availability: Data used in this study are available from public sources identified in the paper.

Instilling Subpart F with Horizontal Equity as Applicable to Individual U.S. Shareholders

2019 ◽  
Vol 18 (1) ◽  
pp. 1-18
Author(s):  
Irwin J. (Jay) Katz
Keyword(s):  
Tax Avoidance ◽  
Horizontal Equity ◽  
Tax Neutrality ◽  
Internal Revenue ◽  
Tax Shelters ◽  
New Type ◽  
Foreign Corporations

ABSTRACT Subpart F of the Internal Revenue Code is a body of anti-abuse provisions designed to prevent U.S. shareholders from avoiding tax on the earnings (Subpart F income) generated by foreign corporations they control. Overall, its provisions lack the tax principle of horizontal equity based on tax neutrality. This article will expose the lack of horizontal equity, as applied to individual (not corporate) U.S. shareholders, by being both over-inclusive and under-inclusive. It is over-inclusive in imposing punitive tax consequences when tax avoidance is unachievable, including the taxation of GILTI, a new type of Subpart F income. It is under-inclusive because tax avoidance is achievable by taking advantage of certain loopholes in Subpart F. Using IRC §469 (that successfully eliminated tax shelters) as a model, this article recommends revisions to relevant Subpart F provisions that will eliminate tax avoidance without punitive tax consequences and also foreclose potential tax avoidance opportunities.

Pengaruh Konvergensi International Financial Reporting Standards (Ifrs) Terhadap Penghindaran Pajak(Tax Avoidance)

2018 ◽  
Vol 26 (2) ◽  
pp. 158-169
Author(s):  
Umi Wahidah ◽  
Sri Ayem
Keyword(s):  
Financial Reporting ◽  
Tax Evasion ◽  
Stock Exchange ◽  
Control Variable ◽  
Tax Avoidance ◽  
Sampling Technique ◽  
International Financial Reporting Standards ◽  
Reporting Standards ◽  
Control Variables ◽  
Financial Reporting Standards

This research aimed to examine the effect of the convergence of International Financial Reporting Standards (IFRS) on tax avoidance on companies listed in Indonesia Stock Exchange. Tax avoidance that used in this research was Cash Efective Tax Rate (CETR). This research is also use the control variable to get other different influence that different such as CSR, size, and earning management (EM. This research used populations sector of transport service companies that listed in Indonesia Stock Exchange. The data of this research taken from secondary data that was from the Indonesia Stock Exchange in the form of Indonesian Capital Market Directory (ICMD) and the annual report of the company 2011-2015. The method of collecting sample was purposive sampling technique, the population that to be sampling in this research was populations that has the criteria of a particular sample. Companies that has the criteria of the research sample as many as 78 companies. The method of analysis used in this research is multiple regression analysis. Based on regression testing shows that the convergence of International Financial Reporting Standards (IFRS) has a positiveand significant impact on tax evasion. This shows that IFRS convergence actually improves tax evasion practices. The control variables of firm size and earnings management also significantly influence the application of IFRS in improving tax avoidance practices, while CSR control variables have no role in convergence IFRS in improving tax evasion practice.

THE IMPACT OF UKRAINE'S EXCISE DUTY POLICY ON THE TRANSFORMATION PROCESSES OF THE TOBACCO MARKET

2020 ◽  
Vol 2020 (10) ◽  
pp. 19-33
Author(s):  
Nadiia NOVYTSKA ◽  
◽  
Inna KHLIEBNIKOVA ◽  
Keyword(s):  
Structural Changes ◽  
Tax Avoidance ◽  
Transformation Process ◽  
State Regulation ◽  
Tobacco Products ◽  
Excise Duty ◽  
Increasing Demand ◽  
High Level ◽  
The Impact ◽  
Transformation Processes

The market of tobacco products in Ukraine is one of the most dynamic and competitive. It develops under the influence of certain factors that cause structural changes, therefore, the aim of the article is to conduct a comprehensive analysis of transformation processes in the market of tobacco and their alternatives in Ukraine and identify the factors that cause them. The high level of tax burden and the proliferation of alternative products with a potentially lower risk to human health, including heating tobacco products and e-cigarettes, are key factors in the market’s transformation process. Their presence leads to an increase in illicit turnover of tobacco products, which accounts for 6.37% of the market, and the gradual replacement of cigarettes with alternative products, which account for 12.95%. The presence on the market of products that are not taxed or taxed at lower rates is one of the reasons for the reduction of excise duty revenues. According to the results of 2019, the planned indicators of revenues were not met by 23.5%. Other reasons for non-fulfillment of excise duty revenues include: declining dynamics of the tobacco products market; reduction in the number of smokers; reorientation of «cheap whites» cigarette flows from Ukraine to neighboring countries; tax avoidance. Prospects for further research are identified, namely the need to develop measures for state regulation and optimization of excise duty taxation of tobacco products and their alternatives, taking into account the risks to public health and increasing demand of illegal products.

Legal Considerations of Tax Evasion and Tax Avoidance

2004 ◽  
Vol 26 (1) ◽  
pp. 41-85 ◽  
Author(s):  
Dániel Deák
Keyword(s):  
Tax Evasion ◽  
Tax Avoidance
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