scholarly journals The Governance of Tax Audit Enforcement: Indicators on Automation Incentive, Tax Avoidance and Firm Characteristics

2019 ◽  
Author(s):  
Fairus Halizam A. Hamzah ◽  
Nadiah Abd Hamid ◽  
Siti Noor Hayati Mohd Zawawi ◽  
Salmah Jaafar ◽  
Norazah Md Azali
Keyword(s):  
Industrial Revolution ◽  
Tax Avoidance ◽  
Binary Logistic Regression ◽  
Fine Tuning ◽  
Firm Characteristics ◽  
Effective Tax Rate ◽  
Tax Rate ◽  
Audit Data ◽  
Tax Audit ◽  
Loss Firms

The intense development in the Fourth Industrial Revolution (IR 4.0) demands tight governance of tax audit enforcement by the Inland Revenue Board Malaysia (IRBM) on firms claiming automation incentive. Through tax audit enforcement, IRBM provides a monitoring mechanism for corporate governance. However, due to data confidentiality, little has been established on what indicators that caused tax authority to carry out tax audits. In this research, we employed tax return and historical audit data of corporate taxpayers consisting of profitable and loss firms which consistently claim the Reinvestment Allowance (RA) to examine the indicators applied by the tax authority in executing the role of governance. Employing Binary logistic regression, firm characteristic of firms experiencing tax audit was observable, but tax avoidance and incentive utilization indicators were not apparent. Tax avoidance indicators such as effective tax rate and book-tax difference, loss firms, and incentive utilization receive less attention when it comes to tax audit enforcement. Examining firms that experienced tax audit enforcement has enriched our understanding of indicators that draw the interest of tax authorities when it comes to tax audits. Overall, this research could be the first in Malaysia that has used actual historical tax audit record, which has revealed new evidence on the indicators preferred by the IRBM in conducting a tax audit. The slight fine-tuning of the responses, especially on tax avoidance and incentive utilization indicators for tax enforcement might produce comprehensive tax audit coverage and yield a greater mechanism for governance.

A Study of Perceived Ethicality of Low Corporate Effective Tax Rates

2017 ◽  
Vol 32 (1) ◽  
pp. 87-104 ◽  
Author(s):  
F. Todd DeZoort ◽  
Troy J. Pollard ◽  
Edward J. Schnee
Keyword(s):  
Mediation Analysis ◽  
General Public ◽  
Tax Avoidance ◽  
Tax Rates ◽  
Perceived Fairness ◽  
Effective Tax Rate ◽  
Effective Tax Rates ◽  
Tax Rate ◽  
Policy Practice ◽  
Participant Group

SYNOPSIS U.S. corporations have the ability to avoid paying domestic taxes to achieve an effective tax rate that is much lower than the statutory federal tax rate. This study evaluates the extent that individuals differ in their attitudes about the ethicality of corporations avoiding domestic taxes to achieve low effective tax rates. We also examine the extent to which the specific tax avoidance method used by corporations to access a low effective tax rate affects perceived ethicality. Eighty-two members of the general public and 112 accountants participated in an experiment with two participant groups and three tax avoidance methods manipulated randomly between subjects. The results indicate a significant interaction between participant group and tax avoidance method, with the general public considering shifting profits out of the country to achieve a low effective tax rate to be highly unethical, while the accountants find tax avoidance from carrying forward prior operating losses to be highly ethical. Further, mediation analysis indicates that perceived fairness and legality mediate the effects of participant type on perceived ethicality. Mediation analysis also reveals that sense of fairness and legality mediate the link between tax avoidance method and perceived ethicality. We conclude by considering the study's policy, practice, and research implications.

The Potential of Tax Surprises to Affect Measures of Tax Avoidance and Researchers' Inferences

2018 ◽  
Vol 41 (1) ◽  
pp. 1-30 ◽  
Author(s):  
Chelsea Rae Austin
Keyword(s):  
Stock Options ◽  
Tax Avoidance ◽  
Type I ◽  
Type Ii ◽  
Effective Tax Rate ◽  
Tax Rate ◽  
Tax Savings ◽  
Type Ii Errors

ABSTRACT While not explicitly stated, many tax avoidance studies seek to investigate tax avoidance that is the result of firms' deliberate actions. However, measures of firms' tax avoidance can also be affected by factors outside the firms' control—tax surprises. This study examines potential complications caused by tax surprises when measuring tax avoidance by focusing on one specific type of surprise tax savings—the unanticipated tax benefit from employees' exercise of stock options. Because the cash effective tax rate (ETR) includes the benefits of this tax surprise, the cash ETR mismeasures firms' deliberate tax avoidance. The analyses conducted show this mismeasurement is material and can lead to both Type I and Type II errors in studies of deliberate tax avoidance. Suggestions to aid researchers in mitigating these concerns are also provided.

scholarly journals PENGARUH KONSERVATISME AKUNTANSI DAN PENGHINDARAN PAJAK TERHADAP NILAI PERUSAHAAN

2019 ◽  
Vol 2 (2) ◽  
pp. 134
Author(s):  
Puradinda Zulfiara ◽  
Juli Ismanto
Keyword(s):  
Firm Value ◽  
Stock Exchange ◽  
Tax Avoidance ◽  
Secondary Data ◽  
Accounting Conservatism ◽  
Annual Reports ◽  
Manufacturing Companies ◽  
Effective Tax Rate ◽  
Tax Rate ◽  
Positive Effect

Aim of this research is to determine the effect of accounting conservatism and tax avoidance on firm value. The type of data used in this study is secondary data in the form of annual reports of manufacturing companies listed on the Indonesia Stock Exchange (IDX) for the 2013-2016 period. The number of samples is 48 manufacturing companies. The data analysis technique used is regression analysis. The results of the study show that conservatism has a positive effect on firm value, tax avoidance has a negative effect on firm value. While simultaneously conservatism and tax avoidance have a positive effect on firm value. Thus this study supports that accounting conservatism has a role as a function of monitoring the company's investment policies and one way to maintain the value of the company in limiting losses that may arise from poorly performing investment decisions. The company that conducts tax avoidance (has a smaller effective tax rate) is an effort made by management to reduce the company's tax burden and is able to minimize expenditure for tax purposes so that management looks good in the eyes of shareholders.

scholarly journals ESTADO DA ARTE DA PESQUISA EM AGRESSIVIDADE FISCAL

2018 ◽  
Vol 1 (1) ◽  
pp. 42
Author(s):  
Rodolfo Fabriz Marchesi ◽  
Eduardo José Zanoteli
Keyword(s):  
Tax Avoidance ◽  
Effective Tax Rate ◽  
Tax Rate

A temática sobre tributos é considerada interdisciplinar e vem sendo estudada com muito mais intensidade nos anos recentes. No âmbito da pesquisa em contabilidade, a medida de agressividade fiscal Effective-Tax-Rate (ETR) é considerada como uma das principais bases da pesquisa no campo, e é analisada no presente estudo. O objetivo deste trabalho é fazer uma revisão bibliográfica que teve por objetivo verificar o estado da arte da pesquisa sobre Agressividade Fiscal (Tax Agressiveness) em periódicos nacionais e internacionais, no período de 2013 a 2017, devido ao fato desse linha de tempo possuir artigos de maior relevância. A metodologia empregada foi o cálculo aritmético da média das citações e do Índice H de cada periódico, como forma de averiguar os artigos com maior relevância. Foi realizada uma Análise Fatorial por Correspondência (AFC) com o software Iramuteq no intuito de mostrar quais palavras foram mais utilizadas nos artigos apurados, destacando-se tax, empirical e investors como as palavras mais utilizadas na literatura do tax avoidance. O estudo bibliométrico revelou 72 artigos internacionais e 8 artigos nacionais, sendo que no cenário nacional não se encontram trabalhos relevantes devido à falta de citações na plataforma Spell. Quanto aos papers internacionais, encontrou-se uma predominância do periódico Accounting Review, com cerca de 32,5% das citações na pesquisa sobre agressividade fiscal. Quanto à metodologia, a mais frequente utilizada foi o Método por Mínimos Quadrados Ordinários, de maneira global. Considerando isso, o presente artigo contribui de forma catalisadora para a pesquisa em agressividade fiscal e tributos nacional.

scholarly journals The Use of International Tax Planning in Subsidiaries from the Financial and ICT Sectors in the Czech Republic

2021 ◽  
Vol 24 (1) ◽  
pp. 182-196
Author(s):  
Vít Jedlička
Keyword(s):  
Global Economy ◽  
Transfer Pricing ◽  
Tax Avoidance ◽  
Tax Planning ◽  
Tax Burden ◽  
Effective Tax Rate ◽  
Tax Havens ◽  
Tax Rate ◽  
Dummy Variable ◽  
International Tax

Tax avoidance is an important element of management in the global economy. Managers use tax havens for reducing a company’s effective tax rate. The most common practices in international tax planning can be divided into three groups: loans and their related interest, royalties, and transfer pricing. The aim of this article is to find the determinants of the tax burden faced by foreign-owned subsidiaries. Therefore, a model was created for the tax burden, focusing on the special position of subsidiaries within international tax planning. For this purpose, taxes/outcomes was established as a new dependent variable. The panel data used include Czech companies that are owned by parent companies located in other EU countries. The model distinguishes EU tax havens from regular member states; sector dummy variables are also included. The regression model that was created did not confirm the assumed dependencies. Rather, it indicated other important determinants: profitability, the share of intangible assets, size, and the dummy variable for the ICT sector. Based on the regression results, the independent variables connected with known tax planning schemes have relatively low importance. The significance of these results can be seen in the subsequent conclusions. First of all, there is no difference between the subsidiaries’ tax burdens based on the parent company’s location. Corporations use international tax planning whether or not they are owned from a tax haven. The second significant conclusion indicates the importance of certain sectors and their attributes concerning the tax burden. Companies from the ICT sector are linked to a lower tax burden. On the other hand, the dependencies within the financial sector are not statistically significant. From the perspective of further research, it would be constructive to incorporate the subsidiary’s position within the group.

scholarly journals PENGARUH SOLVABILITAS DAN INTELLECTUAL CAPITAL TERHADAP EFFECTIVE TAX RATE MELALUI KUALITAS INFORMASI AKUNTANSI

2018 ◽  
Vol 2 (1) ◽  
Author(s):  
Sihar Tambun
Keyword(s):  
Intellectual Capital ◽  
Accounting Information ◽  
Tax Avoidance ◽  
Least Square ◽  
Effective Tax Rate ◽  
Tax Rate ◽  
Purposive Sampling ◽  
Ordinary Least Square ◽  
Quality Of Accounting Information

Abstrak: Artikel ini memaparkan pengaruh dari solvabilitas dan intellectual capital pada kualitas informasi akuntansi, serta dampaknya terhadap effective tax rate. Solvabilitas dan inntellectual capital sebagai variabel independen dalam penelitian ini. Kualitas informasi akuntansi sebagai varibael mediasi, dan efektive tax rate sebagai variable dependen. Sample dipilih dengan metode purposive sampling, dan menghasilkan 20 emiten dari sektor industri barang konsumsi periode tahun 2013-2017. Metode analisis menggunakan metode estimasi ordinary least square untuk model yang menguji pengaruh langsung. Untuk pengujian pengaruh tidak langsung, menggunakan metode two least square. Hasil penelitian membuktikan bahwa intellectual capital dan solvabilitas mempengaruhi kualitas informasi akuntansi. Kemudian, kualitas informasi akuntansi dan intellectual capital mempengaruhi efketif tax rate. Secara tidak langsung, intellectual capital dan solvabilitas mempengaruhi efektive tax rate melalui kualitas informasi akuntansi.   Kata Kunci: Solvabilitas, Intellectual Capital, Kualitas Informasi Akuntansi, Tax Avoidance, Efektive Tax Rate Abstract: This article describes the effect of solvency and intellectual capital on the quality of accounting information, and its impact on effective tax rate. Solvency and intellectual capital as independent variables in this research. The quality of accounting information as variable mediation, and the effectiveness tax rate as the dependent variable. Sample is chosen by purposive sampling method, and produces 20 emitters from consumer goods industry sector in the period of 2013-2017. The analytical method uses ordinary least square estimation methods for models that test direct effect. For testing indirect effect, using two least square methods. The results prove that intellectual capital and solvency affect the quality of accounting information. Then, the quality of accounting information and intellectual capital affects the effective tax rate. Indirectly, intellectual capital and solvency affect the effectiveness of tax rate through the quality of accounting information.Keywords: Solvency, Intellectual Capital, Quality Accounting Information, Tax Avoidance, Effective Tax Rate

scholarly journals Effect of Corporate Social Responsibility on Tax Avoidance in China

2021 ◽  
Vol 8 (9) ◽  
pp. 72-75
Author(s):  
Tong Chen ◽  
◽  
Maisarah Mohamed Saat ◽  
Keyword(s):  
Corporate Social Responsibility ◽  
Social Responsibility ◽  
Tax Avoidance ◽  
Effective Tax Rate ◽  
Socially Responsible ◽  
Tax Rate ◽  
The Public ◽  
Chinese Listed Companies ◽  
Aggressive Tax Avoidance ◽  
Corporate Social

Corporate social responsibility (CSR) has aroused heated discussion in recent years. The public generally believe that the enterprises with good CSR performance will not be involved in aggressive tax avoidance issues. However, as several famous socially responsible technology companies were found to be involved in aggressive tax avoidance, the association between those two variables has been doubted. This paper analyzes the effect of CSR on tax avoidance with the evidence of Chinese listed companies from 2016 to 2020. The finding is that good CSR performance leads to an increase in effective tax rate. In other words, the higher the CSR report score, the higher tax payment and the lower tendency in tax avoidance.

scholarly journals IMPACT OF A PREVIOUS AUDIT ON TAX AGGRESSIVENESS OF A FIRM TAXPAYER

2019 ◽  
Vol 1 (3) ◽  
pp. 15
Author(s):  
Ivan Rona Penata
Keyword(s):  
Multinomial Logit ◽  
Effective Tax Rate ◽  
Tax Rate ◽  
Tax Aggressiveness ◽  
Logit Regression ◽  
Multinomial Logit Regression ◽  
Audit Result ◽  
Tax Audit ◽  
Return Data

This study aims to analyze the effect of a previous tax audit on tax aggressiveness of a firm taxpayer who submits Overpayment Annual Tax Return. The degree of tax aggressiveness itself uses Delta Effective Tax Rate as a proxy, generated from Annual Tax Return data from 2011 to 2016. Using multinomial logit regression as a method, this study found that a previous Tax Audit and tax audit result made a firm prefer to choose a positive Delta Effective Tax Rate.

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 PENGARUH ROA, LEVERAGE, DAN CAPITAL INTENSITY TERHADAP TAX AVOIDANCE PADA PERUSAHAAN PERTAMBANGAN ERA JOKOWI – JK

2021 ◽  
Vol 2 (2) ◽  
pp. 125-138
Author(s):  
Clarissa Octa Gumono
Keyword(s):  
Agency Theory ◽  
Tax Avoidance ◽  
Capital Intensity ◽  
The State ◽  
Annual Reports ◽  
Effective Tax Rate ◽  
Return On Assets ◽  
Mining Sector ◽  
Tax Rate ◽  
Independent Variable

Taxes are income for the state which are useful for financingstate activities and operations. Unfortunately, taxes are not profitable forcompanies. Taxes can decrease its profit. This situation triggers the companyto take action related to agency theory. This actions taken by managingtax financing so that it can be effective and efficient without violatingexisting regulations. That actions called tax avoidance. Tax avoidance takesadvantages of the grey area in the tax regulations so that the actions takenlegally. Tax avoidance in this study is used as the dependent variable bycalculating the cash effective tax rate (cash ETR). Independent variable inthis study are return on assets (ROA), leverage, and capital intensity. Theexistence of these variables are used to support the purpose of this study.The purpose of this study is to determine the influence of ROA, Leverageand Capital intensity on tax avoidance. The data used are from the financialreports and annual reports of mining sector companies listed in IndonesiaStock Exchange during the Jokowi - JK’s era.

Sign in / Sign up

Export Citation Format

Share Document