The impact of labor unions on corporate tax avoidance: evidence from Korea

This study examines the effect of labor unions on corporate tax avoidance activities. Labor union is an important stakeholder in terms of corporate governance; thus, managers may engage in certain accounting choices that reflect union members’ position to improve the relation with labor union. This paper empirically investigates whether managers engage in tax avoidance activities to secure financial resources for workers’ pay when the negotiation power of labor unions is higher. The empirical analysis is based on a sample of firms listed in the Korean stock market from 2001 to 2008. The authors find that companies, where labor unions are organized, have a significantly higher level of tax avoidance activities. Also, the authors attempt to examine the effect of labor unions’ bargaining power on tax avoidance. While the union membership ratio is not significantly related to tax avoidance, labor unions that belong to upper-level labor organizations significantly affect the increasing tax avoidance activity, on average. Moreover, companies that join an aggressive labor organization (‘Minju’ Federation) show a significantly higher level of tax avoidance activity, compared to those joining a moderate labor organization (‘Hanguk’ Federation). Furthermore, the authors show that such an effect of labor unions on tax avoidance is significant for companies, which are not affiliated with large business groups (‘chaebols’). This result suggests that chaebol group management is not under pressure to negotiate with union members due to higher reputation costs. The findings of this paper offer academic and practical implications that capital market participants need to understand labor unions’ effect on management’s accounting choices.

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Women on the board of directors and corporate tax aggressiveness in Australia

Accounting Research Journal ◽

10.1108/arj-09-2014-0079 ◽

2016 ◽

Vol 29 (3) ◽

pp. 313-331 ◽

Cited By ~ 11

Author(s):

Grant Richardson ◽

Grantley Taylor ◽

Roman Lanis

Keyword(s):

Board Of Directors ◽

Selection Bias ◽

Tax Avoidance ◽

Multivariate Regression Analysis ◽

Corporate Tax ◽

Content Type ◽

Tax Aggressiveness ◽

Self Selection ◽

The Board Of Directors ◽

The Impact

Purpose This paper aims to investigate the impact of women on the board of directors on corporate tax avoidance in Australia. Design/methodology/approach The authors use multivariate regression analysis to test the association between the presence of female directors on the board and tax aggressiveness. They also test for self-selection bias in the regression model by using the two-stage Heckman procedure. Findings This paper finds that relative to there being one female board member, high (i.e. greater than one member) female presence on the board of directors reduces the likelihood of tax aggressiveness. The results are robust after controlling for self-selection bias and using several alternative measures of tax aggressiveness. Research limitations/implications This study extends the extant literature on corporate governance and tax aggressiveness. This study is subject to several caveats. First, the sample is restricted to publicly listed Australian firms. Second, this study only examines the issue of women on the board of directors and tax aggressiveness in the context of Australia. Practical implications This research is timely, as there has been increased pressure by government bodies in Australia and globally to develop policies to increase female representation on the board of directors. Originality/value This study is the first to provide empirical evidence concerning the association between the presence of women on the board of directors and tax aggressiveness.

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The impact of ownership structure on corporate tax avoidance with corporate social responsibility as mediating variable

Journal of Financial Crime ◽

10.1108/jfc-07-2021-0152 ◽

2021 ◽

Vol ahead-of-print (ahead-of-print) ◽

Author(s):

Anissa Dakhli

Keyword(s):

Corporate Social Responsibility ◽

Social Responsibility ◽

Tax Avoidance ◽

Institutional Ownership ◽

Corporate Tax ◽

Data Set ◽

Content Type ◽

Corporate Social ◽

The Impact ◽

Practical Implications

Purpose The purpose of this paper is to investigate the direct and indirect relationship between institutional ownership and corporate tax avoidance using corporate social responsibility (CSR) as a mediating variable. Design/methodology/approach This study uses panel data set of 200 French firms listed during the 2007–2018 period. The direct and indirect effects between managerial ownership and tax avoidance were tested by using structural equation model analysis. Findings The results indicate that institutional ownership negatively affects tax avoidance. The greater the proportion of the institutional ownership, the lower the likelihood of tax avoidance usage. From the result of the Sobel test, this study indicated that CSR partially mediates the effect of institutional ownership on corporate tax avoidance. Practical implications The findings have some policy and practical implications that may help regulators in improving the quality of transactions and in achieving more efficient market supervision. They recommend to the government to add regulations and restrictions to the structure of corporate ownership to control corporate tax avoidance in French companies. Originality/value This study extends the existing literature by examining both the direct and indirect effect of institutional ownership on corporate tax avoidance in French companies by including CSR as a mediating variable.

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The impact of corporate tax avoidance on analyst coverage and forecasts

Review of Quantitative Finance and Accounting ◽

10.1007/s11156-019-00795-7 ◽

2019 ◽

Vol 54 (2) ◽

pp. 447-477 ◽

Cited By ~ 1

Author(s):

Guanming He ◽

Helen Mengbing Ren ◽

Richard Taffler

Keyword(s):

Tax Avoidance ◽

Corporate Tax ◽

Analyst Coverage ◽

The Impact

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The impact of corporate governance on corporate tax avoidance—A literature review

Journal of International Accounting Auditing and Taxation ◽

10.1016/j.intaccaudtax.2019.100270 ◽

2019 ◽

Vol 36 ◽

pp. 100270 ◽

Cited By ~ 3

Author(s):

Jost Kovermann ◽

Patrick Velte

Keyword(s):

Corporate Governance ◽

Literature Review ◽

Tax Avoidance ◽

Corporate Tax ◽

The Impact

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Corporate dispersion and tax avoidance

Chinese Management Studies ◽

10.1108/cms-04-2018-0497 ◽

2019 ◽

Vol 13 (3) ◽

pp. 706-732 ◽

Cited By ~ 1

Author(s):

Kun Su ◽

Bin Li ◽

Chen Ma

Keyword(s):

Internal Control ◽

Chief Executive Officers ◽

Tax Avoidance ◽

Chief Executive ◽

Corporate Tax ◽

Content Type ◽

Listed Firms ◽

Corporate Governance Mechanisms ◽

Executive Officers ◽

The Impact

Purpose The purpose of this paper is to investigate the effects of corporate dispersion on tax avoidance from geographical and institutional dispersion perspectives by using evidence from China. Design/methodology/approach Using a panel data of Chinese listed firms during 2003-2015, this paper estimates with correlation analysis and multiple regression analysis. Findings Both geographical and institutional dispersion are negatively associated with the degree of corporate tax avoidance. Furthermore, corporate governance mechanisms and female chief executive officers can mitigate the negative relation between corporate dispersion and tax avoidance. The results also indicate that ineffective internal control is one of the channels through which corporate dispersion reduces tax avoidance. Originality/value This is the first paper about the impact of firm dispersion on the degree of tax avoidance, complementing the research content of diversification and corporate decision-making.

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AKIBAT HUKUM KRIMINALISASI PENGURUS SERIKAT PEKERJA ATAS TINDAK PIDANA PENCEMARAN NAMA BAIK TERHADAP KEDUDUKAN SERIKAT PEKERJA DI DALAM PERUSAHAAN (STUDI PUTUSAN PENGADILAN TINGGI DKI JAKARTA NOMOR: 95/PID/2018/PT.DKI)

Jurnal Hukum Adigama ◽

10.24912/adigama.v2i1.5258 ◽

2019 ◽

Vol 2 (1) ◽

pp. 719

Author(s):

Jefahnia Octaviani ◽

Andari Yurikosari

Keyword(s):

Labor Unions ◽

Research Method ◽

Labor Union ◽

Industrial Relations ◽

Third Party ◽

Legal Research ◽

High Court ◽

Employment Sector ◽

Legal Subjects ◽

The Impact

One of the legal subjects in the employment sector is labor unions. Labor unions are considered as organizations that able to help workers fight for their rights. When there is an industrial relations dispute between employers and workers, labor unions can represent their members in the process of resolutions that includes three steps, which are Bipartite, Tripartite, and Court of Industrial Relations. Based on the applicable laws, in order to carry out their main duties and functions, labor unions must be independent and democratic. Referring to DKI Jakarta High Court Judgement No. 95/Pid/2018/PT.DKI, two of labor union officials in PT Damira are prosecuted by third party outside of Bipartite for criminal acts of defamation, and the prosecution itself build upon their statements on Bipartite. This kind of prosecution can be categorized as a form of criminalization of labor union officials, thus raises issues of how legal protections for labor union officials who are prosecuted by third party and the impact of the criminalization of labor unions officials to the standing of labor unions. The author analyzes both issues comprehensively using the normative legal research method. According to the research, can be councluded that the legal protections of labor union officials is not carried out as stipulated in the applicable laws. Furthermore, criminalization of labor union officials has important impact which includes two things, namely the legal uncertainty of labor union officials regarding their status as workers and the standing of labor unions within the company after the criminalization.

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DO FIRMS FACING INCREASES IN FINANCIAL CONSTRAINTS TEND TO GENERATE CASH THROUGH TAX AVOIDANCE? EMPIRICAL EVIDENCE FROM INDONESIA PUBLICLY LISTED FIRMS

Scientax ◽

10.52869/st.v2i2.62 ◽

2021 ◽

Vol 2 (2) ◽

pp. 232-247

Author(s):

John Erhan Prasetyo Hermawan ◽

Riko Riandoko

Keyword(s):

Firm Value ◽

Financial Constraints ◽

Global Financial Crisis ◽

Tax Avoidance ◽

Corporate Image ◽

Avoidance Behaviour ◽

Regression Result ◽

Corporate Tax ◽

Listed Firms ◽

The Impact

This study examines the effect of increases in financial constraints measured at both firm-specific and macroeconomic level on corporate tax avoidance behaviour. Based on a hand-collected sample of 60 publicly listed firms on Indonesia Stock Exchange (IDX) from the year 2009 to 2016, our regression result shows that firms facing increased firm-specific constraints exhibit lower cash effective tax rates ranging from 0.55 to 9.57 percent which equate to between 0.60 and 10.29 percent of operating cash flows, whereas at macroeconomic constraints do not. The firm-specific constraints result is consistent with our hypothesis and Edwards, et al. (2016), whereas macroeconomic constraints result is inconsistent. Nevertheless, its inconsistency can be caused by several factors, i.e.: (1) the change of corporate tax rate from 28 to 25 percent as fiscal policy after the impact of Global Financial Crisis 2008. It could reduce tax avoidance behaviour; (2) Indonesian Go Public Information Centre stated that the purpose of the firms’ Initial Public Offering (IPO) is not only to finance the firms’ operation due to increases in financial constraints, but also to increase firm value, improve corporate image, grow employee loyalty, maintain business continuity and get tax incentives; (3) the equity financing in Indonesia is more related to equity participation activities conducted among shareholders that’s not listed on the stock or bond markets, e.g. private placement, joint venture, mergers and acquisitions.

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The Impact of Corporate Governance on Corporate Tax Avoidance in Indonesia

10.4108/eai.18-11-2020.2311597 ◽

2021 ◽

Author(s):

Nurma Gupita Dewi ◽

Siti Alliyah

Keyword(s):

Corporate Governance ◽

Tax Avoidance ◽

Corporate Tax ◽

The Impact

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The Effect of Public Share Ownership on Tax Evasion: Study on Companies Listed in Indonesia Stock Exchange Between 2008-2011

International Journal of Financial Research ◽

10.5430/ijfr.v10n6p124 ◽

2019 ◽

Vol 10 (6) ◽

pp. 124

Author(s):

Muhammad Ikbal Abdullah ◽

Andi Chairil Furqan ◽

Ni Made Suwitri Parwati ◽

Asmanurhidayani Asmanurhidayani

Keyword(s):

Tax Evasion ◽

Management Practices ◽

Tax Avoidance ◽

Public Ownership ◽

Corporate Tax ◽

Public Companies ◽

Share Ownership ◽

The Government ◽

The Impact ◽

Public Share

Increasing the concentration of ownership and control of public companies in Indonesia is more likely to increase the likelihood of earnings management practices through tax avoidance. The high percentage of concentrated ownership has encouraged the government and capital market regulators to more broadly promote regulations related to tax incentives and public ownership in order to encourage more transparent practices. This study aims to analyze the policy of public ownership of tax avoidance conducted by Indonesian public companies, specifically after the regulation of Government Regulation No. 81 of 2007 concerning Reduction of Income Tax Rates for Domestic Corporate Taxpayers in the Form of Public Companies, and Minister of Financial Regulation No. 238 / PMK.03 / 2008 concerning Procedures for Implementing and Supervision of Granting Tariff Reductions for Domestic Corporate Taxpayers in the Form of Public Companies. More specifically, this study aims to analyze the impact of public share ownership on tax avoidance by Indonesian public companies. The samples of 320 observations that conducted (firm-years) during 2008-2011. The software that will be used in data analysis is STATA 12. The results showed that the increase in public ownership have a significant effect in improve the practice of corporate tax avoidance, which it is also evidenced by the significant differences in the corporate tax avoidance practices before than after the enactment of these regulations. The findings show that the greater the proportion of public share ownership would result the decreasing number of ETR or ETRC which can be indicated that the greater the practice of corporate tax avoidance. Furthermore, the ROA variable has a negative and significant effect on corporate tax avoidance practices, meaning that the greater the profitability ratio of a company can cause the reported and paid tax burden to decrease.

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