Corporate Governance and Corporate Tax Avoidance: an Interactive Effects (Evidence from Indonesia Capital Market)

ABSTRACT In this study, we develop a measure of corporate tax avoidance that reduces both financial and taxable income, which we refer to as “book-tax conforming” tax avoidance. We use simulation analyses, LIFO/FIFO inventory method conversions, and samples of private and public firms to validate our measure. We then investigate the prevalence of conforming tax avoidance within a sample of public firms. Results from the validation tests indicate that our measure of conforming tax avoidance successfully captures book-tax conforming transactions. Consistent with expectations, we also find that the extent to which public firms engage in conforming tax avoidance varies systematically with the capital market pressures. Our study develops a new measure of conforming tax avoidance that should be useful in future research and provides new insights on the extent to which public firms are willing to reduce income tax liabilities at the expense of reporting lower financial income.

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Developing sustainable tax strategies in the post-BEPS era.

Revista de la Facultad de Derecho de México ◽

10.22201/fder.24488933e.2019.275-1.71440 ◽

2019 ◽

Vol 69 (275-1) ◽

pp. 63

Author(s):

Juan Esteban Sanín Gómez

Keyword(s):

Corporate Governance ◽

Tax Avoidance ◽

Close Relation ◽

Tax Planning ◽

Duty Of Care ◽

Corporate Tax

<p>As never before, the concepts of tax planning, corporate governance and sustainability are having a close relation. Despite the fact that governments have tackled tax avoidance schemes, the director´s duty of care still obliges them to seek the best tax optimization for the Company they manage. In that sense, developing sustainable tax strategies that comply with transparent post-BEPS policies should could be considered as a standard of good corporate tax governance in today’s entrepreneurial world.</p><div> </div>

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

Summer - GATR Journal of Finance and Banking Review ◽

10.35609/jfbr.2017.2.4(4) ◽

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.

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Demographic characteristics of the board of directors’ structure and tax avoidance

International Journal of Social Economics ◽

10.1108/ijse-11-2017-0507 ◽

2019 ◽

Vol 46 (2) ◽

pp. 199-212 ◽

Cited By ~ 4

Author(s):

Mohammadreza Hoseini ◽

Mehdi Safari Gerayli ◽

Hasan Valiyan

Keyword(s):

Board Of Directors ◽

Capital Market ◽

Stock Exchange ◽

Tax Avoidance ◽

Demographic Characteristics ◽

Corporate Tax ◽

Content Type ◽

The Board Of Directors ◽

Female Presence ◽

Different Characteristics

PurposeThe structure of corporate governance, as one of the important elements to be considered based on the different characteristics than other companies, such as women, expertise, tenure and management is different. But two measures for the presence of women in the board of directors and the size of director’s board are considered as corporate content characteristics that can affect corporate tax strategies in avoiding tax or taxes timely pay off. The purpose of this paper is to understand the demographic characteristics of the board of directors structure on the board and tax avoidance in Tehran Stock Exchange (TSE).Design/methodology/approachSample includes the 505 firm-year observations from companies listed on the TSE during the years 2012–2016 and research hypothesis was tested using multivariate regression model based on panel data.FindingsThe results indicate that female presence on the board of directors reduces the corporate tax avoidance. Additionally, firms with a larger size of board of directors are associated with more tax avoidance.Originality/valueThe current study is almost the first study which has been conducted in Iran, so the findings of the study not only extend the extant theoretical literature concerning the tax avoidance in developing countries including emerging capital market of Iran, but also help investors, capital market regulators and accounting standard setters to make informed decisions.

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Tax Avoidance, Tax Risk, and Corporate Governance: Evidence from Korea

Sustainability ◽

10.3390/su14010469 ◽

2022 ◽

Vol 14 (1) ◽

pp. 469

Author(s):

Jihwan Choi ◽

Hyungju Park

Keyword(s):

Corporate Governance ◽

Tax Evasion ◽

Stock Price ◽

Tax Avoidance ◽

Governance Structure ◽

Corporate Tax ◽

Corporate Governance Structure ◽

Tax Rate ◽

The Impact ◽

Avoidance Level

This study examines the association between the effective corporate tax rate and the volatility of future effective corporate tax rates in Korean companies. We analyzed the effect of corporate governance on the association between tax avoidance and tax risk. Our sample is comprised of all the firms listed on the Korea Composite Stock Price Index market. We measure each firm’s tax avoidance as GAAP ETR, Cash ETR, and BTD, and use the corporate governance rating of the Korea Corporate Governance Service to measure corporate governance. Our results show that the volatility of the effective corporate tax rate and the effective corporate tax rate would have a significant negative association. Our results show that tax risk decreases when the corporate tax avoidance level increases and the tax risk increases when the corporate tax avoidance level decreases. In addition, we find that the better the corporate governance structure, the higher the level of supervision and control of managers, thereby mitigating the impact of tax evasion on future corporate tax risk. The findings of this study regarding tax avoidance and corporate governance are important for investors because tax risk can significantly affect investor welfare.

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Analisis Good Corporate Governance Dan Ukuran Perusahaan Terhadap Tax Avoidance Pada Pt Bank Riau Kepri

JURNAL PUNDI ◽

10.31575/jp.v2i3.107 ◽

2019 ◽

Vol 3 (1) ◽

Author(s):

Viola Syukrina E Janrosl

Keyword(s):

Corporate Governance ◽

Sampling Method ◽

Sample Selection ◽

Tax Avoidance ◽

Secondary Data ◽

Company Size ◽

Test Results ◽

Corporate Tax ◽

Purposive Sampling ◽

Good Corporate Governance

ABSTRACT This study aims to examine and provide empirical evidence of the influence between GCG and company size on tax avoidance at Bank Riau Kepri. This type of research is classified as causative research. The population in this study is Bank Riau Kepri in 2015-2017. The sample selection with purposive sampling method. The data used in this study is secondary data obtained from www.idx.co.id. Data collection techniques with documentation techniques. The research data was analyzed by multiple regression analysis with SPSS 22. The test results showed that Good corporate governance had a significant effect on tax avoidance. Can be seen the value of GCG which has a significant value of 0.000> 0.05. Company size has a significant effect on tax avoidance. Can be seen significant value 0.00 <0.05. Simultaneously Good corporate governance and company size together have a significant effect on tax avoidance. It can be seen that there is a significant value of 0.000 <0.05. For further research should add other variables that affect corporate tax avoidance including ownership structure and audit committee.Keyword: GCG; Company Size; Tax Avoidance.ABSTRAKPenelitian ini bertujuan untuk menguji dan memberikan bukti empiris pengaruh antara GCG dan ukuran perusahaan terhadap tax avoidance pada Bank Riau Kepri. Jenis penelitian ini digolongkan pada penelitian yang bersifat kausatif. Populasi dalam penelitian ini adalah Bank Riau Kepri. Pemilihan sampel dengan metode purposive sampling. Sampel dalam penelitian ini adalah laporan keuangan Bank Riau Kepri yang diolah bulanan dari tahun 2015-2017. Data yang digunakan dalam penelitian ini berupa data sekunder yang diperoleh dari www.idx.co.id. Teknik pengumpulan data dengan teknik dokumentasi. Data penelitian dianalisa dengan analisis regresi berganda dengan SPSS 22. Hasil pengujian menunjukkan bahwa Good corporate governance berpengaruh signifikan terhadap tax avoidance. Dapat dilihat nilai GCG yang mempunyai nilai signifikan 0.000 > 0,05. Ukuran Perusahaan berpengaruh signifikan terhadap tax avoidance. Dapat dilihat nilai signifikan 0.00 < 0,05. Secara simultan Good corporate governance dan ukuran perusahaan secara bersama-sama berpengaruh signifikan terhadap tax avoidance. Dapat dilihat diperoleh nilai signifikan 0,000 < 0,05. Bagi penelitian selanjutnya hendaknya menambah variabel lain yang mempengaruhi tax avoidance perusahaan diantaranya struktur kepemilikan dan komite audit.Kata Kunci : GCG; Ukuran Perusahaan; Tax Avoidance

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