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

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.

Corporate Tax Avoidance of Malaysian Public Listed Companies: A Multi-Measure Analysis

While the topic of corporate tax avoidance has been experiencing ceaseless attention among researchers, its empirical aspect is still facing the challenge of constructing a single universally accepted measure of such practice. Due to the confidential nature of tax returns, most empirical studies have had to rely on financial statements information to developed proxy measures such as effective tax rates (ETRs) and book-tax differences (BTDs) (Hanlon & Heitzman, 2010). Nevertheless, these proxies possess their individual advantages as well as limitations. Such available choices may therefore cause confusions to the researchers in choosing the most suitable measure for their corporate tax avoidance studies. As the mainstream studies on corporate tax avoidance have focused mostly on developed economies like the United States, United Kingdom, and Australia, there is a scarcity of such studies in developing countries (Salihu et al., 2015). The unique jurisdictional nature of tax laws and enforcement systems hinder the extant findings' applicability on less economically-developed countries, especially those highly dependent on their corporate income tax revenue which is especial true with regard to Malaysia (Mohanadas et al., 2020). Though not as abundant in numbers, extant published studies had found that Malaysian public listed companies were indeed being consistently tax-avoidant since the 1990s. Nevertheless, these studies had respectively employed only a single measure of corporate tax avoidance. Indeed, nearly all had used variations of ETR while only a few had applied BTD measures. Their mutually exclusive application of ETR and BTD measures could negatively impact their findings' ability to capture tax-deferring corporate strategies (Hanlon & Heitzman, 2010; Lennox et al., 2013). It thus worsened the risk of potential distortion in the results of tax avoidance level which would led to flawed conclusions being made. In view of the above, this study seeks to measure corporate tax avoidance level of Malaysian public listed companies for the years 2015 until 2019 using both ETR and BTD measures. Furthermore, this study aims to analyse how closely these two measure are related in their respective appraisals of the companies' tax avoidance level. Keywords: Corporate Tax Avoidance; GAAP ETR; Cash ETR; Total BTD; Permanent BTD.

Performance Aspirations and Corporate Tax Avoidance

The current study examines whether performance discrepancy from the aspiration level affects corporate tax avoidance. Prior studies show that performance discrepancies from the aspiration level significantly affect firms' behavior; thus, it is important to examine whether such discrepancies affect corporate tax avoidance. Based on the behavioral theory of the firm (BTOF), this study posits that firms performing below the aspiration levels avoid more taxes in the subsequent period than other firms. Empirical findings using data from a sample of U.S. firms for the period covering 1993-2016 support the hypothesis. The findings also show that, while there is a difference among firms meeting or beating the aspiration level, there is no statistically significant difference in tax avoidance level among firms performing short of their aspiration level. The study contributes to the existing literature by providing additional evidence extending the scope of literature in BTOF and tax avoidance areas.

Is the Board of Directors’ Religion Related to Tax Avoidance? Empirical Evidence in South Korea

This study investigates the effect of directors’ religious diversity on tax avoidance of firms. The board of directors plays an important role in supervising the management of the corporation. As such, the religious diversity of the board may affect corporate decisions and their implementation by the management. In this regard, this study analyzes the effect of the religious diversity of the directors on the level of tax avoidance. Results are presented as follows. First, the level of tax avoidance tends to be higher when the level of religious diversity among the board members is high. Second, tax avoidance level may be different depending on a CEO’s religion, holding that the religions of board members are diverse. Third, the tax avoidance activity of a corporation is likely to be discouraged if the religions of board members are converged into a single religion. Overall, the results of this study provide an implication that religious factors influence the level of the firm’s tax avoidance.

Analysis of Tax Amnesty Disclosures, Tax Avoidance, and Firm Value

This research tried to investigate the relationship between tax amnesty disclosures, as mandated by Indonesia’s Statement of Financial Accounting Standards (SFAS) No. 70, the level of tax avoidance, and the firm value. This research used 34 samples of public listed companies that participate in 2016 tax amnesty program. Researcher used spearman-rho correlation coefficient and multiple linear regression to analyze the data. This research showed two results. First, there is a moderate negative relationship between tax amnesty disclosure level and tax avoidance level, indicate that necessity for tax amnesty disclosure will be reduced if the company had the lower level of tax avoidance. Second, this research also showed that tax avoidance level and tax amnesty disclosure level had the negative significant effect toward firm value. It is implied that tax amnesty and tax avoidance were two negative actions that reduce the investor trust’s in the company.

Analysis of Tax Amnesty Disclosures, Tax Avoidance, and Firm Value

This research tried to investigate the relationship between tax amnesty disclosures, as mandated by Indonesia’s Statement of Financial Accounting Standards (SFAS) No. 70, the level of tax avoidance, and the firm value. This research used 34 samples of public listed companies that participate in 2016 tax amnesty program. Researcher used spearman-rho correlation coefficient and multiple linear regression to analyze the data. This research showed two results. First, there is a moderate negative relationship between tax amnesty disclosure level and tax avoidance level, indicate that necessity for tax amnesty disclosure will be reduced if the company had the lower level of tax avoidance. Second, this research also showed that tax avoidance level and tax amnesty disclosure level had the negative significant effect toward firm value. It is implied that tax amnesty and tax avoidance were two negative actions that reduce the investor trust’s in the company.

Psychosocial Adjustment of First Year Gymnasium Students Depending on Gender

Research background and hypothesis. The data of students’ national academic achievements confirmed that high achievements were related to good well-being at school. Most attention should be paid to first year gymnasium students because especially great differences were established in the academic achievements of those who evaluated school microclimate favorably and unfavorably. We hypothesized that the level of psychosocial adjustment of female first year gymnasium students would be higher than that of male students.Research aim. The aim of the present study was to establish psychosocial adjustment of first year gymnasium students depending on their gender.Research methods. The sample included 362 first year gymnasium students, girls (n = 198) and boys (n = 164). They were 14–16 years of age. The Rogers and Dymond’s questionnaire was chosen for the evaluation of psychosocial adjustment (Rogers, Dymond, 1954). It was translated into the Lithuanian language and adapted for the Lithuanian population (Klizas, 2009). Besides the psychosocial adjustment subscale, we analyzed other subscales (self-esteem, evaluation of others, emotional comfort, integrity, domination, avoidance of problem) as well which helped reveal the person’s psychosocial adjustment.Research results. Analyzing the level of gymnasium students psychosocial adjustment in the aspect of gender, we established statistically significant difference in the avoidance of problems (t = –3.19; p < 0.05). We established that the level of negative evaluation of others for boys and girls was statistically significant (χ 2 = 10.71; df = 2; p < 0.05). The evaluation of the level of emotional discomfort for boys and girls revealed a statistically significant difference in the aspect of gender (χ 2 = 12.49; df = 2; p < 0.05).Discussion and conclusions. We established that psychosocial adjustment of first year gymnasium students was of low level. Such components of psychosocial adjustment as adjustment, evaluation of others, emotional comfort, integrity, domination and avoidance of problems were of low level, and only self-esteem was moderate. In the aspect of gender, we revealed a statistically significant difference in the avoidance of problems (p < 0.05). The avoidance level of girls in the first year of the gymnasium was higher than that of boys. But for boys, the levels of adjustment, evaluation of others, emotional comfort, integrity, domination were higher than those of girls. Self-esteem for girls was higher than that of boys; however, no statistically significant difference was found.Keywords: school (adjustment) microclimate, emotional comfort, avoidance of problems.

Patients’ over-visit phobia versus physician’s over-prescription phobia

Background: Hospital administrators conduct survey of patients to solicit their satisfactions and/or concerns for accreditation or renewal of license. For the first time in the literature, this article defines and illustrates the existence of patient’s over-visit phobia and the physician’s over-prescription phobia. These phobias pave way to formulate policy to increase hospital’s efficiency.Methods: The number, of times a patient visits the physician (with a visitation rate) and the number, of prescriptions written by a physician (with a prescription rate) are assumed to follow Poisson type probability patterns. This article, in a novel manner, untangles intricacies and inter-relations of these two phobias.Results: An analysis of the Australian Health Survey data, using our model and methodology, estimates visit and prescription rate to be and respectively. The chance for patient’s visit phobia and physician’s prescription phobia is respectively 0.33 (with a reluctance level 2.16 to make additional visits) and 0.46 (with an avoidance level 3.17 to prescribe more medicines).Conclusions: A few comments and suggestions are stated to save service time/cost for the sake of more hospital’s efficiency. With a methodology in this article, level of over-visits by the patients and the level of over-prescriptions by the physicians are estimable to reduce the waste of hospital’s resources.