Empirical Tax Research in Accounting

Shackelford, Douglas A.; Shevlin, Terry

doi:10.2139/ssrn.235796

Cited by 174 publications

(174 citation statements)

References 141 publications

(168 reference statements)

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“…Taxes are well known to be important parameters of the institutional environment of investments (for an overview, see Shackelford and Shevlin 2001;Graham 2008;Hundsdoerfer et al 2008;Hanlon and Heitzman 2010). Taxes on both the corporate and shareholder levels can significantly affect investment and divestment decisions.…”

Section: Introductionmentioning

confidence: 99%

Hold or sell? How capital gains taxation affects holding decisions

et al. 2016

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Investments with exit flexibility require decisions regarding both the investment and holding period. Because selling an investment often leads to taxable capital gains, which crucially depend on the duration of an investment, we investigate the impact of capital gains taxation on exit timing under different tax systems. We observed that capital gains taxation delays exit decisions but loses its decision relevance for very long holdings. Often the optimal exit time, which indicates the maximal present value of future cashflows, cannot be determined analytically. However, we identify the breakeven exit time that guarantees present values exceeding those of an immediate sale. While, after-taxes, an immediate sale is often optimal, long holding periods might also be attractive for investors depending on the degree of income and corporate tax integration. A classic corporate tax system often indicates holdings over more than 100 periods. By contrast, a shareholder relief system indicates the earliest breakeven exit time and thus the highest level of exit timing flexibility. Surprisingly, high retention rates are likely to accelerate sales under a classic corporate system. Additionally, the worst exit time, which should be avoided by investors, differs tremendously across tax systems. For an integrated tax system with full imputation, the worst time is reached earlier than under partial or non-integrated systems. These results could help to predict investors' behavior regarding changes in capital gains taxation and thus are of interest for both investors and tax policymakers. Furthermore, the results emphasize the need to control for the underlying tax system in cross-country empirical studies.

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Section: Introductionmentioning

confidence: 99%

Hold or sell? How capital gains taxation affects holding decisions

et al. 2016

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“…According to several researchers (Callihan, 1994;Mills & Newberry, 2001;Shackelford & Shevlin, 2000;Tang, 2005;Formigoni et al, 2009;Comprix, Mills & Schmidt, 2011;Minnick & Noga, 2010;Armstrong et al, 2011), annual ETR is defined as the percentage obtained by dividing the total expenditure on taxes on earnings by earnings before IRPJ of a given company i in year t: 1 2 where 'Income Taxes' is the sum of expenses on IRPJ and CSLL for the current and deferred year, and 'LAIR' is company profit before IRPJ.…”

Section: Measurements To Identify Tax Management: Etr Cashetr and Btdmentioning

confidence: 99%

Corporate Governance Characteristics as a Stimulus to Tax Management

Gomes

2016

Rev. contab. finanç.

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This article aimed to investigate whether corporate governance uses tax management to increase companies' performance. The objective was checking whether corporate governance characteristics, such as remuneration paid to the executive board, segregation between Chairman and CEO, and the independence and composition of the Board of Directors, influence tax management in Brazilian companies. At the same time, it aimed to identify whether the preceding tax management is reflected on the subsequent tax management. To do this, a sample of 355 Brazilian companies listed on the BM&FBOVESPA between 2008 and 2014 was used, in order to find out whether their corporate governance characteristics influenced tax management, something identified by calculating ETR, CashETR, and BTD. As a result, it was found (i) that the remuneration paid to executives may be regarded as a characteristic influencing tax management in Brazilian firms, and (ii) that the preceding tax management influences the future tax management. In addition, it was found that Brazilian companies do not rule out tax management benefits, since the average effective rate in the sample under analysis was 25%, and it is statistically lower than the nominal rate of taxes on earnings in Brazil, which is 34%.

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“…Um exemplo de "todas as partes" é considerar tanto os tributos do empregador quanto do empregado ao estruturar políticas de incentivos a executivos; um exemplo de "todos os tributos" é a análise de determinado título de dívida municipal, que mantém uma taxa de juros baixa porque estes (juros) são isentos de tributação; e um exemplo de "todos os custos" é a relação de escolhas (trade-off) entre finanças corporativas e objetivos tributários (SHACKELFORD; SHEVLIN, 2001). …”

Section: Lista De Figurasunclassified

“…Ademais, pesquisadores que combinam experiência profissional com um conhecimento de microeconomia e finanças estão perfeitamente situados para adotar a nova perspectiva de estudos na área tributária, pois a análise aprofundada dos nuances da lei tributária torna-se uma barreira substancial para muitos pesquisadores da área contábil, particularmente em áreas mais desafiadoras do ponto de vista técnico, tais como tributação internacional e fusões e aquisições (SHACKELFORD; SHEVLIN, 2001). …”

Section: Lista De Figurasunclassified

“…Estes resultados corroboram que os mesmos fatores identificados no estudo de caso podem ser atribuídos às demais companhias brasileiras autuadas pela RFB sob o mesmo fundamento -sucesso ou não na comprovação da natureza de hedge das operações financeiras praticadas em determinado período. A partir da década de 80 a pesquisa em finanças estava perdendo o interesse em tributos (SHACKELFORD; SHEVLIN, 2001). Scholes e Wolfson (1992), em contrapartida, responderam à altura através da adoção da perspectiva microeconômica para analisar cenários em que os tributos eram particularmente importantes, cuja modelagem se baseou em uma estrutura com três pilares: todas as partes (all parties), todos os tributos (all taxes) e todos os custos (all costs), dando fundamentos para o gerenciamento de tributos com foco em objetivos organizacionais, tais como lucro ou maximização da riqueza financeira da empresa (SHACKELFORD; SHEVLIN, 2001).…”

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Assimetria de informação na comprovação da natureza de hedge de operações financeiras para fins de dedutibilidade no imposto sobre a renda: um estudo de caso

Sticca¹

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Palavras-chave: assimetria informacional; hedge accounting; imposto sobre a renda. The hedge purpose in the financial operations on stock and commodities exchange and similar carried out by companies is legal condition to benefit the full deductibility of accounted losses and paid prizes in the income tax assessment in Brazil. However, obstacles in the documental prove of these operations before Brazilian Federal Revenue Office (RFB) are resulting in tax deficiency notices and millionaire fines' application, jeopardizing the risk management instruments applied by companies exactly to avoid unexpected and unwanted results. In this sense, based on the agency theory prescriptions and on empirical studies on accounting and tax which discussed the informational asymmetry causes and effects, this paper aimed to identify factors which affect the information asymmetry between taxpayers and federal tax authorities, specifically with regards to controlling, recording and proving financial operations with hedge purposes, and consequently their tax treatment in the Corporate Income Tax (IRPJ) assessment. By means of a case study with a Brazilian trading company which was notified to collect R$ 16,438,314.10 (value equal to 41.08% of its equity in 2004) by Brazilian tax authorities in 2008, in order to disallow the deductibility of losses excessive to gains assessed on derivatives and swap operations on the calendar-years 2003 and 2004, it was verified that even before the proved existence of ex ante exposure to risk of soft commodities (sugar and ethanol) prices and foreign currency variations, Brazilian legislation´s lack with regards to clear both managerial and accounting criteria in elaborating obligatory internal controls or standard sheets to present information related to operations with general financial instruments (with hedge purposes or not) -which was not sufficiently supplied by the accounting Standards related to hedge accounting in force since 2008 -, results in a marginal loss related to the IRPJ additional cost. Moreover, by means of a broad documental research and content analysis of administrative case law issued by RFB and related to hedge prove, it was verified as critical factors to information asymmetry reduction or elimination the adequate compliance of financial operations to company's operational activity, the financial instruments applied and hedge strategy selected and mainly the documentation repertory presented to Brazilian tax authorities. This results corroborate that the same factors raised on the case study can be projected to other Brazilian companies also notified by RFB under the same basis -success or not on the prove of hedge purposes of financial operations carried out in determined period.

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Empirical Tax Research in Accounting

Cited by 174 publications

References 141 publications

Hold or sell? How capital gains taxation affects holding decisions

Hold or sell? How capital gains taxation affects holding decisions

Corporate Governance Characteristics as a Stimulus to Tax Management

Assimetria de informação na comprovação da natureza de hedge de operações financeiras para fins de dedutibilidade no imposto sobre a renda: um estudo de caso

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