Family firms, tax avoidance, and socioemotional wealth: evidence from tax reform in Taiwan

Kuo, Chii-Shyan

doi:10.1007/s11156-021-01029-5

Cited by 16 publications

(16 citation statements)

References 72 publications

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“…The Taiwanese setting is of particular interest for several reasons. Firstly, unlike the United States, where the majority of public companies are owned by shareholders, most Taiwanese listed businesses are family‐owned (Fan & Wong, 2002; Kuo, 2022; La Porta et al., 1999). Family ownership leads to power being concentrated on every aspect of the business, and the opposition of minority shareholders may be neglected.…”

Section: Literature Review and Hypotheses Developmentmentioning

confidence: 99%

Auditor tax expertise and corporate tax avoidance: Evidence from Taiwan

Liu

et al. 2023

J Corp Accounting Finance

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The link between auditor tax expertise and corporate tax avoidance is investigated in this study. Using a sample of Taiwanese listed firms from between 2005 and 2019, it is found that companies that hire auditor tax experts engage in a higher level of tax avoidance. The results also show that this association is more pronounced among firms that have subsidiaries registered in tax havens. The findings of this study show that this positive association between auditor tax expertise and corporate tax avoidance can be mitigated through the adoption of IFRS. This study makes a contribution to existing literature by using a unique Taiwanese setting to study the tax avoidance effect of auditor tax experts and the effect of a common tax avoidance technique have on tax savings.

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Section: Literature Review and Hypotheses Developmentmentioning

confidence: 99%

Auditor tax expertise and corporate tax avoidance: Evidence from Taiwan

Liu

et al. 2023

J Corp Accounting Finance

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“…Kuo (2022) suggests that three criteria should be met to consider that a firm is family controlled. The first criterion deals with the sum of the direct and indirect ownership by the largest family shareholder that should be above the required percentage level to control the firm.…”

Section: Family Firms and Tax Avoidancementioning

confidence: 99%

“…Based on a sample of 9,360 firm-year observations of listed Taiwanese firms over the period of 1998-2014, they document that family firms are negatively associated with tax avoidance and this negative impact is mitigated under high levels of corporate opacity. Kuo (2022) examines the effect of family ownership on tax avoidance for a sample of 4,841 firm-year observations over the period of 2016-2019. In 2018, Taiwan has undertaken a tax reform that abolishes the imputation system.…”

Section: Review Of Empirical Studiesmentioning

confidence: 99%

“…Finally, the inverse relationship between tax avoidance and effective tax rate may make the interpretation of the results quite difficult. Subtracting effective tax rate from nominal tax rate as recommended by Kuo (2022) may create a new measure of tax avoidance. This new proxy of tax avoidance varies negative value for low tax avoidance regime to nominal tax rate (when effective tax rate is close to zero) under high level of tax aggressiveness.…”

Section: Future Research Perspectivesmentioning

confidence: 99%

“…board composition, ownership structure, auditor characteristics) and tax avoidance (Kovermann and Wendt, 2019). Recent empirical enquiries dealing with the determinants of tax avoidance have shifted the turn to focus on the relationship between family firms and tax avoidance (Flamini et al , 2021; Kovermann and Wendt, 2019; Brune et al , 2019a, 2019b; Eddleston and Mulki, 2021; Lee and Bose, 2021; Kuo, 2022). Accordingly, it becomes interesting to review this new stream of research to get an in-depth understanding of how diverse family characteristics (e.g.…”

Section: Introductionmentioning

confidence: 99%

See 2 more Smart Citations

Tax avoidance in family firms: a literature review

Khelil

Khlif

2022

JFC

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Purpose This paper aims to review the empirical literature dealing with the association between family firms and tax avoidance. Design/methodology/approach Empirical papers are collected based on electronic searches in several editorial sources (e.g. Elsevier, Emerald, Meridian Allenpress, Springer, Sage, Taylor and Francis and Wiley-Blackwell) in family-related, accounting and finance journals. Key words used to identify relevant studies are “family firms” or “family ownership” combined with “tax avoidance”, “tax aggressiveness”, “tax evasion” and “tax heaven”. This search yields 21 published papers over the period of 2010–2022. Findings The summary of empirical studies examining the relationship between family firms and tax avoidance suggests that the majority of them have been conducted in Germany, USA and Taiwan and other European civil law countries. The association between family firms and tax avoidance is negative in USA, Finland and Belgium. By contrast, the relationship between family firms and tax avoidance is positive and significant in other developed (Germany and Italy) and developing economies (Brazil, India, Malaysia and Tunisia). In Taiwan, the impact of family firms on tax avoidance depends on corporate opacity that mitigates the negative impact of family firms on tax avoidance. Practical implications With respect to regulators, this review informs fiscal authorities that family firms are associated with high levels of tax aggressiveness in some settings (e.g. Brazil, Germany, Italy and Tunisia). Accordingly, they should be aware about this tax management behavior in family firms to avoid its adverse effect on tax revenues. With respect to auditors, this study alerts them about the necessity to consider fiscal audit risk linked to family firms when planning their audit missions especially in countries characterized by high level of corporate opacity. Originality/value This literature review represents a first historical record and an introduction for accounting scholars who aim to investigate the topics linked to tax aggressiveness in the family firms’ context. It also highlights some limits related to this stream of research and offers future research perspectives.

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Heterogeneity in family firm finance, accounting and tax policies: dimensions, effects and implications for future research

Bergmann

2023

J Bus Econ

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Family firms, as a unique organizational form, are associated with distinct finance, accounting, and tax behaviors. Prior research indicates that heterogeneity among family firms is linked to significant variation concerning these outcomes. However, the scope of dissimilarities, their empirical operationalization, and the corresponding effects of heterogeneity remain largely unexplored. Therefore, this study maps the dimensions of family firm heterogeneity addressed in extant research based on a systematic review of 91 articles published between 1999 and 2021. Focusing on heterogeneity in corporate governance and wider firm characteristics, the most relevant effects of heterogeneity for family firm finance, accounting, and tax policies are discussed in depth. The results across the 24 identified dimensions of heterogeneity show that heterogeneity is a key factor to be considered by family business scholars. Previous heterogeneity research has specifically focused on heterogeneity rooted in differences concerning the firms’ management, ownership structure, board composition, and transgenerational issues. However, this study also finds that additional conceptual and practical challenges emerge at the heterogeneity level of analysis. Several recommendations for advancing the understanding of family firm heterogeneity have been derived. In particular, the results indicate a need to distinguish more clearly between sources of heterogeneity that are strictly specific to family firms and those that extend beyond the family firm level, thereby proposing a refined, more restricted approach toward family business heterogeneity.

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Family firms, tax avoidance, and socioemotional wealth: evidence from tax reform in Taiwan

Cited by 16 publications

References 72 publications

Auditor tax expertise and corporate tax avoidance: Evidence from Taiwan

Auditor tax expertise and corporate tax avoidance: Evidence from Taiwan

Tax avoidance in family firms: a literature review

Heterogeneity in family firm finance, accounting and tax policies: dimensions, effects and implications for future research

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