Influence of Ownership Structure, Corporate Governance, and Culture on Tax Policy: Evidence from Malaysia

Mahenthrian, Sakthi; Kasipillai, Jeyapalan

doi:10.2139/ssrn.1752526

Cited by 3 publications

(4 citation statements)

References 14 publications

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“…In recent years, other international studies followed with analyses of the Australian (e.g., Richardson & Lanis, 2007), Chinese (e.g., Liu & Cao, 2007), German (Sureth et al, 2009), and Malaysian (Mahenthiran & Kasipillai, 2011) markets. Previous studies report mixed results for the relationship between size and ETR.…”

Section: Previous Researchmentioning

confidence: 99%

“…However, Manzon & Plesko (2002) argue that managers may want to increase accounting income and at the same time reduce taxable income. Rego (2003) and Mahenthiran & Kasipillai (2011) claim that more profitable firms may have more incentives and opportunities to reduce their tax burden through tax deductions and hence are more engaged in tax avoidance strategies. Mahenthiran & Kasipillai (2011) argue that profitable firms are likely to engage in aggressive tax planning because of their growing free cash flows and their focus on measuring operating income using accrual rather than cash flow methods.…”

Section: H6b: Mature Firms Have Lower Etrmentioning

confidence: 99%

“…Deferred taxes are payable in future periods. Some studies use current tax expense in the nominator (e.g., Gupta & Newberry, 1997;Rego, 2003;Liu & Cao, 2007), others include deferred taxes (e.g., Sureth et al, 2009;Mahenthiran & Kasipillai, 2011;Amstrong et al, 2012). Omitting deferred taxes can significantly bias the overall tax burden.…”

Section: H10: For More Rent/operating Lease Intensive Firms the Assomentioning

confidence: 99%

“…As discussed in Section 2, this measure ignores the fact that interest expenses are deductible from the tax base. Other studies use pre-tax income (e.g., Rego, 2003;Mahenthiran & Kasipillai, 2011;Amstrong et al, 2012). Due to the disadvantages of using EBIT in Section 2, ETR is calculated here as total tax expense scaled by pre-tax income.…”

Section: H10: For More Rent/operating Lease Intensive Firms the Assomentioning

confidence: 99%

See 3 more Smart Citations

What Really Affects German Firms' Effective Tax Rate?

Kraft

2014

International Journal of Financial Research

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This paper investigates the determinants of the effective tax rate (ETR) of German firms spanning the Germany's Corporate Tax Reform 2008 (GTR08). This paper is the first to analyze the drivers of ETR using German longitudinal data. The results show that larger companies, growth firms, and firms with higher free cash flow (FCF) appear to have higher ETR. Leverage and operating lease expenses tend to be negatively associated with ETR. The findings show that more profitable firms appear to engage more in tax strategies that result in lower ETRs. Moreover, they indicate that multinational firms have more possibilities to reduce the tax burden, resulting in a negative association with ETR. Germany's tax reform of 2008 has a negative effect on ETR and impacts some firm-specific factors. For more levered firms, the association between leverage and ETR is positive affected by the ETR.

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Section: Previous Researchmentioning

confidence: 99%

Section: H6b: Mature Firms Have Lower Etrmentioning

confidence: 99%

Section: H10: For More Rent/operating Lease Intensive Firms the Assomentioning

confidence: 99%

Section: H10: For More Rent/operating Lease Intensive Firms the Assomentioning

confidence: 99%

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What Really Affects German Firms' Effective Tax Rate?

Kraft

2014

International Journal of Financial Research

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Related party transactions and tax avoidance: does government ownership play a role?

Solikhah,

Chen,

Weng

et al. 2024

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Purpose This study aims to examine the association between related-party transactions (RPT) and tax avoidance. The study further investigates whether government ownership improves scrutiny of tax aggressiveness activities among Taiwanese group companies. Design/methodology/approach The authors used 16,061 firm-year observations derived from the Taiwan Economic Journal Database (TEJ) from 2005 to 2021. The authors applied GLS fixed-effect regression. Additional tests, such as a difference-in-difference examination, propensity score matching (PSM) analysis and other tests were performed to obtain more robust results. Findings The results show different consequences between eliminated and non-eliminated RPT toward tax avoidance. RPT enhances tax benefits aligned with the efficient contracting hypothesis. Under varying degrees of government control, this paper empirically reveals that government ownership has a role in mitigating tax avoidance. This implies that government control improves corporate governance by balancing opportunistic and efficiency-based tax avoidance. Practical implications This paper provides substantial practical implications since using the strategy of reducing taxes through RPT will result in greater tax savings at the business group level. Therefore, RPT is beneficial for enhancing business efficiency. Furthermore, government control increases corporate governance quality, which could lead to balancing tax aggressiveness activity. Originality/value Using a unique setting for RPT reporting in Taiwan, this paper divides RPT into eliminated and non-eliminated RPT. The findings offer significant insight for policymakers, investors and managers regarding the utilization of RPT to enhance efficiency in business groups. Additionally, this paper highlights the role of government control in preserving a harmonious balance in tax planning practices.

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What Really Affects German Firms' ETR?

Kraft

2013

SSRN Journal

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Influence of Ownership Structure, Corporate Governance, and Culture on Tax Policy: Evidence from Malaysia

Cited by 3 publications

References 14 publications

What Really Affects German Firms' Effective Tax Rate?

What Really Affects German Firms' Effective Tax Rate?

Related party transactions and tax avoidance: does government ownership play a role?

What Really Affects German Firms' ETR?

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