Tax Management, Sustainable Competitive Advantage, and the Effects of Tax Reform

Boatsman, James R.; Gupta, Sanjay; Weaver, Connie D.

doi:10.2139/ssrn.323141

Cited by 3 publications

(1 citation statement)

References 12 publications

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“…shareholders) make a diverse assessment of each tax saving component. While prior studies on tax saving components have been performed by researchers (Boatsman et al, 2002;Hanlon, 2005;Atwood and Reynolds, 2008;Bauman and Shaw, 2008) concentrate only on one selective component, this study covers various aspect as it does not concentrate merely on one particular component.…”

Section: Medar 282mentioning

confidence: 99%

Corporate tax planning and corporate tax disclosure

Mgammal

2019

MEDAR

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Purpose This paper aims to examine the impact of corporate tax planning (TP) on tax disclosure (TD). Using tax expenses data set, with the detailed effective tax rate (ETR) by reconciling individual items of income and expenses. Design/methodology/approach A firm-level panel data set is used to analyse 286 non-financial listed companies on Bursa Malaysia that spans the period 2010-2012. Multivariate statistical analyses were run on the sample data. The empirical understanding of TD depends on public sources of data in the financial statement, characterized in the aggregated note of tax expenses. Fitting with Malaysian environment, the authors measured TD using modified ETR reconciling items. Findings Results show that TP, exhibit a robust positive influence on TD. This suggests that TP is related to lower corporate TD. In addition, companies with high TP attempt to mitigate the disclosure problem by increasing various TD. The authors further find significant positive impact between each of firm size and industry dummy, on TD. This means that company-specific characteristics are significant factors affecting corporate TD. Research limitations/implications This study contributes to the literature on the effect of TP on TD. It depends on both the signalling theory and the Scholes–Wolfson framework, which are the main theories concerned with TP and TD. Therefore, from a theoretical side, the authors add to the current theories by verifying that users are the party influenced whether positively or negatively, by the extent of TD or the extent of TP activities through Malaysian organizations. Practical implications The evidence found in this paper has important policy and practical implications for the authorities, researchers, decision makers and company managers. The findings can provide them some relevant insights on the importance of TP actions from companies’ perspective and contribute to the discussion of who verifies and deduces from TD directed by companies. Originality/value This paper originality is regarded as the first attempt to examine the impact of TP on TD in a developing country such as Malaysia. Malaysian setting is an interesting one to examine because Malaysia could be similar to other countries in Southeast Asia. Results contribute significant insights to the discussion about TD regarding, which parties are responsible for the verification of TD by firms, and which parties benefit from this disclosure. Findings suggest that companies face a trade-off between tax benefits and TD when selecting the type of their TP.

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Section: Medar 282mentioning

confidence: 99%

Corporate tax planning and corporate tax disclosure

Mgammal

2019

MEDAR

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Firm Valuation Effects of the Expatriation of U.S. Corporations to Tax Haven Countries

2002

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Firm Valuation Effects of the Expatriation of U.S. Corporations to Tax-Haven Countries

Cloyd

Mills

Weaver

2003

Journal of the American Taxation Association

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U.S. corporations that reorganize in tax-haven countries claim to save many millions of dollars in future U.S. corporate income taxes. However, because these “inversion” transactions may involve significant nontax costs, it is not obvious how they affect share value. We use Monte Carlo sampling to analyze the statistical significance of each inverting firm's abnormal returns around the date that it initially announced its intentions and board of director approval of an inversion transaction. We find that five of the 20 single-company expatriations in our analysis have significant negative announcement period returns and only two show significant positive returns. The remaining 13 inversions show no statistically significant market reaction in the announcement period. The average return in the announcement period across all 20 firms is negative, but not significantly different from zero. Overall, we do not detect obvious shareholder benefits from expatriations.

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Tax Management, Sustainable Competitive Advantage, and the Effects of Tax Reform

Cited by 3 publications

References 12 publications

Corporate tax planning and corporate tax disclosure

Corporate tax planning and corporate tax disclosure

Firm Valuation Effects of the Expatriation of U.S. Corporations to Tax Haven Countries

Firm Valuation Effects of the Expatriation of U.S. Corporations to Tax-Haven Countries

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