Tax avoidance over time: insights from the incentivised corporate taxpayer

• Autorzy: Hamzah Fairus Halizam A. , Hamid Nadiah Abd , Zawawi Siti Noorhayati Mohamed

Identyfikatory

DOI

10.17512/pjms.2021.24.1.08

Warianty tytułu

PL

Unikanie podatków z czasem: wnioski z zachęty podatnika korporacyjnego

• Języki publikacji: EN

Abstrakty

EN

An incentivised firm that pays low tax may not be engaging in fraudulent management, as generally assumed. However, it could have been due to tax avoidance strategies observed through reduced or lowered Effective Tax Rate (ETR) across ten years. Therefore, this research investigated the time trend of ETR over ten years and the determinants associated with the trend among firms with incentives. This paper focuses on tax avoidance strategies applied by corporate firms in Malaysia that utilised Reinvestment Allowance (RA) tax incentives. Results showed only a minimal increase of 0.2 per cent with low ETR averages of 6.47 per cent over a decade. Findings from this study on the consistent low tax sustained by firms with incentives throughout ten years could be due to tax exemption from numerous generous tax incentives and having taxpayers exploit the loopholes of the taxation system.

PL

Firma motywowana, która płaci niskie podatki, może nie angażować się w nieuczciwe zarządzanie, jak się powszechnie zakłada. Może to jednak być spowodowane strategiami unikania opodatkowania zaobserwowanymi poprzez obniżoną lub efektywną stawkę podatkową (ETR) w ciągu dziesięciu lat. Dlatego w badaniu tym zbadano trend czasowy ETR na przestrzeni dziesięciu lat oraz determinanty związane z trendem wśród firm z zachętami. Niniejszy artykuł koncentruje się na strategiach unikania opodatkowania stosowanych przez firmy korporacyjne w Malezji, które korzystały z zachęty podatkowej w postaci ulgi na inwestycje (RA). Wyniki wykazały jedynie minimalny wzrost o 0,2 procent przy niskich średnich ETR wynoszących 6,47 procent w ciągu dekady. Ustalenia z tego badania na temat konsekwentnie niskich podatków utrzymywanych przez firmy korzystające z zachęt przez dziesięć lat mogą wynikać ze zwolnienia podatkowego z licznych hojnych zachęt podatkowych i wykorzystywania przez podatników luk w systemie podatkowym.

Słowa kluczowe

EN

effective tax rates; tax avoidance; reinvestment allowance; tax incentive; taxation

PL

stawki podatkowe efektywne; unikanie podatków; ulga reinwestycji; zachęta podatkowa; opodatkowanie

• Wydawca: Czestochowa University of Technology
• Czasopismo: Polish Journal of Management Studies
• Rocznik: 2021
• Tom: Vol. 24, No. 1
• Strony: 126--141
• Opis fizyczny: Bibliogr. 43 poz., tab.

Twórcy

autor

Hamzah Fairus Halizam A.

• Faculty of Accountancy, Universiti Teknologi MARA, Malaysia

autor

Hamid Nadiah Abd

• Faculty of Accountancy, Universiti Teknologi MARA, Malaysia

autor

Zawawi Siti Noorhayati Mohamed

• Faculty of Accountancy, Universiti Teknologi MARA, Malaysia

Bibliografia

• 1.Arniati, T., Puspita, D.A., Amin, A. and Pirzada, K. (2019). The implementation of good corporate governance model and auditor independence in earnings’ quality improvement, Entrepreneurship and Sustainability Issues 7(1): 188-200.
• 2.Bank Negara Malaysia., (2017). Rethinking Investment Incentives. Bann Negara Malaysia Quarterly Bulletin, 3rd Quarter. Retrieved from http://www.bnm.gov.my/files/publication/qb/2017/Q3/p3_ba1.pdf
• 3.Bozanic, Z., Thornock, J. R., Hoopes, J. L. and Williams, B. M., (2017). IRS Attention. Journal of Accounting Research, 55(1), 79-114.
• 4.Chen, D., (2015). The Framework for Assessing Tax Incentives : A Cost-Benefit Analysis Approach. Paper for Workshop on Tax Incentives and Base Protection New York, 23-24 April 2015.
• 5.Delgado, F. J., Fernandez-Rodriguez, E. and Martinez-Arias, A., (2014). Effective Tax Rates in Corporate Taxation: a Quantile Regression for the EU. Engineering Economics, 25(5), 487-496.
• 6.Derashid, C., Zhang, H., (2003). Effective tax rates and the “industrial policy” hypothesis: evidence from Malaysia. Journal of International Accounting, Auditing and Taxation, 12(1), 45-62.
• 7.Dischinger, M., Knoll, B. and Riedel, N., (2014). The role of headquarters in multinational profit shifting strategies. International Tax and Public Finance, 21(2), 248-271.
• 8.Drake, K. D., Hamilton, R. and Lusch, S. J., (2020). Are declining effective tax rates indicative of tax avoidance? Insight from effective tax rate reconciliations. Journal of Accounting and Economics, 70(1), 101317.
• 9.Dyreng, S. D., Hanlon, M. and Maydew, E. L., (2008). Long-Run Corporate Tax Avoidance. The Accounting Review, 83(1), 61-82.
• 10.Dyreng, S. D., Hanlon, M., Maydew, E. L. and Thornock, J. R., (2017). Changes in Corporate Effective Tax Rates Over the Past 25 years. Journal of Financial Economics, 124, 441- 463.
• 11.Evers, L., Miller, H. and Spengel, C., (2015). Intellectual property box regimes: effective tax rates and tax policy considerations. International Tax and Public Finance, 22(3), 502- 530.
• 12.Finér, L., Ylönen, M., (2017). Tax-driven wealth chains : A multiple case study of tax avoidance in the Finnish mining sector. Critical Perspectives on Accounting, 48, 53-81.
• 13.Forsling, G., (1998). Utilisation of Tax Allowances. Finnish Economic Paper, 11(2), 96-109.
• 14.Frank, M. M., Lynch, L. J. and Rego, S. O., (2009). Tax Reporting Aggressiveness and Its Relation to Aggressive Financial Reporting. The Accounting Review, 84(2), 467-496.
• 15.Frischmann, P. J., Shevlin, T. and Wilson, R., (2008). Economic Consequences of Increasing the Conformity in Accounting for Uncertain Tax Benefits. Journal of Accounting and Economics, 46 (2-3), 261-278.
• 16.Fuest, C., Riedel, N., (2009). Tax evasion, tax avoidance and tax expenditures in developing countries: A Review of the literature. Report prepared for the UK Department for International Development (Vol. 44).
• 17.Griffith, R., Devereux, A., (2003). Evaluating tax policy for location decisions. International Tax and Public Finance, 10(2), 107-126.
• 18.Hanlon, M., (2005). The Persistence and Pricing of Earnings, Accruals, and Cash Flows When Firms Have Large Book-Tax Differences. The Accounting Review, 80(1), 137-166.
• 19.Hanlon, M., Heitzman, S., (2010). A review of tax research. Journal of Accounting and Economics, 50(2-3), 127-178.
• 20.IRBM., (2015). Decentralisation of Income Tax Files Subsequent To the Setting Up of Large Taxpayer Branch ( Ltb ) and Large Taxpayer Unit ( Ltu ). Retrieved from http://lampiran1.hasil.gov.my/pdf/pdfam/DECENTRALISATION_OF_INCOME_TAX .pdf
• 21.Jones, C., Temouri, Y. and Cobham, A., (2018). Tax haven networks and the role of the Big 4 accountancy firms. Journal of World Business, 53(March 2017), 177-193.
• 22.KPMG International., (2018). Which Firms Paid The Most in Taxes. Retrieved 2 December 2018, from https://home.kpmg.com/my/en/home/media/press-releases/2018/01/which-firms-paid-the-most-in-taxes.html
• 23.Kraft, A., (2014). What Really Affects German Firms’ Effective Tax Rate? International Journal of Financial Research, 5(3), 1-19.
• 24.Lee, N., Swenson, C., (2012). Are Multinational Corporate Tax Rules as Important as Tax Rates ? The International Journal of Accounting, 47(2), 155-167.
• 25.Mohanadas, N.D., Salim, A.S.A. and Ramasamy, S., (2021). Corporate Tax Avoidance of Malaysian Public Listed Companies: A Multi-Measure Analysis, Accounting and Finance Review, 6(1): 44 - 53.
• 26.Mahenthrian, S., Kasipillai, J., (2011). Influence of Ownership Structure, Corporate Governance, and Cultural on Tax Policy: Evidence from Malaysia. SSRN Electronic Journal, 1-31.
• 27.Markle, K. S., Shackelford, D., (2009). Do Multinationals or Domestic Firms Face Higher Effective Tax Rates? NBER Working Paper No. 15091.
• 28.Nasution, M. K., Santi, F., Husaini, H., Fadli, F. and Pirzada, K., (2020). Determinants of tax compliance: a study on individual taxpayers in Indonesia. Entrepreneurship and Sustainability Issues, 8(2), 1401-1418
• 29.Noor, R. M., Mastuki, N. and Bardai, B., (2008). Corporate Effective Tax Rates: A Study On Malaysian Public Listed Companies. Malaysia Accounting Review, 7(1), 1-20.
• 30.Noor, R. M., Mastuki, N. and Bardai, B., (2009). Book-Tax Difference and Value Relevance of Taxable Income: Malaysian Evidence. Journal of Financial Reporting and Accounting, 7(2), 19-40.
• 31.Pfeiffer, O., Christoph, S., (2017). Tax Incentives for Research and Development and Their Use in Tax Planning. ZEW- Centre for European Economic Research. Discussion Paper No 17-046.
• 32.Pradipta, A; Zalukhu, A.G., (2020). Audit Report Lag: Specialized Auditor and Corporate Governance, Global Journal of Business and Social Science Review, 8(1): 41 - 48.
• 33.Rudyanto, A. Pirzada, K., (2021), The role of sustainability reporting in shareholder perception of tax avoidance, Social Responsibility Journal, Vol. 17 No. 5, pp. 669-685.
• 34.Richardson, G., Lanis, R., (2007). Determinants of the variability in corporate effective tax rates and tax reform: Evidence from Australia. Journal of Accounting and Public Policy, 26(6), 689-704.
• 35.Sari, D.P., Lutfillah, N.Q., Rahayu, S., Yudi Y. and Rahayu R., (2021). Taxpayer's Compliance: Towards Voluntary Compliance, Journal of Finance and Banking Review, 6(1), 62 - 71.
• 36.Salihu, I. A., Annuar, H. A. and Sheikh Obid, S. N., (2015). Foreign investors’ interests and corporate tax avoidance: Evidence from an emerging economy. Journal of Contemporary Accounting & Economics, 11(2), 138-147.
• 37.Solikhah, B., Della Firmansyah, N. and Pirzada, K., (2017). The Influence of Effective BOC on Choice of Auditor. Pertanika Journal of Social Science and Humanities, 25 (S), 271- 280
• 38.Startz, R., (2015). EViews Illustrated for Version 9. IHS Global Inc . (M. S. and I. G. Inc, Ed.). IHS Global Inc.
• 39.Taylor, G., Richardson, G., (2012). International Corporate Tax Avoidance Practices: Evidence from Australian Firms. The International Journal of Accounting, 47(4), 469-496.
• 40.Taylor, G., Richardson, G., (2014). Incentives for corporate tax planning and reporting: Empirical evidence from Australia. Journal of Contemporary Accounting & Economics, 10(1), 1-15.
• 41.The Star., (2018). New Malaysia, new taxes. Retrieved 18 October 2018, from https://www.thestar.com.my/business/business-news/2018/10/13/new-Malaysia-new-taxes/
• 42.Thomsen, M., Watrin, C., (2018). Tax Avoidance Over Time: A Comparison of European and U.S. Firms. Journal of International Accounting, Auditing and Taxation, 33, 40-63.
• 43.World Bank., (2018). Global Investment Competitiveness Report 2017/2018. Foreign Investor Perspectives and Policy Implications. Washington, DC: World Bank.