| Summary: | 碩士 === 國立臺灣大學 === 會計學研究所 === 90 === Abstract
Graduate Institute of Accounting
National Taiwan University
Name：Hung-Sheng Chou
Adviser：Suming Lin, PhD., CPA
Title：Tax Avoidance Transactions during Ex-dividend Days under the
Imputation Tax Credit System in the information and electronics
industries.
Month/Year：May, 2002
Taiwan has adopted the imputation tax credit system since January 1st 1998.The new tax system integrates individual income tax and the business income tax to eliminate double taxes on business income. But there still are loopholes for investors to avoid tax burden or earn tax return under the new tax system. For example, investors with high personal income tax rate may sell out their stocks before the ex-dividend day and buy them back after the ex-dividend day to avoid their tax burden. On the other hand, investors with low income tax rate may buy stocks before the ex-dividend day and sell it out afterward to earn excess stock returns. Those trading strategies will cause the government to lose substantial tax revenue from the high tax rate investors, and refund the business income tax to the low tax rate investors.
Using a sample consisting of companies in the information and electronics industries from 1998to 2000, this study empirically finds that there is positive abnormal trading volume during the ex-dividend day. In addition, the empirical result also supports the firm size has positive influence on cumulative abnormal volume. In terms of the bargain hunting, company profit and the impact of different sub-industries, this study does not find any significant evidence to support the hypothesized relation between CAV and above mentioned factors. Most important of all, the level of tax credit ratio is also unrelated with CAV. That means the empirical result does not support the hypothesis that investors will avoid being assessed more tax with the sell and buy back strategy during the ex-dividend period. Therefore, in Taiwan’s information and electronics industries, investors may care more about the appreciation of stock value than tax burden.
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