A Study of Effects of the Half-Reducing Land Value Increment Tax Policy on Tax-Saving and Stock Price

• Main Authors: Shu-Mei Chen, 陳淑梅
• Other Authors: none
• Format: Others
• Language: zh-TW
• Published: 2005
• Online Access: http://ndltd.ncl.edu.tw/handle/76947768923476856844

碩士 === 靜宜大學 === 會計學系研究所 === 93 === Recently, the depression in the global economy leads to sluggish economy of all industries. In addition, the unstable domestic political situations, ambiguous financial and economic policies, and the tension of cross-Strait relations etc., cause that domestic and foreign investors lose confidence in the investment environments of Taiwan, therefore, domestic firms all leave. The government intents to promote the economy, and then proposes several measures, especially, the construction industry called head of the prosperity, then the transactions relating to real estate can be flourished by half-reducing land value increment tax policy. The policy can increase the numbers of cases and further facilitate the growth of those downstream industries, namely iron and steel, cement, and glass ceramics, and domestic economy. Besides, it settles the present straits regarding with the recession of home economy. This paper focuses on whether half-reducing land value increment tax policy can become the means for tax savings planning by big companies, and how they apply it to plan tax during the time for carrying out the policy. Furthermore, this paper investigates the changes in stock prices when the message was announced, and examines the condition for bring this policy into practice. In this study, statistical methods and applies OLS model are employed. The results are as follows: (1) When half-reducing land value increment tax policy is practiced, the volumes of land transaction, the numbers of building license approved, the tax revenues of land value increment tax etc., are all growing up in comparison with that policy is unpracticed, and thus, it has attained expected outcome. (2) Taiwan listed companies, excluding financial and insurance industry, proceed in periods adopting half-reducing land value increment tax policy, and among them through mergers or splits by companies have more advantages than they sell lands. Moreover, the way with both mergers and splits of companies are more common than that with splits of companies. Meanwhile, tax savings planning is most popular in the companies with traditional asset stocks. (3) In time for carrying out half-reducing land value increment tax policy, the companies proceed tax savings planning by merger, so that they can save a lot of land value increment tax, no need to pay actually, and improve their financial structures and enhance their stock prices. (4)When Taiwan listed companies (exclude financial and insurance industry) proceed tax savings planning, the stock prices on announcement date and the next day both rise up apparently. (5) The message about announcing that the companies sell lands, in terms of the sell objects are related parties or not, whether they have different reactions on stock markets. The results show two groups have little differences on average abnormal return ratio, except clear differences on the fifth day before announcement date. Furthermore, the two groups have big differences on average cumulative abnormal return ratio.