Differences in the Alternative Minimum Tax between Institutional Investors and Individual Investors - by Using Event Study

• Main Authors: Chih-Chung Hsieh, 謝智忠
• Other Authors: Ying-Te Chen
• Format: Others
• Language: zh-TW
• Published: 2007
• Online Access: http://ndltd.ncl.edu.tw/handle/87274248324031330946

碩士 === 朝陽科技大學 === 會計所 === 95 === To rationalize the nation’s taxation systems, the Ministry of Finance proposed a draft of the alternative minimum tax (AMT) in 2005. On December 9, 2005, the AMT proposal passed its third reading in the Legislature Yuan. This new policy was predicted to have negative impacts on all industry, but press through it just influence electronic industry. It was predicted to have negative impacts on electronic industry. This paper uses event study to examine the electronic industry reactions to the changes of the AMT policy in 2005. The prior literatures indicate the changes of policy were not affecting all industry. Because the key point to be applied AMT is effective tax rate less than 10%, we sort out the samples in terms of effective tax rate. The prior literatures indicate institutional investors have superior information, so we sort out the samples in terms of institutional ownership. Finally, we separated the samples into institutional ownership and effective tax rate. The results are as follows: 1. On August 19, 2005, when the Executive Yuan passed corporate AMT, electronic industry had significant negative impacts. On December 12, 2005, when the Legislative Yuan passed the third reading, this event no longer affected electronic industry. 2. Whenever AMT can be applied, electronic industry was not affected. 3. We find that electronic firm with higher institutional ownership were not affected on August 19, 2005, but it was affected on December 12. Finally, we find that separated the samples into higher institutional ownership and apply to AMT is not affected, but others are affected on August 19 2005. 4. On December 12 2005, we find that separated the samples into higher institutional ownership and apply to AMT are affected, but that separated the samples into lower institutional ownership and apply to AMT are not affected.