An Empirical Study on Income Shifting in Affiliated Enterprises – Evidences from Taiwan Listed Companies

• Main Authors: Li-yu Chan, 陳麗伃
• Other Authors: none
• Format: Others
• Language: zh-TW
• Published: 2009
• Online Access: http://ndltd.ncl.edu.tw/handle/48121347158979072536

碩士 === 逢甲大學 === 財稅所 === 97 === Affiliated enterprises frequently use their operation、investment、financing ac-tivities to reduce the corporate tax burden. They have opportunities to avoid income taxation by shifting income form a high-tax jurisdiction to a low-tax jurisdiction. They take the advantages of income shifting practice to minimize their global taxes and maximize total profits. This study employs data of the listed companies of Taiwan Stock Exchange from 2000 to 2007 to empirically investigate into the relationship between income shifting and transfer pricing. Five hypotheses in explaining the company’s income shifting are tested. The samples divided into electronic and non-electronic industries. The results for overall industry are：(1) Companies with higher levels of inter-affiliate transfer pricing are more likely to shift income. (2)The difference between domestic and foreign tax rates have no significant relationship with company’s income shifting (3) Larger companies are more likely to shift income. (4) Companies with higher levels of debt may have greater difficulty in shifting income due to debt covenant restrictions. The high re-search and development expense intensity companies are less likely to shift income. The high growing companies are more likely to shift income. (5) Companies with a greater degree of internationalization are more likely to shift income. Comparing electronic industry with the entire industry, hypothesis that compa-nies with larger differences in tax rates have more likely to shift income. Smaller companies are more likely to shift income. The other results are consistent with the entire industry. In non-electronic industry, The high research and development ex-pense intensity companies are more likely to shift income .The other results are con-sistent with the entire industry. Key Words: Transfer pricing ； Affiliated enterprise；Income shifting；Tax planning