Relationship between Income Tax System Reform, Book-Tax Difference and Corporate Governance on the Effective Tax Rate

• Main Authors: Ming-Jr Shiu, 許明智
• Other Authors: Jui-Chih Wang
• Format: Others
• Language: zh-TW
• Published: 2012
• Online Access: http://ndltd.ncl.edu.tw/handle/93524887965694599802

碩士 === 國立臺北商業技術學院 === 會計財稅研究所 === 100 === In the past, few literatures investigate the relationship between income tax system reform, book-tax difference and corporate governance on the effective tax rate. This study uses the sample of listed companies from the Taiwan's economic journal (TEJ) database during the period from 2000 to 2010. By using the multiple regression model, this study investigates the relationship between income tax system reform, book-tax Income difference and corporate governance on the effective tax rate. The empirical results show that the effective tax rate are significantly affected by the tax system reform. After implementing the transfer pricing auditing guidelines in 2005, effectively reducing the associated enterprises use transfer pricing policy shift income to low tax area, and making the effective rate higher than before. After the implementation of minimum tax system in 2006, which increases the tax base of high-income taxpayers and make their tax higher than before, consequently, increase the corporate effective tax rate. After the decrease of corporate income tax rate in 2010, The corporate deflate the effective tax rate. When our government implemented the tax reform mentioned above, the change of effective tax rate changes, will be consistent with the spirit of the new system which have a noticeable influence on effective tax rate. Furthermore, this study find that book-tax difference has a significant negative impact on enterprises effective tax rate. The results also show that when the company with larger book-tax difference, more earnings management by the firms, more company's effective tax rate decent. In this study, we divided the corporate governance into two aspects: board structure and ownership structure, to view the effect on corporate effective tax rate. The results show that both board structure and ownership structure have negative effects on corporate effective tax rate. Under the board structure system, when the majority of the board are independent directors, the empirical results show that the interplay between the book-tax difference and corporate governance has a positive effect on corporate effective tax rate. On the other hand, when the CEO isn’t the Chairman, the effect on lower the book-tax differences and higher the corporate effective tax rate do not exit. Regarding the ownership structure system, when the directors have higher ratio of the firm’s stock, which can reduce the book-tax difference, resulting the company's effective tax rate be significantly higher. However, the interaction between the manager hold a higher rate of firm’s stock and tax difference, which doesn’t higher the effective tax rate in this study.