| Summary: | 碩士 === 國立成功大學 === 會計學系 === 102 === After the 1998 tax reform, corporate income tax in Taiwan is integrated with individual’s consolidated income tax, imputation credits are given to shareholders in offsetting their income taxes. This study aims to examine the nature of imputation credits and investigate whether market participants would hold different views when considering the relative proportion of non-resident shareholders to domestic shareholders at the same time. In the second part of this study, this paper discusses whether the association between accounting earnings and security returns would be stronger under pro forma statements when reclassifying and incorporating imputation credits into the statement of financial positions. Lastly, we evaluates whether the implicit tax theory is applicable to the distribution of imputation credits.
Evidences from empirical results confirm that the nature of imputation credit is an asset, and the value of which has been recognized by market participants. The results remain the same when considering the influence of non-resident shareholders at the same time. We also find no evidence suggesting that implicit tax theory phenomenon exists regarding to the distribution of imputation credits.
Finally, the most important finding of this study is that capitalize imputation credits would improve the informativeness of financial statements and would thus help provide a set of financial statements that better reflect firm values.
|
|---|
