The Impacts of Corporate Income Tax Rate Reduction on Taiwanese Listed Electronic Companies’ Profit Distribution Arrangement

• Main Authors: Chuan-Chi Hong, 洪專基
• Other Authors: Chien-Hung Chen
• Format: Others
• Language: zh-TW
• Published: 2015
• Online Access: http://ndltd.ncl.edu.tw/handle/36664405533079768695

碩士 === 朝陽科技大學 === 財務金融系 === 103 === This study used a sample of listed companies in Taiwan's electronics industry during 2006~2013 to investigate whether the reduction of Business Income Tax rate from 25% to 17% starting in 2010 has affected businesses’ transfer pricing and profit allocation strategy and increased the amount of profits they would allocate to their parent company located in Taiwan. Empirical results indicated that the tax reduction has had an impact on businesses’ income transfer. As the Business Income Tax rate is comparatively lower in Taiwan compared to neighboring nations, businesses have a higher intention to increase the amount of profits to allocate to their Taiwan-based parent company, which can result in lower tax evasion and lower profit allocation to other nations. It was also found that businesses having a subsidiary company located in regions where Business Income Tax is collected tend to have a significantly higher level of income transfer to Taiwan than those having a subsidiary company located in a tax haven.