• Journal of Korea Trade
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• v.25 no.5
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• pp.74-92
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• 2021

Purpose - Utilizing a large sample of Korean firms, this study examines international diversification impacts on corporate tax avoidance and whether firms affiliated with large business groups (known in Korean as "chaebol") reinforce the relationship between international diversification and tax avoidance. Design/methodology - This paper hypothesizes that 1) international diversification is likely to increase tax avoidance, 2) the positive effect of international diversification on tax avoidance is likely to be more pronounced for chaebol firms. We examine the hypotheses by using Korean firms listed in the Korean stock market between 2011 and 2016. We employ the number of foreign subsidiaries and the entropy index as proxies for international diversification and CASH ETR and GAAP ETR as proxies for tax avoidance. Findings - Our findings are summarized as follows. First, we have found that as firms are more internationally diversified, tax avoidance increases. It means that international diversification can be employed as a method of reducing the tax burden. Second, firms affiliated with chaebol are strengthened by the positive relation between international diversification and tax avoidance. It is interpreted that chaebol firms have more effective opportunities to reduce taxes than other firms. When entering foreign markets, they can share experience and resources to decrease taxation within the large business group. Originality/value - This study provides empirical evidence regarding the tax effect of international diversification. Unlike prior studies, international diversification is positively related to tax avoidance in Korea. In addition, we present additional evidence on the chaebol effects of international diversification on tax avoidance, in which they have an advantage to reduce taxes using transfer pricing through related party transactions, income shifting to low tax rate countries, and establishing subsidiaries in tax havens.

• Management & Information Systems Review
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• v.30 no.1
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• pp.71-86
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• 2011

The existing tax law provides that alloted resident tax on corporation tax is apportioned in accordance with the number of employees and total building area as of the end of business year. Through a case analysis, however, this study found that such apportionment is not applied to businesses whose operation was already withdrawn as of the end of business year. To solve this problem, the study proposed that the apportionment of alloted resident tax on corporation tax should be made in accordance with the number of employees and total building area in the middle of business year and a standard of corporation tax assessment, that is, sales assessed according to the value-added tax law. This proposal already proved to be reasonable by lots of actual cases that showed the realization of balance in taxation. To make more precise standards of the above mentioned apportionment, then, the study proposed that in the ordinance of the local tax law, 'as of the end of business year' should be replaced by 'in the middle of business year'. In addition, 'in the middle of business year' should be defined as 'in the period of continuous business' from the date of business end in the previous year to the date of business end in the present year and the length of the period should be calculated by month. These moves would bring more transparent and balanced local tax assignment than present under the local tax law.

• The Journal of Asian Finance, Economics and Business
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• v.9 no.9
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• pp.317-325
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• 2022

The simple regression model (SRM) is used in this study to look at potential economic growth-influencing factors. The sample's period runs from 2005 to 2019. The data was gathered from various ministries and government agencies such as the Central Bank of Afghanistan's Statistical Bulletin, the World Bank, the United Nations (UN), World Bank open data, NASA, Ministry of Finance (MoF), Ministry of Economy (MoE), and Central Bank of Afghanistan's Statistical Bulletin (CBA), as well as the internet and news. There is an urgent need to ensure that taxes are collected in the most efficient manner possible because one of the enormous management gaps in Afghanistan over the last two decades has been tax evasion. According to the results of this study, tax evasion has a negative and significant impact on Afghanistan's economic growth. We can affirm that the subject of this article is among the most significant topics recently discussed in my country. If the right solutions are implemented, It can significantly contribute to quickening the cycle of the developing Afghan economy and turning it from an unstable to a sustainable one.

• Management & Information Systems Review
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• v.11
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• pp.91-109
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• 2002

This study provides evidence on the determinants of variability in corporate ETRs(effective x rates). Specially, this study examined the association between ETRs, firm size, and variables proxying for firms' capital structure and asset mixes, while controlling for firms' profitability. Overall, results suggest that ETRs are associated with many firm-specific characteristics such as size, capital structure, asset mix, and profitability, and that some of these associations continued after Corporate Tax Law changes. In addition, although the results indicate that the association between ETRs and firm-specific characteristics have undergone a shift since tax law change, these firm-specific characteristics have continued to be associated with ETRs.

• Asian Journal for Public Opinion Research
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• v.12 no.2
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• pp.102-121
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• 2024

Trust is essential for tax compliance. Various tax management issues might diminish taxpayer trust. As a result, as a measure of transparency in the services of the Indonesia's Directorate General of Taxes (DGT), a method for filing various taxpayer complaints is necessary. Whistleblowing is a service given by the DGT that accepts taxpayer issues and complaints. It may be accessed on the DGT's official website. This strategy was intended to increase compliance by instilling trust among taxpayers. This study aims to show how whistleblowing affects tax compliance by utilizing trust as a mediating variable. The study relied on 400 questionnaires issued directly to East Java I DGT Region taxpayers. SEM-PLS with the Smart-PLS tool was utilized for data analysis. According to the study's findings, whistleblowing positively impacts tax compliance, and trust partially mediates the effect of whistleblowing on tax compliance. The outcomes of this study provide empirical proof for the Slippery Slope Framework's contention that building trust is an essential technique for increasing taxpayer compliance.

• Journal of Digital Convergence
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• v.14 no.3
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• pp.381-389
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• 2016

I conducted this study, trying to improve the methods of Sung-Nam city local tax bills, which was based on my previous study where I suggested methods into developing redesign of tax bills. Local tax bills are labeled to be very intricate and puzzling experience to tax payers. To resolve this issue, several local governments have redesigned their tax bills for citizens; however, it was not effective. Therefore I apply the methods to protect their privacy on tax bills and provide checks on their pay bills. Also I design to distinguish between different taxes and change into a better layout for their legibility and better understanding on tax bills. From my previous study, I utilized suggestions into Sung-Nam local tax bills which changed flaws into improvements and easier understanding of the tax payers. I believe the improvements in Sung Nam local tax bills will pursue the public interest of the community through public service design innovations.

• Asia-Pacific Journal of Business
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• v.11 no.3
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• pp.169-184
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• 2020

Purpose - This research is intended to analyze the current status and problems of tax benefits in the R&D sector and suggest ways to improve tax credit for research and manpower development expenses when various countries fiercely develop efforts to enhance national competitiveness through increased investment in R&D Design/methodology/approach - This study will examine the current status of the tax support system for domestic and foreign R&D, and suggest improvement measures to expand research and development activities in the future. Findings - First, a plan may be considered to abolish and perpetuate the sunset deadline for tax credit for research and manpower development expenses as in the case of the United States and Japan. This perpetuation can be a proactive measure to actively support long-term R & D investment in companies facing economic decisions under uncertainty. Second, it should be revised to raise the tax credit rate of large corporations, which are shrinking every year, compared to SMEs, so that both large corporations and SMEs can improve their international competitiveness and secure excellent technologies through R & D. Finally, the target technologies for each new growth engine and source technology should be expanded to various fields, including national cybersecurity enhancement technology, aviation engine technology, carbon emission and global cooling technologies, which are areas of interest in major overseas R&D countries, to help active R&D and investment in these areas. Research implications or Originality - This study can find a contribution in comparing and analyzing the national R&D tax support system and presenting improvement measures at a time when the benefits of tax credit for research and manpower development expenses of large companies are decreasing due to frequent tax law revisions and the government's factors of increasing tax revenues. In addition, recent research and development items and research technologies of foreign countries were analyzed by Nature's top 10 major science and technology issues, and advanced technologies that should be applied to target technology areas by new growth engine and source technology were specifically investigated and presented.

• The Journal of Industrial Distribution & Business
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• v.11 no.4
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• pp.39-46
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• 2020

Purpose: This study looks at the relevance between discretionary revenue and book-tax differences (hereafter BTDs). While the study of earnings management, which focused on discretionary accruals and real earnings management, has largely made, it has not yet been actively researched on discretionary revenues. Therefore, it was believed that discretionary revenue would expand the preceding study by looking at its relevance to BTD, known as financial reporting quality and measures of tax avoidance. In general, prior research suggested that earnings management make BTDs larger. Thus, the relationship between discretionary revenue and the amount of BTD is predicted positive. Research design, data and methodology: To this end, the method of discretionary revenues was used and BTDs measured in four ways. First, Earnings before income tax - estimated taxable income divided by total asset (BTD). Second is fractional rank variable of BTDs (FBTD). Third is Indicator variable equals 1 if the firm-year has a positive BTD, 0 otherwise (PBTD). Fourth is that Indicator variable equals 1 if the firm-year has a BTDs in top(bottom) quartile, 0 otherwise (LPBTD, LNBTD). 4,251 samples were analyzed in the Korean Security market (KOSPI) from 2003 to 2014. Results Empirical analysis shows that BTDs increases as discretionary revenue increases. These results were equally observed when BTDs was measured as a ranking variable or as a indicating variable. These results indicate that earnings management through the revenue of managers exacerbate the quality of financial reporting. Conclusions: In sum, discretionary revenues can be used as an indicator of making BTDs larger and meaningful as the first study of the Korean capital market where discretionary revenues affect accounting information quality. Investors need to increase interest in discretionary revenues because intervention in financial reporting through revenue accounts by managers can increase information asymmetry and agency costs. This means that studies on discretionary revenues that have been relatively small should be expanded. The results also provide important implications for the relevant authorities and investors. Despite these benefits, however, measurement error problems with estimates still appear as limited points, and prudent interpretations are required, and additional follow-up studies are needed in that variables that are not yet considered in this study may affect our findings.

• Management & Information Systems Review
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• v.35 no.4
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• pp.169-184
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• 2016

Deferred tax assets (liability) in a company's financial statements are to reflect the temporary difference between taxable income and accounting income and therefore can provide useful information as a proxy for discretionary accruals. In addition, deferred tax assets allow a company to manage its earnings by reviewing the feasibility of the assets' recognition. As such, this study focused on deferred tax assets to examine their relationship with discretionary accruals, which were measured by a modified Jones model (Dechow et al. 1995), and investigated the impact of audit quality on this relationship. In order to control for the effects of tax rate change and measurement credibility, deferred tax assets of 2,670 non-financial firms from 2009 to 2010 were collected as samples for the study. The results of the empirical analysis are as follows. First, the samples as a whole indicated that deferred tax assets have a negative relationship with discretionary accruals in a general sense, but a high-quality audit did not reveal a significant relationship between them. Second, the 1,379 samples with negative discretionary accruals did not reveal a significant relationship between deferred tax assets and discretionary accruals; however, the result showed a significant negative relationship under a high-quality audit. These findings suggest that in the case of negative discretionary accruals, a high-quality audit restricts an earnings management technique that utilizes deferred tax assets and that the assets can be a useful tool for detecting discretionary accruals. The present study is meaningful in that, unlike previous research, it combined the two contrasting roles of deferred tax assets-that of an earnings management detector and an earnings management tool-to examine their general relationship. The study also suggested that audit quality could influence the usefulness of deferred tax assets in providing information on discretionary accruals.

• Management & Information Systems Review
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• v.7
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• pp.401-426
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• 2001

The form of company divides private and coporate companies. In general. private company has direct connection with owner's fortunes. On the contrary, cooperate company is established by a group of people who invest capital funds on their company and has an independent character. In the case of private company, their are many merits that owner can obtain all the benefits without divisions. However, the owner can mix up the control of accounting between public and private matters. As a result confusing, it is difficult to estimate financial situation of company and is limited to fund supply. Futhermore, owner has unlimited liabilities with law credit as a social cognition. Especially, the government tries to induce conversion of private company into cooperation one on the basis of benefits of tax and so on. In those situations, the purpose of this thesis is to study the management benefits with the conversion of private company into cooperate one focucing on the related tax reduction effect. To do this, I have reviewed all of the related textual achievements and tested the real significancy of tax reduction effect of conversion empirically. Finally, I have concluded that the conversion of private company into coporate one has many benefits including significant tax reduction effect. In other side, I have considered and reviewed many difficulties related conversion privated company into cooperate one and suggested some improvements as results. This thesis is comprises 5 chapters as follows; The first chapter explains purposes and methodologies and extents of this study. The second chapter deals the theoretical basis of conversion of private company into cooperate one and cooperates diverse benefits and types and processes of conversion. The preceding research achievements are also reviewed in this chapter. The third chapter deals empirical testing on the real tax reduction effect of the conversion. The analysis is proceeded through t-test of difference of tax between pre and after conversion. The result is presented so positively that I can conclude that cooperate conversion of private company has real benefit of tax reduction. The forth chapter deals the difficulties and improvements related with conversion. They are considered and reviewed at various aspects such as practical, financial and tax aspect. In fifth chapter, I summarise all of the significant points of this study and have conclusions in various aspects at last. In final point, this study is not enough in sample numbers and sample collecting area for empirical testing of significant tax reduction effect of cooperate conversion and research of more foreign achievements. Those are remained as continuing future studies.