Book-Tax Income Differences and Major Determining Factors

Lee, B. Brian; Vetter, William V.; Williams, Michael

doi:10.5430/afr.v4n3p55

Cited by 5 publications

(4 citation statements)

References 28 publications

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“…On the other hand, the temporary differences that cause a future tax liability create a deferred tax liability. The two main accounts that contribute to these differences are depreciable tangible assets and intangible assets (Lee et al, 2015). Deferred tax liabilities are recognized when tax expense is greater than the tax payable.…”

Section: Deferred Tax and Earnings Managementmentioning

confidence: 99%

“…Some managers misuse the flexibility provided by accounting standards to manipulate tax for accomplishing their personal earnings objectives which might affect the country welfare (Lee, Vetter, Williams, & Research, 2015;Mulyadi, Anwar, & Sciences, 2015). The accounting scandals like Enron, WorldCom showed that managers are able to manipulate earnings in the way they plan.…”

Section: Introductionmentioning

confidence: 99%

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Does Deferred Tax Mediate the Relationship Between Tax Planning and Earnings Management?

Salah

2019

الفکر المحاسبى

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The objective of this study is to investigate the effect of deferred tax disclosed under the Egyptian Accounting Standard No. 24, income taxes and tax planning on earnings management. In addition, to investigate the role of net deferred tax liabilities as a mediator between tax planning and earnings management. This study employs a sample of 127 firms listed on the Egyptian stock exchange covering the period 2012 to 2018 ending up with 889 observations. Stratified simple random sampling technique was used to select the sample. Path analysis is employed to examine the framework of the study and analyses the indirect effect of tax planning on earnings management. In addition, Ordinary Least Square Regression is employed to calculate discretionary accrual, which is used as a proxy to earnings management. The results suggest that tax planning does not have a significant direct effect on earnings management. However, it has a significant indirect effect on earnings management through net deferred tax liabilities, which in turn has a significant direct effect on earnings management. Findings of this paper may be of interest to financial analysts and standard setters, as they highlight how tax planning and deferred tax liabilities affect the quality of accounting information.

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Section: Deferred Tax and Earnings Managementmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Does Deferred Tax Mediate the Relationship Between Tax Planning and Earnings Management?

Salah

2019

الفکر المحاسبى

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“…BTD is primarily attributed to two factors: (1) different income calculation procedures for book and tax revenue as well as (2) different strategies employed by management to boost book income while reducing tax revenue. BTD can therefore originate from earnings management, tax avoidance, or both (Lee, Vetter, & Williams, 2015). Hidayati and Fidiana (2017) explain that one item of the company's corporate social responsibility (CSR) involves costs that can be deducted as business expenses, such as community health initiatives, scholarship programs, and environmental protection, which can be associated with tax avoidance activities.…”

Section: Introductionmentioning

confidence: 99%

Tax avoidance motives in property and real estate firms

Ramadanti¹,

Putra²

2022

JAA

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The purpose of this study is to examine and determine the impact of CSR, capital intensity, and corporate risk on tax avoidance in property and real estate sector firms listed on the Indonesia Stock Exchange from 2016 to 2019. This quantitative study utilized secondary data from 101 sample companies collected purposively. To test the hypotheses, multiple linear regression was employed. The findings showed that CSR had no effect on tax avoidance. In contrast, capital intensity had a negative impact on tax avoidance, whereas corporate risk had a positive impact. Thus, it is implied that property and real estate companies do not use their fixed assets to take advantage of depreciation to avoid taxes that can harm the government; on the contrary, companies have fixed assets to run their operations.Keywords: Tax Avoidance; Capital Intensity; Corporate Risk; Corporate Social ResponsibilityAbstrakTujuan penelitian ini adalah untuk meneliti pengaruh CSR, intensitas modal, dan resiko perusahaan terhadap penghindaran pajak di perusahaan sector property dan real estate yang terdaftar di Bursa Efek Indonesia mulai tahun 2016 sampai dengan 2019. Penelitian kuantitatif ini menggunakan data sekunder dari 101 data perusahaan. Regresi linear berganda digunakan dalam penelitian ini untuk menguji hipotesis. Hasil penelitian menunjukkan bahwa CSR tidak memiliki pengaruh terhadap penghindaran pajak. Namun, intensitas modal memiliki pengaruh negative terhadap penghidaran pajak, sedangkan resiko perusahaan memiliki pengaruh positif. Hal itu berarti perusahaan property dan real estate tidak menggunakan asset tetap perusahaan sehubungan dengan depresiasi untuk menghindari pajak yang dapat merugikan pemerintah. Sebaliknya, perusahaan menggunakan asset tetap untuk menjalankan kegiatan operasional perusahaan.Kata Kunci: Penghindaran Pajak; Intesitas Modal; Risiko Perusahaan; Corporate Social Responsibility

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“…This phenomenon causes tax avoidance that possibly committed by tax payer for their tax planning. Besides, this book tax differences is often used as factor in research due to it's usability to track profit management and tax activity closely related with tax avoidance (Lee, Vetter, & Williams, 2015).…”

Section: Introductionmentioning

confidence: 99%

Slum Population In India: Extent And Policy Response

Sawhney¹

2016

IJRBS

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The research's first purpose is to analyze directly conservatism accounting influence towards book tax differences and tax avoidance. The second purpose is to analyse indirect influence towards tax avoidance through book tax differences. The research is conducted to companies enlisted in Indonesian Stock Exchange and belongs to LQ45 during 2013 to 2015. The number of companies sample taken by purposive sampling is 23 corporations, therefore total observation is 69 observations. The acquired data analysed by path analysis. This research conclude that conservatism accounting practice significantly influence book tax difference practice but did not influence tax avoidance. Conservatism accounting practice is also having no influence towards tax avoidance committed by book tax differences. This book tax difference is only significantly influential to commit tax avoidance. This research can contribute in taxation field as input in tax planning formulation.Page56 avoidance does not belong in the category of tax laws because the taxpayer's attempt to minimize or avoid the tax expense is committed by various ways made possible by tax laws. According to Finnerty, Merks, Petriccione, and Russo (2007), the ways that can be done for such things are: first, moving the tax subjects and or objects to countries that implement special treatment on tax or tax haven country on substantive tax planning. Second, tax avoidance attempt can be done through formal tax planning that give the taxpayer lowest tax expense. The third, by using anti-avoidance requirements towards transfer pricing, thin capitalization, treaty shopping, and controlled foreign corporation (specific anti avoidance rule), and transaction without business substance (general anti avoidance rule). In recent years, the tax authorites tried as hard as they can, not only to enforce clear boundaries between tax avoidance and tax evasion in tax planning, but also to prevent taxpayer from entering obscurity caused by tax laws (Bovi, 2005). With so many negative impacts caused by tax avoidance, research is needed to minimize the occurance, by investigating variables related to tax avoidance.

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Book-Tax Income Differences and Major Determining Factors

Cited by 5 publications

References 28 publications

Does Deferred Tax Mediate the Relationship Between Tax Planning and Earnings Management?

Does Deferred Tax Mediate the Relationship Between Tax Planning and Earnings Management?

Tax avoidance motives in property and real estate firms

Slum Population In India: Extent And Policy Response

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