Multinationals' Offshore Operations, Tax Avoidance, and Firm‐Specific Information Flows: International Evidence

Kim, Jeong‐Bon; Li, Tiemei

doi:10.1111/jifm.12013

Cited by 18 publications

(7 citation statements)

References 60 publications

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“…We identify a new effect of analyst herding: It can increase crash risk. Our evidence suggests that, at the firm level, there is a determinant of crash risk beyond a firm's internal characteristics, such as financial report opaqueness, chief financial officer option portfolio value, corporate tax avoidance, accounting conservatism, and off‐shore operations (Hutton et al., ; Kim et al., ,b; Kim and Li, ).…”

Section: Introductionmentioning

confidence: 85%

Analyst Herding and Stock Price Crash Risk: Evidence from China

Jiang

Chan

et al. 2016

Financ Manag Account

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We examine the proposition that firms with disproportionately more analysts herding in their coverage, as measured by a larger herding index value, have higher crash risk. Our findings are consistent with the main proposition. The results suggest that information production, rather than monitoring, is the primary mechanism behind the positive relation between herding and crash risk. Our conclusion is robust to different measures of crash risk, crash risk windows, herding measures, subsamples, and instrumental estimation. In addition, using post‐earnings announcement drift, we report that analyst herding slows down bad news transmission in the market. Our findings extend the literature by documenting that analyst herding plays a role in enhancing crash risk. Analyst herding has economic consequences on the covered firms. We offer support for the concern in the literature regarding analyst herding and market fluctuations.

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Section: Introductionmentioning

confidence: 85%

Analyst Herding and Stock Price Crash Risk: Evidence from China

Jiang

Chan

et al. 2016

Financ Manag Account

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“…To reduce their income taxes, the MNE moves its profits to countries with low tax rates and uses different tax systems between countries and uses system tax benefits (Johansson et al, 2017). The MNCs with offshore firms are more aggressive in implementing tax avoidance strategies (Kim and Li, 2014). The differences in tax rates on dividends and operating incomes are factors in determining MNC strategies related to tax planning (Lu and Wu, 2020).…”

Section: Literature Reviewmentioning

confidence: 99%

FOREIGN CAPITAL LOSS, FOREIGN INCOME TAX CREDIT, AND DOMESTIC INCOMES / Foreign Capital Loss, Foreign Income Tax Credit, and Domestic Incomes

Santoso

2021

Uluslararası Ekonomi İşletme Ve Politika Dergisi

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A taxpayer has a different interpretation about compensation for capital loss in the USA with taxable income in Indonesia from the tax authority (DGT). This compensation is related to foreign income tax credit. Tax court states that if the capital loss is recognized in calculating the foreign income tax credit, the capital loss must be considered in calculating the taxable income. By using the case in the tax court decision in Indonesia and analysis of existing regulations, this paper finds that are multiple interpretations in a regulation. The capital loss in the USA only can be compensated in the USA, not in Indonesia. This paper finds that besides the actual tax payments, the calculation of foreign income tax credit can use the tax rates in the tax treaty and effective tax rate from tax payment in a foreign country. The existing tax regulations should be revised to reduce multiple interpretations.

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“…Since tax rates differ from one jurisdiction to another, the reduction of tax expenses has been identified as a good opportunity for companies running businesses globally or those moving headquarters of subsidiaries into territories with more favorable tax regimes [30][31][32]. It also motivates former national companies to become international, and this is not only due to the ability to penetrate new markets.…”

Section: Literature Review and Theoretical Considerationsmentioning

confidence: 99%

A Study from Slovakia on the Transfer of Slovak Companies to Tax Havens and Their Impact on the Sustainability of the Status of a Business Entity

et al. 2019

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The main aim of this paper is to provide empirical evidence about profit-shifting to selected tax havens by Slovak companies. This contribution focused on the very rare evidence of use of tax havens by Slovak companies not only in the field of corporate income tax, but also in selected areas of profitability. Two sources of data were used. Lists of Slovak companies with tax haven links were provided by the company, Bisnode, and financial statements of investigated companies were gained from the Finstat database. Based on the available data, the investigated period was between 2008 and 2016. We statistically tested selected indicators (ETR, taxes per assets, ROE, ROA, and ROS) of Slovak companies with direct ownership links to tax havens compared to their counterparts. Our findings suggest that Slovak companies with an ownership link to tax havens pay significantly lower taxes compared to companies without ownership links to tax havens during the period monitored. The aggressive tax planning was not only confirmed by the significantly lower reported values of ETR and taxes per assets, but also by the lower values of ROA. On the one side, Slovak companies with ownership links to midshore tax havens had the highest values of ROE, ROA, and ROS, but on the other side, these Slovak companies reported the highest ETR among the appointed categories (onshore, midshore, and offshore). The lowest taxes paid per unit of total assets were found in Slovak companies with ownership links to onshore tax havens. The analysis was supplemented by the changes of the selected indicators before and after obtaining an ownership link to a tax haven.

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Multinationals' Offshore Operations, Tax Avoidance, and Firm‐Specific Information Flows: International Evidence

Cited by 18 publications

References 60 publications

Analyst Herding and Stock Price Crash Risk: Evidence from China

Analyst Herding and Stock Price Crash Risk: Evidence from China

FOREIGN CAPITAL LOSS, FOREIGN INCOME TAX CREDIT, AND DOMESTIC INCOMES / Foreign Capital Loss, Foreign Income Tax Credit, and Domestic Incomes

A Study from Slovakia on the Transfer of Slovak Companies to Tax Havens and Their Impact on the Sustainability of the Status of a Business Entity

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