Strategies and dividend imputation: the effect of foreign and domestic ownership on average effective tax rates |
| |
Authors: | Brett R Wilkinson Steven F Cahan Geoff Jones |
| |
Institution: | a Texas Tech University, USA;b Massey University, Palmerston North, New Zealand |
| |
Abstract: | This study examines how dividend imputation affects the incentive of New Zealand firms to minimize tax. By effectively eliminating double taxation on company income, imputation reduces firms’ incentives to engage in costly tax minimization strategies. Before September 1993, resident and nonresident shareholders were treated differently under New Zealand’s imputation system. Because imputation credits cannot be passed to shareholders unless dividends are paid, we expect firms to pursue different tax paying strategies depending on their level of foreign ownership and their dividend payout ratios. After September 1993 when imputation credits were extended to nonresident portfolio shareholders, we expect that firms with high foreign ownership and high dividend payouts would have less incentive to minimize tax. Our results provide some support for these expectations. |
| |
Keywords: | |
本文献已被 ScienceDirect 等数据库收录! |
|