Corporate tax avoidance : determinants of effective tax rate (ETR) of multinational corporations in Malaysia

Corporate tax avoidance : determinants of effective tax rate (ETR) of multinational corporations in Malaysia

Corporate tax collection is the highest contributor to the revenue for the Malaysian Government as compared to other direct taxes. Likewise, multinational corporations' (MNCs') contribution in terms of corporate taxes in generating the government's tax revenues is also significant pa...

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Main Author: Fazliza, Mohd Kasim
Format: Thesis
Language:eng
eng
Published: 2016
Subjects:
HD2709-2930.7 Corporations
Online Access:https://etd.uum.edu.my/6712/1/s819543_01.pdf
https://etd.uum.edu.my/6712/2/s819543_02.pdf
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institution Universiti Utara Malaysia
collection UUM ETD
language eng
eng
advisor Saad, Natrah
topic HD2709-2930.7 Corporations
spellingShingle HD2709-2930.7 Corporations
Fazliza, Mohd Kasim
Corporate tax avoidance : determinants of effective tax rate (ETR) of multinational corporations in Malaysia
description Corporate tax collection is the highest contributor to the revenue for the Malaysian Government as compared to other direct taxes. Likewise, multinational corporations' (MNCs') contribution in terms of corporate taxes in generating the government's tax revenues is also significant particularly for the developing countries including Malaysia. Although there is an increase in the totals collection of direct taxes over the years, the Inland Revenue of Malaysia (IRBM) is concerned with the issue of the tax avoidance as the number of the tax defaulters is on an increasing trend. Thus, this study attempts to examine the determinants of MNCs tax avoidance by looking at their effective tax rates (ETRs). This study utilized the tax return form data from the IRBM to model the effective tax rates (ETRs) of the MNCs in Malaysia, as a proxy of the tax avoidance. The findings suggest that MNCs in Malaysia can be associated with the tax avoidance since their ETRs are below the statutory tax rates (STRs) as stipulated under the Income Tax Act 1967. The results also suggest firm's size, profitability, extensiveness of foreign operation, capital intensity and leverage are the determinants of the tax avoidance of MN Cs in Malaysia. However, this study does not provide evidence on the significant influence of sector effect and location of the holding company on MNCs' tax avoidance in Malaysia.
format Thesis
qualification_name masters
qualification_level Master's degree
author Fazliza, Mohd Kasim
author_facet Fazliza, Mohd Kasim
author_sort Fazliza, Mohd Kasim
title Corporate tax avoidance : determinants of effective tax rate (ETR) of multinational corporations in Malaysia
title_short Corporate tax avoidance : determinants of effective tax rate (ETR) of multinational corporations in Malaysia
title_full Corporate tax avoidance : determinants of effective tax rate (ETR) of multinational corporations in Malaysia
title_fullStr Corporate tax avoidance : determinants of effective tax rate (ETR) of multinational corporations in Malaysia
title_full_unstemmed Corporate tax avoidance : determinants of effective tax rate (ETR) of multinational corporations in Malaysia
title_sort corporate tax avoidance : determinants of effective tax rate (etr) of multinational corporations in malaysia
granting_institution Universiti Utara Malaysia
granting_department Othman Yeop Abdullah Graduate School of Business
publishDate 2016
url https://etd.uum.edu.my/6712/1/s819543_01.pdf
https://etd.uum.edu.my/6712/2/s819543_02.pdf
_version_ 1747828107505565696
spelling my-uum-etd.67122021-04-05T02:18:31Z Corporate tax avoidance : determinants of effective tax rate (ETR) of multinational corporations in Malaysia 2016 Fazliza, Mohd Kasim Saad, Natrah Othman Yeop Abdullah Graduate School of Business Othman Yeop Abdullah Graduate School of Business HD2709-2930.7 Corporations Corporate tax collection is the highest contributor to the revenue for the Malaysian Government as compared to other direct taxes. Likewise, multinational corporations' (MNCs') contribution in terms of corporate taxes in generating the government's tax revenues is also significant particularly for the developing countries including Malaysia. Although there is an increase in the totals collection of direct taxes over the years, the Inland Revenue of Malaysia (IRBM) is concerned with the issue of the tax avoidance as the number of the tax defaulters is on an increasing trend. Thus, this study attempts to examine the determinants of MNCs tax avoidance by looking at their effective tax rates (ETRs). This study utilized the tax return form data from the IRBM to model the effective tax rates (ETRs) of the MNCs in Malaysia, as a proxy of the tax avoidance. The findings suggest that MNCs in Malaysia can be associated with the tax avoidance since their ETRs are below the statutory tax rates (STRs) as stipulated under the Income Tax Act 1967. The results also suggest firm's size, profitability, extensiveness of foreign operation, capital intensity and leverage are the determinants of the tax avoidance of MN Cs in Malaysia. However, this study does not provide evidence on the significant influence of sector effect and location of the holding company on MNCs' tax avoidance in Malaysia. 2016 Thesis https://etd.uum.edu.my/6712/ https://etd.uum.edu.my/6712/1/s819543_01.pdf text eng public https://etd.uum.edu.my/6712/2/s819543_02.pdf text eng public masters masters Universiti Utara Malaysia Abdul Wahab, N. (2015). Corporate Tax in Malaysia: Revenue, Collection and Enforcement. International Conference on Social Science Research, eISBN: 978-967-0792-04-0, Kuala Lumpur, Malaysia: WorldConferences.net. Abdul Wahab, N., & Derashid, C. (2006). Corporate Average Effective Tax Rates Between Multinational and Domestic-Only Companies in Malaysia. unpublished - UUM. Adhikari, A., Derashid, C., & Zhang, H. (2006). Public policy, political connections, and effective tax rates: Longitudinal evidence from Malaysia. Journal of Accounting and Public Policy, 25, 574 - 595. Blouin, J., Huizinga, H., Laeven, L., & Nicodeme, G. 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