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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id	my-uum-etd.6712
record_format	uketd_dc
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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Corporate tax avoidance : determinants of effective tax rate (ETR) of multinational corporations in Malaysia

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