Relationship Between Tax Planning and Cash Flow Ratio of Company Listed in The Stock Exchange of Thailand
Keywords:
Tax Planning, Cash Flow Ratio, Corporate TaxAbstract
This research aims to study relationship between tax planning cash flow ratio of listed company in the stock exchange of Thailand. Financial data was collected from company listed in stock exchange of Thailand between 2021 – 2023 and found that 529 companies had completed data. Independent variable was tax planning and dependent variables was cash ratio. Minimum, maximum, mean, and standard deviation were used for data analyzed. Multiple linear regression was used for hypothesis testing and analyzed for relationship between variables at 0.05 significant level.
The result found that tax planning which measured of the effective tax rate, actual corporate income tax expenses under the cash fundamental, and the difference between the corporate income tax rate according to accounting principles and tax rules measured had positive relation with cash ratio. Tax planning by measured effective tax rate had the most correlation with cash ratio. This reflected that actual income tax expense in current period affected company cash flow. Therefore, company should have tax planning which will reduce tax payment and increate more profit. Tax planning can be done by choosing tax benefits. If company use any of tax benefits, it will reduce tax payment of company. Moreover, company will not have to pay penalties and surcharges if they have a correct tax planning but an incorrect tax planning will lead to incremental tax payment as a result, cash flow has decreased. The Company must follow the announcement of tax benefits and be strict about the use of benefits
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