The Relationship between Board of Director’s Characteristics and Corporate Tax Planning of Listed Companies in the Stock Exchange of Thailand
Article Sidebar
Main Article Content
Abstract
This research aims to study the relationship between board of directors’ characteristics and tax planning as measured by the effective corporate income tax rate. This study used panel data analysis using fixed effect regression model to analyze data of listed companies in the Stock Exchange of Thailand in SET 100 between 2013 and 2017, totally 394 samples. The results show a significant negative relationship between the frequency of board meetings and the effective corporate income tax rate. A significant positive relationship was found between the proportion of female directors and the effective corporate income tax rate. This could imply that allocating more time to board meetings leads to more tax planning of listed companies, while a higher proportion of female directors leads to less tax planning of listed companies.
Article Details
This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.
The manuscript submitted for publication must be the original version, submitted only to this particular journal with no prior acceptance for publication elsewhere in other academic journals. The manuscript must also not violate the copyright issue by means of plagiarism.
References
Abdul Wahab, E. A., Ariff, A. M., Madah Marzuki, M., & Mohd Sanusi, Z. (2017). Political connections, corporate governance, and tax aggressiveness in Malaysia. Asian Review of Accounting, 25(3), 424-451.
Abdul Wahab, N. S., & Holland, K. (2012). Tax planning, corporate governance and equity value. The British Accounting Review, 44(2), 111-124.
Barros, V., & Sarmento, J. M. (2020). Board meeting attendance and corporate tax avoidance: Evidence from the UK. Business Perspectives and Research, 8(1), 51-66.
Beasley, M. S., Goldman, N. C., Lewellen, C. M., & McAllister, M. (2021). Board risk oversight and corporate tax-planning practices. Journal of Management Accounting Research, 33(1), 7-32.
Bilimoria, D., & Wheeler, J. V. (2000). Women corporate directors: Current research and future directions. In M. J. Davidson, & R. J. Burke (Eds.), Women in management: Current research issues (Vol. II, pp. 138-163). London: Sage.
Chytis, E., Tasios, S., & Filos, L. (2020). The effect of corporate governance mechanisms on tax planning during financial crisis: An empirical study of companies listed on the Athens stock exchange. International Journal of Disclosure and Governance, 17(1), 30-38.
Dehaene, A., De Vuyst, V., & Ooghe, H. (2001). Corporate performance and board structure in Belgian companies. Long Range Planning, 34(3), 383-398.
Deloitte. (2015). Creating a sustainable tax strategy – Considerations for the board. Retrieved May 14, 2021, from https://www2.deloitte.com/content/dam/Deloitte/ca/Documents/tax/ca-en-directors-alert-tax.PDF
Dermadi, S. (2013). Board members’ education and firm performance: Evidence from a developing economy. International Journal of Commerce and Management, 23(2), 113-135.
Erhardt, N. L., Werbel, J. D., & Shrader, C. B. (2003). Board of director diversity and firm financial performance. Corporate Governance: An International Review, 11(2), 102-111.
Ezejiofor, R. A., & Ezenwafor, E. C. (2020). Corporate governance and tax avoidance: Evidence from Nigerian quoted food and beverage companies. Macro Management & Public Policies, 2(4), 40-47.
Fama, E. F., & Jensen, M. C. (1983). Agency problems and residual claims. Journal of Law and Economics, 26(2), 327-349.
Francis, B. B., Hasan, I., Wu, Q., & Yan, M. (2014), Are female CFOs less tax aggressive? Evidence from tax aggressiveness. The Journal of the American Taxation Association, 36(2), 171-202.
Green, C. P., & Homroy, S. (2018). Female directors, board committees and firm performance. European Economic Review, 102, 19-38.
Hair, J. F., Jr., Black, W. C., Babin, B. J., & Anderson, R. E. (2010). Multivariate data analysis (7th ed.). Upper Saddle River, NJ: Prentice Hall.
Hanlon, M., & Slemrod, J. (2009). What does tax aggressiveness signal? Evidence from stock price reactions to news about tax shelter involvement. Journal of Public Economics, 93(1-2), 126-141.
Hanlon, M., Mills, L. F., & Slemrod, J. B. (2005). An empirical examination of corporate tax noncompliance (Ross School of Business Working Paper No. 1025). Retrieved May 14, 2021, from http://ssrn.com/abstract=891226
Hillman, A. J., & Dalziel, T. (2003). Boards of directors and firm performance: Integrating agency and resource dependence perspectives. The Academy of Management Review, 28(3), 383-396.
Jensen, M. C., & Meckling, W. H. (1976). Theory of the firm: Managerial Behavior, agency costs and ownership structure. Journal of Financial Economics, 3(4), 305-360.
Jermias, J., & Gani, L. (2014). The impact of board capital and board characteristics on firm performance. The British Accounting Review, 46(2), 135-153.
Ji, J., Talavera, O., & Yin, S. (2020). Frequencies of board meetings on various topics and corporate governance: Evidence from China. Review of Quantitative Finance and Accounting, 54(1), 69-110.
Khaoula, F., & Moez, D. (2019). The moderating effect of the board of directors on firm value and tax planning: Evidence from European listed firms. Borsa Istanbul Review, 19(4), 331-343.
Khlif, H., & Achek, I. (2017). Gender in accounting research: A review. Managerial Auditing Journal, 32(6), 627–655.
Kovermann, J., & Velte, P. (2019). The impact of corporate governance on corporate tax avoidance -A literature review. Journal of International Accounting, Auditing and Taxation, 36(3), 1-29.
Lanis, R., & Richardson, G. (2011). The effect of board of director composition on corporate tax aggressiveness. Journal Accounting and Public Policy, 30(1), 50-70.
Lanis, R., & Richardson, G. (2018). Outside directors, corporate social responsibility performance, and corporate tax aggressiveness: An empirical analysis. Journal of Accounting, Auditing & Finance, 33(2), 228-251.
Lin, Y. F., Yeh, Y. M. C., & Yang, F. M. (2014). Supervisory quality of board and firm performance: A perspective of board meeting attendance. Total Quality Management and Business Excellence, 25(3-4), 264–279.
Lui, Y., Wei, Z., & Xie, F. (2014). Do women directors improve firm performance in China? Journal of Corporate Finance, 28(C), 169-184.
Luo, J., Xiang, Y., & Huang, Z. (2017). Female directors and real activities manipulation: Evidence from China. China Journal of Accounting Research, 10(2), 141-166.
McClure, R., Lanis, R., Wells, P., & Govendir, B. (2018). The impact of dividend imputation on corporate tax avoidance: The case of shareholder value. Journal of Corporate Finance, 48(C), 492-514.
Minnick, K., & Noga, T. (2010). Do corporate governance characteristics influence tax management? Journal of Corporate Finance, 16(5), 703-718.
Phrarātchakritsadīkā ʻō̜k tām khwām nai pramūan ratsadākō̜n wādūai kān yokwēn ratsadākō̜n ( chabap thī hokrō̜isī ) Phō̜.Sō̜. 2559 [Royal Decree Issued Under the Revenue Code Governing Tax Exemption (No. 604) B.E. 2559]. (2016, 21 April). Thai Government Gazette. Vol. 133, Parts 33a, pp. 45-48.
Phrarātchakritsadīkā ʻō̜k tām khwām nai pramūan ratsadākō̜n wādūai kān yokwēn ratsadākō̜n ( chabap thī hokrō̜iyīsipsō̜ng ) Phō̜.Sō̜. 2559 [Royal Decree Issued Under the Revenue Code Governing Tax Exemption (No. 622) B.E. 2559]. (2016, 30 August). Thai Government Gazette. Vol. 133, Parts 76a, pp. 17-19.
Pongpitak, S. (2018). Kānwāngphǣn phāsī yāngrai hai thurakit yangyư̄n [How to do tax planning for sustainable business?]. Retrieved June 27, 2021, from https://sme.krungthai.com/sme/productListAction.action?command=getDetail&cateMenu=KNOWLEDG%20&cateId=9&itemId=135
Rego, S. O., & Willson, R. (2012). Equity risk incentives and corporate tax aggressiveness. Journal of Accounting Research, 50(3), 775-810.
Richardson, G., Lanis, R., & Taylor, G. (2015). Financial distress, outside directors and corporate tax aggressiveness spanning the global financial crisis: An empirical analysis. Journal of Banking & Finance, 52, 112-129.
Taylor, G., & Richardson, G. (2014). Incentives for corporate tax planning and reporting: Empirical evidence from Australia. Journal of Contemporary Accounting & Economics, 10(1), 1-15.
Thakolwiroj, C., & Sithipolvanichgul, J. (2021). Board characteristics and capital structure: Evidence from Thai listed companies. Journal of Asian Finance, Economics and Business, 8(2), 861–872.
Thanjunpong, S. (2014). ʻItthiphon khō̜ng kānkam kap dūlǣ kitčhakān thī dī tō̜ kānwāngphǣn phāsī khō̜ng bō̜risat čhotthabīan nai Talāt Laksap hǣng Prathēt Thai [An influence of good corporate governance on tax planning of listed companies in the Stock Exchange of Thailand]. Journal of Accounting Profession, 10(28), 5-18.
Thanjunpong, S. (2018). Phonkrathop khō̜ng kānwāngphǣn phāsī ngœ̄ndai nitibukkhon kap mūnlakhā kitčhakān: Lakthān chœ̄ng pračhak čhāk bō̜risat čhotthabīan nai talāt laksap [The impact of corporate income tax planning on firm value: An empirical evidence from listed companies in Thailand]. Journal of Modern Management Science, 11(2), 42-57.
Thanjunpong, S., & Bangmek, R. (2017). ʻItthiphon khō̜ng khana kammakān bō̜risat khana kammakān trūat sō̜p læ khrōngsāng kān thư̄ hun thī mī phon tō̜ kānwāngphǣn phāsī: Lakthān chœ̄ng pračhak čhāk prathēt Thai [The influence of board of directors, audit committee and ownership structure impact on tax planning: An empirical evidence of Thailand]. Journal of Accounting Profession, 13(37), 29-44.
The Organisation for Economic Co-operation and Development [OECD]. (2015). G20/OECD Principles of corporate governance. Paris: Author.
The Securities and Exchange Commission Thailand [SEC]. (2017). Lakkān kap dūlǣ kitčhakān thī dī bō̜risat čhotthabīan pī sō̜ngphanhārō̜ihoksip [Corporate governance code for listed companies 2017]. Retrieved May 14, 2021, from https://www.sec.or.th/TH/Documents/CompanyHandbooksandGuidelines/CGcode2560_th.pdf
Trachutham, C. (2008). Pō̜ yahā læ ʻuppasak nai kānčhatkep læ kān sīa phāsī ʻākō̜n tām pramūan ratsadākō̜n [Problems and obstacles in collecting and paying taxes according to the Revenue Code]. Retrieved June 27, 2021, from https://www.rd.go.th/fileadmin/download/PramualProj/a1seminar2_3_1.pdf