Loading...
Corporate Tax Planning: Measurement, Incentives and Governance Effects
Khawar, Muhammad
Khawar, Muhammad
Publication Date
2020
End of Embargo
Supervisor
Rights
The University of Bradford theses are licenced under a Creative Commons Licence.
Peer-Reviewed
Open Access status
Accepted for publication
Institution
University of Bradford
Department
Faculty of Management Law and Social Sciences
Awarded
2020
Embargo end date
Collections
Additional title
Abstract
This research reviews the existing Tax Planning (TP) measures and explores the
consistency of UK firms’ engagement in TP; evaluates incentives for TP and its value
relevance in a signalling theory framework; and studies corporate governance effects
on TP for the firms in an institutional theory framework. It analyses a unique set of
1,482 hand-collected firm-year observations and proposes ‘undisclosed TP’ as a new
TP measure. It finds that firms consistently engage in TP and their TP disclosures
have improved; internationally oriented firms do not engage in TP to save taxes; risky
firms, firms with low operating cashflows and growing firms, however, do not engage
in TP to arrange funds internally – so they signal their non-engagement in TP to the
market. Further findings confirm public awareness and market valuation of firms’ TP
engagements. Boards’ tax affiliations result in reductions in tax payments (expenses)
for strongly (weakly) governed firms. Professional accountancy qualifications on the
board result in significantly higher tax payments for weakly governed firms. The
auditors’ provided tax services (institutional ownership) result in higher tax payments
for weakly (strongly) governed firms suggesting supplementary (complementary) role
of auditors (institutional ownership) for the internal governance on TP. This research
concludes that there is a need for further TP disclosures to reduce the information
asymmetry associated with negatively valued TP activities; recommends auditors’
involvement in TP services; and recommends tax affiliates on the board to bring tax savings
in a strongly governed environment. The current study’s findings have important theoretical and practical implications.
Version
Citation
Link to publisher’s version
Link to published version
Link to Version of Record
Type
Thesis
Qualification name
PhD