The Impact of Tax Integration on Stockholders’ Investment Behavior and Corporate Ownership Structure
Date Issued
2007
Date
2007
Author(s)
Huang, Yu-Ting
DOI
zh-TW
Abstract
Tax integration is one of the most important tax reforms in Taiwan. In the past, dividend income must be taxed twice：in the corporate stage and in the personal stage. But after tax integration on the first of January 1998, the corporate income tax is viewed as tax credit when stockholders file their personal income tax. This regulation removed the unfair taxation and thus increased the financing flexibility of corporations.
However, there still allows some tax saving methods. For example, when a corporation gets dividends from another corporation, this dividend income is not taxed according to the income tax law. This regulation makes tax savings possible: an investor may incorporate an investment company and invest other corporations through this company.
The purpose of this study is to investigate the stockholders’ investment behavior and corporate ownership structure change after tax integration. The empirical results show that after tax integration, the institutional investors’ holdings increased while individual investors’ holdings decreased. In the mean time, major shareholders tended to transform their holdings from individual form into corporation form.
Subjects
兩稅合一
股東結構
tax integration
tax credit system
stockholders’ investment behavior
Type
thesis