Hsu, W. H., and Liu, H. T. 2018. Tax Avoidance and Pyramidal Layers. NTU Management Review, 28 (1): 1-42. doi:10.6226/NTUMR.201804_28(1).0001   
Tax Avoidance and Pyramidal Layers
許文馨 / 國立臺灣大學會計學系教授
Wen-Hsin Hsu, Professor, Department of Accounting, National Taiwan University

劉心才 / 國立臺灣大學會計學系助理教授
Hsin-Tsai Liu, Assistant Professor, Department of Accounting, National Taiwan University

中文關鍵字金字塔投資層級, 企業避稅活動, 有效稅率

This study investigates whether the span of corporate pyramids (as measured by the number of ownership layers) is associated with a firm’s tax avoidance activities. Using a unique sample of publicly traded non-financial firms of Taiwan, which are required to disclose information on all of their affiliates, we measure the span of corporate pyramids using the number of layers in them. Consistent with corporate pyramids generating higher agency costs and information asymmetries, we find that firms with a large number of layers engage in more tax avoidance activities, leading to lower effective tax rates. Furthermore, we find that the well-documented positive association between the level of tax avoidance and having investees in tax havens becomes more pronounced as the number of layers increases. Overall, the results support the argument that the length of pyramidal layers allows the parent firm to conduct intercompany transactions to prevent inappropriate tax avoidance activities from detection.
英文關鍵字pyramidal layers, tax avoidance, effective tax rate