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公司避稅與金字塔結構
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Dharmapala and Hines, 2009). A tax haven in which certain taxes are levied at an
extremely lower rate or even zero attracts corporate entities to establish subsidiaries to
avoid taxes by permitting firms to shift the domestic income away from high-tax
jurisdictions to the tax havens (e.g., see Hines and Rice, 1994 and Grubert and Slemrod,
1998). It is very common to find giant businesses like Boeing, General Electric, Pfizer,
Microsoft, and Google using tax havens to dramatically lower their taxes often to zero.
Angel Gurría, current secretary general of the OECD, called for the need of G20
combating tax avoidance of shifting profits to offshore tax havens (Inman, 2013).
We argue that as the number of layers increases, the obscure nature of tax avoidance
can increase, which makes it easier to conduct intercompany transactions to avoid tax and
make it difficult to be detected by the government. For example, in 2010, it was reported
that Google reduced its overseas tax rate to 2.4% by moving most of its foreign profits
from Ireland to Netherlands and then to Bermuda (Drucker, 2010). The use of three layers
for foreign subsidiaries in Europe is claimed to help Google Inc. to avoid taxes overseas
(Kleinbard, 2011). Thus, we expect the positive association between tax avoidance
activities and having subsidiaries in tax havens can increase with the number of layers. We
form our hypothesis as follows.
H2: Ceteris paribus, the positive association between tax avoidance activities and the
number of layers becomes more pronounced as firms have more investees in tax
haven countries.
3. Research Design
3.1 The Number of Investment Layers
All listed companies in Taiwan are required to disclose information on all of their
affiliated enterprises according to “
Criteria Governing Preparation of Affiliation Reports,
Consolidated Business Reports and Consolidated Financial Statements of Affiliation
Enterprises
” (hereafter CGPAR). This allows us to calculate the number of layers based
on publicly available affiliation information. As firms in many countries are not required
to disclose the structure of corporate pyramids in many countries, such mandatory
disclosures in Taiwan provide a natural choice to test our research questions.
Take Figure 1 as an example. Our firm of interest is Far Eastern Department Stores
on layer 0 because it is the listed firm (or the parent firm). The successive layers of
affiliates below the parent firm are used for calculating the number of layers of the
corporate pyramid. Companies located at layer 1 to layer 5 are all Far Easter Department