The Effect of Tax System Characteristics on Cross-Border Mergers and Acquisitions

Although determinants of cross-border merger and acquisitions (M&As) have been given substantial attention in the literature, research examining the effect of tax system characteristics on cross-border M&As is more limited. Cross-border M&As have substantial tax implications for both the acquiring firm and the target firm. Because firms evaluate investments based on expected after-tax returns, I expect that managers consider potential tax savings or costs in making investment decisions across tax jurisdictions. In this study, I use hand-collected country-year-level tax system characteristics to examine tax determinants of the volume and direction of cross-border M&As. I find that tax system characteristics such as controlled foreign corporation provisions, thin capitalization provisions, and the presence of a worldwide versus territorial regime have a significant effect on cross-border M&A activity.

Pengaruh Managerial Tenure Terhadap Tax Avoidance

Tujuan penelitian ini adalah untuk menganalisis hubungan antara managerial tenure terhadap tax avoidance. Penelitian ini dilakukan pada 65 perusahaan manufaktur di Bursa Efek Indonesia selama periode 2015-2017. Hasil penelitian menunjukkan managerial tenure tidak berpengaruh terhadap tax avoidance. CEO tidak melakukan tax avoidance guna mendongkrak reputasinya untuk memperpanjang masa kerja (tenure). Para CEO berupaya meningkatkan kinerja untuk memperoleh kepercayaan pemilik perusahaan, sehingga memperbesar peluang tetap menempati posisinya saat ini. Temuan lainnya adalah ROA tidak berpengaruh terhadap tax avoidance, tinggi rendahnya ROA yang dihasilkan perusahaan bukan merupakan pemicu tindakan tax avoidance. Selain itu, leverage tidak memiliki pengaruh terhadap tax avoidance. Sumber permodalan apapun yang digunakan perusahaan bukan merupakan upaya menghindari pajak. Perusahaan yang berusaha melakukan tax avoidance dapat melakukan berbagai skema selain thin capitalization, antara lain transfer pricing, treaty shoping, atau control foreign corporation. Implikasi penelitian ini tertuju pada strategi tax avoidance yang menarik sekaligus menguntungkan bagi perusahaan, namun di sisi lain dapat berakibat fatal dan merugikan. Kata kunci: tax avoidance, managerial tenure, return on assets, leverage

Editorial: Corporate governance and COVID-19 in the context of coming drastic changes

Corporate governance faces a new set of challenges in light of COVID-19. Corporations would have to reduce their finance by assuming more debt and providing dividends for shareholders. This will lead to a stable financial environment. Corporations might choose among diverse interests that would include a mix of government interests and concentrated ownership. Also, as a result of increase in the use of technology, there will a shift in the bargaining power between capital and labor as corporations will have a wide spectrum in hiring employees worldwide. As we have seen over the past few years, there is increasing pressure to limit foreign investment in strategic sectors and focus on national security screening for foreign corporation accruing domestic firms. This trend is expected to continue as a result of COVID-19 as countries are trying to shore up their economics against external shocks. Moreover, there would be an increase in government ownership in corporations and other types of controls. The presence of the COVID-19 health crisis is likely to push the debate toward stakeholder perception of the corporation, shifting away – over the next few years – from shareholders’ interests. There could be even more focus on employees and the role they play in the corporation. Employees are expected to act as active players in running the affairs of the corporation. Overall, these topics are addressed in the current issue of Corporate Board: Role, Duties and Composition.

Lʼanalyse économétrique appliquée à la fiscalité internationale

Des études récentes contredisent lʼhypothèse axiomatique selon laquelle les règles CFC («controlled foreign corporation rules») conduisent toujours à une augmentation effective des coûts du capital. Bien que indémontrable lʼexistence dʼeffets corrélatifs entre la législation anti-évasion CFC rules et la modulation artificielle du comportement de prise de décision des investisseurs, lʼorientation de ce comportement a démontré des paramètres spécifiques (et complexes) dans lʼanalyse économétrique, à la mesure où des variables, harmonisées aux standards de différentes règles CFC, dans ses différents paramètres, furent considérées: a) dʼun point de vue béhavioriste, cela ratifie la conclusion, dans le sens que cette législation est efficacement combative au détournement artificiel de profits à lʼétranger; b) il en démontre encore la potentielle réadaptation de lʼingénierie financière des multinationales aux nouveaux paramètres dʼimposition-limite, dans des juridictions à faible imposition («seuil de déclenchement fiscal»); et enfin c) il révèle que des règles CFC distinctes peuvent générer des résultats aussi distincts, influençant le comportement économico-rationnel des agents selon des modulations et des perspectives variées. Dans un plexus de 56 pays, avec un biais important de légitimation à lʼexistence de normes anti-détournement type CFC, il a été conclu que ces règles inhibent les structures de déviation de revenus passifs, sans avoir en contrepartie une influence négative significative dans les investissements productifs. La validation de ces corrélations causales sʼest produite en modifiant les paramètres temporel et des variables spécifiques.

Driving Traffic and Customer Activity Through Affiliate Marketing

This chapter aims to contribute to the extant literature on Affiliate Marketing through promoting a better understanding of how differences in cultures and environments can be mitigated – as well as facilitating the awareness of how best practices within Europe and the United States could be achieved. Should influential and wealthy corporations be compelled to pay back taxes after having entered into agreements and investment with a foreign corporation? Whilst many applauded the recent European Commission's ruling with Apple, in the sense that sovereignty (from the European perspective) had prevailed in the ruling, many would also claim that interference with a national sovereignty – and a jurisdiction's already existing agreement with an investing partner also amounts to an infringement of national sovereignty. Clearly, greater clarity is required in reconciling jurisdictional differences – given lack of clarity - as demonstrated in the recent Commission ruling, which also serves as a deterrent for potential investors who are uncertain or have fear of the investing climate.

PERKEMBANGAN CONTROL FOREIGN CORPORATION (CFC ) RULES DI INDONESIA DALAM UPAYA MENGAMANKAN PENERIMAAN NEGARA DARI SEKTOR PAJAK

Globalisasi ekonomi telah memberikan dampak semakin meningkatnya transaksi internasional yang dilakukan oleh perusahaan-perusahaan multinasional . Dalam upaya mencapai laba yang optimal, perusahaanp perusahaan multinational tersebut melakukan berbagai upaya efisiensi, baik yang yang dilakukan dengan cara-cara yang legal maupun yang illegal. Upaya tersebut adalah melakukan penghindaran pajak internasional. Salah satu bentuk penghindaran pajak yang dilakukan adalah melalui skema Control Foreign Corporation (CFC), yaitu upaya penghindaran pajak yang dilakukan dengan cara menunda pengakuan penghasilan dari modal yang bersumber dari luar negeri (khususnya di negara tax haven) untuk dikenakan pajak di dalam negeri. Praktik penghindaran pajak dengan skema ini dapat menggerus penerimaan negara dari sektor pajak. Bagi negara Indonesia yang menjadikan penerimaan pajak sebagai primadona penerimaan negara, hal ini merupakan acaman yang serius. Oleh karena itu untuk menangkal praktik penghindaran pajak ini negara Indonesia membuat CFC Rules. CFC Rules di Indonesia sudah beberapa kali diperbaharui dalam upaya menutup peluang-peluang penghindaran pajak tersebut sekaligus untuk mengamankan penerimaan negara dari sektor pajak.Kata kunci: penghindaran pajak, Control Foreign Corporation (CFC), CFC Rules