دانلود رایگان مقاله انگلیسی مالیات: تاثیر عدم اطمینان مالیاتی بر سهام نقدی شرکت - اشپرینگر 2017

Abstract

We examine whether firms hold more cash in the face of tax uncertainty. Because of gray areas in the tax law and aggressive tax avoidance, the total amount of tax that a firm will pay is uncertain at the time it files its returns. The tax authorities can challenge and disallow the firm’s tax positions, demanding additional cash tax payments. We hypothesize that firms facing greater tax uncertainty hold cash to satisfy these potential future demands. We find that both domestic firms and multinational firms hold larger cash balances when subject to greater tax uncertainty. In terms of economic significance, we find that the effect of tax uncertainty on cash holdings is comparable to that of repatriation taxes. Our evidence adds to knowledge about the real effects of tax avoidance and provides a tax-based precautionary explanation for why there is such wide variation in cash holdings across firms.

6 Conclusions

We examine whether tax uncertainty is a partial explanation for variation in cash holdings across firms. Because of complexity and ambiguity present in the tax laws, tax avoidance often involves some degree of uncertainty. Upon audit of the firm’s returns, the tax authorities may have a different opinion of the firm’s taxes and demand repayment of the tax savings. We posit that firms engaging in tax avoidance will hold additional cash for precautionary purposes to pay the tax claims on their uncertain tax positions. We find that both domestic and multinational firms with tax uncertainty hold significantly larger cash balances than firms that have little tax uncertainty. Finding the effect in purely domestic firms is important because it rules out repatriation tax effects as an alternative explanation, since purely domestic firms, by definition, do not face repatriation taxes. In addition, in the tests using multinational firms we include a longrun repatriation tax measure and find both repatriation taxes and tax uncertainty help explain cash holdings. The magnitude of the effect is economically significant. The average firm in our sample holds 19.8% of their total assets in cash. Controlling for other factors that affect cash holdings, including any direct effects of tax avoidance on cash flow, the data show that moving from the first decile of tax uncertainty to the tenth decile of tax uncertainty is associated with an increase in the assets held in cash of 3.3%.