Besides the tax rates, the regulations governing the tax base, e. The East-Asian market has become increasingly interesting in the past years for investors from Europe and the United States. In recent decades, governments across the world have become increasingly concerned about the impact of taxes on international investment flows. The Asia-Pacific region has gained economic power among the world's economies and offers enormous sales opportunities for multinational companies. We also determine that the extent of legal protections provided to shareholders and the culture of the country in which the firm is incorporated, as well as tax regime, have additional explanatory power for dividend smoothing. The Asian-Pacific countries as well as India and Russia offer multinational companies all the benefits of booming economies in a world of recession.
The first two topics have been covered in Chap. Our results are most consistent with the simultaneous presence of agency and information asymmetry effects in the decision to smooth dividends. Referring to the rate structure, the applicable nominal corporation tax rates vary considerably within the Asia-Pacific region, India, and Russia. The underlying structure for the investment is shown in Fig. In Hong Kong and Malaysia, the definition of taxable income is based on the territoriality principle. In this volume, experts investigate crucial challenges confronted by developing countries in raising revenue. This survey presents the rates, definitions of taxable income and the incentives available in a complete, yet concise form.
Further, firms with highly-concentrated ownership structure and strong corporate governance smooth dividends less. After a comprehensive and insightful overview, each chapter uses modern empirical methods to study a single critical issue essential to understanding the effects of taxes on development. But the particular importance of taxes is due to the fact that taxes can be changed relatively easily and quickly whereas other important factors like e. The leading economic territories have, in the past, attracted manufacturing investments by offering tax incentives. Typical tax planning strategies are illustrated, in addition to the determinants of the tax regimes, allowing for a clear comparison between countries.
Since tax planning strategies differ between countries using the exemption or the credit method in order to avoid double taxation, they have to be developed separately in the cases of Germany and the United States. Some territories especially Hong Kong grant generous allowances for tax purposes whereas other territories are more restrictive. In East Asia, governments are at least as concerned about attracting foreign direct investment as governments in other regions. Direct investment from Germany to the fifteen territories has almost increased tenfold within the last 15 years see Deutsche Bundesbank 1989—2007. In Europe, the significant decline in corporate income tax rates which occurred during the last two decades is widely seen as reflecting the forces of corporate tax competition. In addition, we seek to contribute to literate not only by establishing a country ranking based on the overall tax burden, but also by identifying the underlying tax drivers. However, the investor must be aware of the tax regime under which he will operate.
Now they are starting to change their focus to high technology industries. In addition, managers of firms in industries facing high levels of competition smooth dividends more. Instruments to achieve such objectives are for example the location decision, the decision of financing and the establishment of holding structures. In doing so, sensitivity analyses are run to examine the effects of altering model assumptions, thereby illustrating the sensitivity of the base case results to selected financial ratios. This survey presents the rates, definitions of taxable income and the incentives available in a complete, yet concise form.
She completed her doctoral thesis at the University of Mannheim in March 2013. The corporation tax is complemented by surcharges in India, Japan, and South Korea and by local profits taxes in Japan and the Philippines. The analysis in the preceding sections has focused on describing the tax burden faced by different types of foreign investment in the Asia-Pacific Region. Since tax policies play a great role in choosing a location for investment, tax planning strategies for multinationals have to be considered for investments in the Asia-Pacific region. Mirco Tonin is Professor of Economic Policy on the Faculty of Economics and Management at the Free University of Bozen-Bolzano, Italy. Generally, as regards the fiscal year 2009, the tax systems in the Asia-Pacific region, India, and Russia follow international standards.
Singapore taxes income based on the concepts of territoriality and receipt. . Turning to non-profits taxes borne by corporations the majority of territories levy either a real estate tax or a property tax on business assets. In Hong Kong and Malaysia, the definition of taxable income is based on the territoriality principle. Hence, these territories are going to have increasing importance as a trade and investment partner.
The E-mail message field is required. In the majority of territories considered, resident corporations are taxed on their worldwide income. Cline Chair of Economics and Rice Scholar, Baker Institute for Public Policy, at Rice University. Cite this chapter as: Endres D. Some territories especially Hong Kong grant generous allowances for tax purposes whereas other territories are more restrictive.