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DETERMINANTS OF EFFECTIVE TAX RATES IN TURKEY

Year 2019, Volume: 4 Issue: 1, 35 - 45, 30.06.2019

Abstract

This study aims to analyze the determinants of effective tax rates by Turkish public listed companies. It is motivated by the lack of studies on firms’ tax reporting behaviors in Turkey. It focuses on Turkish public listed companies (excluding banking and insurance sectors) between 2007-2016 and data were extracted from the financial statements of firms in respect of the variables. The study establishes the relationship between ETRs and firm specific characteristics of size, leverage, asset mix and profitability. The application of panel data estimation procedures finds that the tax burden is determined by the characteristics of firm size, leverage and capital intensity of each company. The contribution of this paper is two-fold.  Firstly, it is the first study in the context of Turkish public listed companies and their ETRs, secondly it gives information to corporate managers, investors and academics about tax burden of Turkish public listed companies. 

References

  • Reference1. Chen, S., Chen, X., Cheng, Q., & Shevlin, T. (2010). Are family firms more tax aggressive than non-family firms?. Journal of Financial Economics, 95(1), 41-61.
  • Reference2.Delgado, F. J., Fernandez-Rodriguez, E., & Martinez-Arias, A. (2012). Size and other determinants of corporate effective tax rates in US listed companies. International Research Journal of Finance and Economics, 98, 160-165.
  • Reference3.Derashid, C., & Zhang, H. (2003). Effective tax rates and the “industrial policy” hypothesis: evidence from Malaysia. Journal of international accounting, auditing and taxation, 12(1), 45-62.
  • Reference4.Feeny, S., Gillman, M., & Harris, M. N. (2005). Econometric accounting of the Australian corporate tax rates: A firm panel example (No. E2005/16). Cardiff Economics Working Papers.
  • Reference5.Fernandez-Rodriguez, E., & Martinez-Arias, A. (2011). Determinants of effective Tax Rate: Evidence for USA and the EU. Intertax, 39, 381.
  • Reference6.Fernández-Rodríguez, E., & Martínez-Arias, A. (2012). Do Business Characteristics Determine an Effective Tax Rate? Evidence for Listed Companies in China and the United States. Chinese Economy, 45(6), 60-83.
  • Reference7.Fernández-Rodríguez, E., & Martínez-Arias, A. (2014). Determinants of the effective tax rate in the BRIC countries. Emerging Markets Finance and Trade, 50(sup3), 214-228.
  • Reference8.Gupta, S., & Newberry, K. (1997). Determinants of the variability in corporate effective tax rates: Evidence from longitudinal data. Journal of accounting and public policy, 16(1), 1-34.
  • Reference9.Harris, M. N., & Feeny, S. (2003). Habit persistence in effective tax rates. Applied Economics, 35(8), 951-958.Janssen, B. (2005). Corporate effective tax rates in the Netherlands. De Economist, 153(1), 47-66.
  • Reference10.Kim, K. A., & Limpaphayom, P. (1998). Taxes and firm size in Pacific-Basin emerging economies. Journal of international accounting, auditing and taxation, 7(1), 47-68.
  • Reference11.Liu, X., & Cao, S. (2007). Determinants of corporate effective tax rates: evidence from listed companies in China. Chinese economy, 40(6), 49-67.
  • Reference12.Noor, R. M., Mastuki, N. A., & Bardai, B. (2008). Corporate effective tax rates: A study on Malaysian public listed companies. Malaysian Accounting Review, 7(1).
  • Reference13.Noor, R. M., & Fadzillah, N. S. M. (2010). Corporate tax planning: A study on corporate effective tax rates of Malaysian listed companies. International Journal of Trade, Economics and Finance, 1(2), 189.
  • Reference14.Omer, T. C., Molloy, K. H., & Ziebart, D. A. (1993). An investigation of the firm size—effective tax rate relation in the 1980s. Journal of Accounting, Auditing & Finance, 8(2), 167-182
  • Reference15.Plesko, G. A. (2003). An evaluation of alternative measures of corporate tax rates. Journal of Accounting and Economics, 35(2), 201-226.
  • Reference16.Porcano, T. (1986). Corporate tax rates: Progressive, proportional, or regressive. Journal of the American Taxation Association, 7(2), 17-31.
  • Reference17.Richardson, G., & Lanis, R. (2007). Determinants of the variability in corporate effective tax rates and tax reform: Evidence from Australia. Journal of accounting and public policy, 26(6), 689-704.
  • Reference18.Shevlin, T. (1987). Taxes and off-balance-sheet financing: research and development limited partnerships. Accounting Review, 480-509.
  • Reference19.Shevlin, T., & Porter, S. (1992). " The Corporate Tax Comeback in 1987" Some Further Evidence. The Journal of the American Taxation Association, 14(1), 58.
  • Reference20.Stickney, C. P., & McGee, V. E. (1982). Effective corporate tax rates the effect of size, capital intensity, leverage, and other factors. Journal of accounting and public policy, 1(2), 125-152.
  • Reference21.Watts, R., & Zimmerman, J. (1986). Positive theory of accounting. Englewood Cliffs, NY: Prentice-Hall.
  • Reference22.Wilkie, P. J., & Limberg, S. T. (1993). Measuring explicit tax (dis) advantage for corporate taxpayers: An alternative to average effective tax rates. The Journal of the American Taxation Association, 15(1), 46.
  • Reference23.Zimmerman, J. L. (1983). Taxes and firm size. Journal of accounting and economics, 5, 119-149.

DETERMINANTS OF EFFECTIVE TAX RATES IN TURKEY

Year 2019, Volume: 4 Issue: 1, 35 - 45, 30.06.2019

Abstract

Bu çalışmada, halka açık Türk şirketlerinde efektif vergi oranlarının belirleyicilerinin analiz edilmesi amaçlanmıştır. Çalışma, Türkiye’deki şirketlerin vergi raporlama davranışlarının daha önce çalışılmamış olmasına dayanılarak ortaya konmuştur. Çalışmada 2007-2016 aralığında Türkiye’de borsaya kote olan finansal olmayan şirketlere odaklanılmış ve değişkenler dikkate alınarak ilgili veriler söz konusu şirketlerin finansal raporlarından elde edilmiştir. Bu çalışmada efektif vergi oranları ve şirketlere özgü nitelikler olan şirket büyüklüğü, kaldıraç, varlık yapısı ve karlılık arasındaki ilişki ortaya konmuştur. Panel veri analizinin uygulanması ise vergi yükünün şirket büyüklüğü, kaldıraç ve sermaye yoğunluğu ile ilişkili olduğu tespit edilmiştir. Bu çalışmanın iki açıdan katkısı mevcuttur. İlk olarak halka açık Türk şirketleri ve efektif vergi oranları kapsamındaki ilk çalışmadır ve ikincil olarak çalışma halka açık Türk şirketlerinin vergi yüküne ilişkin kurumsal yöneticilere, yatırımcılara ve akademisyenlere bilgi sunmaktadır.  

References

  • Reference1. Chen, S., Chen, X., Cheng, Q., & Shevlin, T. (2010). Are family firms more tax aggressive than non-family firms?. Journal of Financial Economics, 95(1), 41-61.
  • Reference2.Delgado, F. J., Fernandez-Rodriguez, E., & Martinez-Arias, A. (2012). Size and other determinants of corporate effective tax rates in US listed companies. International Research Journal of Finance and Economics, 98, 160-165.
  • Reference3.Derashid, C., & Zhang, H. (2003). Effective tax rates and the “industrial policy” hypothesis: evidence from Malaysia. Journal of international accounting, auditing and taxation, 12(1), 45-62.
  • Reference4.Feeny, S., Gillman, M., & Harris, M. N. (2005). Econometric accounting of the Australian corporate tax rates: A firm panel example (No. E2005/16). Cardiff Economics Working Papers.
  • Reference5.Fernandez-Rodriguez, E., & Martinez-Arias, A. (2011). Determinants of effective Tax Rate: Evidence for USA and the EU. Intertax, 39, 381.
  • Reference6.Fernández-Rodríguez, E., & Martínez-Arias, A. (2012). Do Business Characteristics Determine an Effective Tax Rate? Evidence for Listed Companies in China and the United States. Chinese Economy, 45(6), 60-83.
  • Reference7.Fernández-Rodríguez, E., & Martínez-Arias, A. (2014). Determinants of the effective tax rate in the BRIC countries. Emerging Markets Finance and Trade, 50(sup3), 214-228.
  • Reference8.Gupta, S., & Newberry, K. (1997). Determinants of the variability in corporate effective tax rates: Evidence from longitudinal data. Journal of accounting and public policy, 16(1), 1-34.
  • Reference9.Harris, M. N., & Feeny, S. (2003). Habit persistence in effective tax rates. Applied Economics, 35(8), 951-958.Janssen, B. (2005). Corporate effective tax rates in the Netherlands. De Economist, 153(1), 47-66.
  • Reference10.Kim, K. A., & Limpaphayom, P. (1998). Taxes and firm size in Pacific-Basin emerging economies. Journal of international accounting, auditing and taxation, 7(1), 47-68.
  • Reference11.Liu, X., & Cao, S. (2007). Determinants of corporate effective tax rates: evidence from listed companies in China. Chinese economy, 40(6), 49-67.
  • Reference12.Noor, R. M., Mastuki, N. A., & Bardai, B. (2008). Corporate effective tax rates: A study on Malaysian public listed companies. Malaysian Accounting Review, 7(1).
  • Reference13.Noor, R. M., & Fadzillah, N. S. M. (2010). Corporate tax planning: A study on corporate effective tax rates of Malaysian listed companies. International Journal of Trade, Economics and Finance, 1(2), 189.
  • Reference14.Omer, T. C., Molloy, K. H., & Ziebart, D. A. (1993). An investigation of the firm size—effective tax rate relation in the 1980s. Journal of Accounting, Auditing & Finance, 8(2), 167-182
  • Reference15.Plesko, G. A. (2003). An evaluation of alternative measures of corporate tax rates. Journal of Accounting and Economics, 35(2), 201-226.
  • Reference16.Porcano, T. (1986). Corporate tax rates: Progressive, proportional, or regressive. Journal of the American Taxation Association, 7(2), 17-31.
  • Reference17.Richardson, G., & Lanis, R. (2007). Determinants of the variability in corporate effective tax rates and tax reform: Evidence from Australia. Journal of accounting and public policy, 26(6), 689-704.
  • Reference18.Shevlin, T. (1987). Taxes and off-balance-sheet financing: research and development limited partnerships. Accounting Review, 480-509.
  • Reference19.Shevlin, T., & Porter, S. (1992). " The Corporate Tax Comeback in 1987" Some Further Evidence. The Journal of the American Taxation Association, 14(1), 58.
  • Reference20.Stickney, C. P., & McGee, V. E. (1982). Effective corporate tax rates the effect of size, capital intensity, leverage, and other factors. Journal of accounting and public policy, 1(2), 125-152.
  • Reference21.Watts, R., & Zimmerman, J. (1986). Positive theory of accounting. Englewood Cliffs, NY: Prentice-Hall.
  • Reference22.Wilkie, P. J., & Limberg, S. T. (1993). Measuring explicit tax (dis) advantage for corporate taxpayers: An alternative to average effective tax rates. The Journal of the American Taxation Association, 15(1), 46.
  • Reference23.Zimmerman, J. L. (1983). Taxes and firm size. Journal of accounting and economics, 5, 119-149.
There are 23 citations in total.

Details

Primary Language English
Subjects Business Administration
Journal Section Articles
Authors

Çağrı Aksoy Hazır 0000-0003-1172-1412

Publication Date June 30, 2019
Submission Date March 14, 2019
Acceptance Date April 10, 2019
Published in Issue Year 2019 Volume: 4 Issue: 1

Cite

APA Aksoy Hazır, Ç. (2019). DETERMINANTS OF EFFECTIVE TAX RATES IN TURKEY. Journal of Research in Business, 4(1), 35-45.