Corporate Income Tax Planning that Effects the Firm Value of Companies Listed on the Stock Exchange of Thailand, SETCLMV Index Group
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Abstract
An entity that makes full use of the tax benefits will results in lower operating expense, have a competitive advantage and may increase the firm value. Although it will be regulated by the relevant authorities but it will not eliminate the tax avoidance behavior. The purpose of the study was to explore the corporate income tax planning that effects the firm value of companies listed on the Stock Exchange of Thailand, CLMV Index group. Collecting data from the financial statement and the annual report (56-1). Sample are 37 companies listed on the Stock Exchange of Thailand, CLMV Index group during 2016-2020 total 5 fiscal years. Research instruments in this study and hypothesis testing consisted of descriptive statistic, Pearson’s Correlation Coefficient and Multiple Regression.
The results showed that tax planning the affects firm value, i.e. the book-tax difference has a positive effect on firm value at a statistically significant level of .01, while the TAX/TOTAL ASSET ratio has a negative effect on firm value at a statistically significant level of .1. The control variables affecting firm value were size and industry had a negative effect on firm value at a statistically significant level of .01, while the financial risk leverage had a negative on firm value at a statistically significant level of .1. Effective tax rate and TAX/OCF ratio were not significant. From the results of the study investors can make investment choices based on the entity’s tax planning, where high tax planning may imply earnings management. Relevant agencies can be used to consider issuing standards for protection. Controlling tax evasion and set various policies as appropriate.
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