Corporate Governance and Tax Law
Asian Tax Journal Vol. 14 No. 2 (2013), pp. 81-110
Abstract
There is relatively little attention on the interaction of corporate governance and tax law even though corporate governance and tax law are very closely interrelated. Regarding this aspect, this paper tries to study the relationship between corporate governance and tax law by considering four topics. First, after contemplating the stance of management and shareholders about investment, this study proves that the effectiveness of the regulations for enhancing investment depends on the final decision－maker. The second topic is about the partiality between retention of earnings and dividends and the agency costs. Especially, it is confirmed that shareholders could choose retention of earnings despite agency costs because tax burden would decrease. Third, tax treatments of inter－corporate dividends in Korea and U.S. are examined and it is investigated whether there is relation between taxation of inter－corporate dividends and corporate pyramids. The last discussion is about corporate social responsibility and tax law from the view point of tax avoidance and donation.
Keywords
- Corporate Governance
- Agency Costs
- Controlling Shareholders
- Inter－Corporate Dividends
- Corporate Social Responsibility.
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