The value of a flow-through entity in an integrated corporate tax system

• 成果类型: Article
• 署名作者: Edwards, Alexander; Shevlin, Terry
• 署名单位: University of Washington; University of Washington Seattle; University of Toronto
• 刊物名称: JOURNAL OF FINANCIAL ECONOMICS
• ISSN/ISSBN: 0304-405X
• DOI: 10.1016/j.jfineco.2011.03.003
• 发表日期: 2011
• 页码: 473-491
• 关键词: corporate tax integration; Flow-through Entity; Tax clienteles; implicit taxes

摘要

In an integrated corporate tax system, resident shareholders receive a tax credit for corporate tax paid that can be used to offset personal tax on dividend income. Nonresident and tax-exempt (pension plan) investors cannot use the tax credit on corporate dividends and thus prefer to invest in flow-through entities. We estimate the value of the flow-through entity to nonresident and pension plan investors by examining the price change around the date of an unexpected announcement of a change in tax law related to Canadian publicly traded income trusts units creating an entity-level tax that makes them no longer tax-favored to these investors. (C) 2011 Elsevier B.V. All rights reserved.