THE EFFECT OF REPATRIATION TAX AND INCOME TAX ON PAYMENTS OF SHAREHOLDERS OF MULTINATIONAL COMPANIES

Title: EFFECT OF REPATRIATION TAX AND INCOME TAX ON PAYMENTS OF SHAREHOLDERS OF MULTINATIONAL COMPANIES

Author: SRIAYU PRACITA

Affiliations: Master of Accounting Study Program, Faculty of Economics and Business, Universitas Airlangga Surabaya

Publisher: Universitas Airlangga

Abstract

Repatriation tax is a tax charge on corporate profits earned in a foreign country brought back to the country where the original company is located. Income tax is a tax that must be paid by companies in accordance with existing regulations. The high increase caused by repatriation tax and income tax can allow a decrease in shareholder payments, which is something that companies should do to pay investors. Shareholder payments can be made by paying dividends or buying back shares. This research aims to examine the effect of repatriation taxes and taxes on shareholder payments. This research uses a sample of multinational companies from American, European and Asian countries listed on Wikipedia for the 2014-2016 period, a total sample of 29 companies with 87 observations. The analysis technique used is multiple linear regression analysis with the SPSS 20 program. The results of this research are (1) repatriation tax has an effect on dividend payments, (2) income tax has no effect on dividend payments, (3) repatriation tax has an effect on share buybacks, and (4) income tax has no effect on share buybacks.

Keywords: Tax repatriation, income tax, dividend payment, share repurchase

Sources: http://repository.unair.ac.id/80360/