Differential Effects of Tax on Choice of Earnings Management Method

조은정,최수영 대한경영학회 2022 大韓經營學會誌 Vol.35 No.6

This study aims to examine whether tax incentives affect a manager’s choice of earnings management strategies; accrual-based earnings management and real-activities manipulation. According to a previous study (Zang 2012), managers selectively use accrual-based earnings management and real-activities manipulation, and decisions on the use of each earnings management method can be affected by various factors. When focusing on upward earnings management incentives, most eanings management using accruals do not affect the corporate tax burden, while real-activities manipulation directly affect the cash flow, which directly affects the corporate tax burden. Thus, the corporate tax burden increases when companies manage earnings upward using real-activities manipulation, compared to the upward earnings management using accruals. As the two types of earnings management incur different tax consequences, we expect the tax burden and a firm’s ability to pay tax will differently affect the earnings management choice. In terms of the current corporate tax burden level of a company, the additional corporate tax burden accompanying the upward earnings management will be a greater cost for companies with a high effective tax rate. Therefore, it will be preferred to accural-based earnings management with a relatively lower tax burden rather than the real-activities manipulation with a greater tax burden. In addition, considering the ability to pay tax of a company, companies with higher ability to pay tax will relatively prefer real-activities manipulation to accural-based earnings management because the additional corporate tax accompanying the upward earnings management will feel less costly to such companies. For analysis, the tax burden was measured as an effective tax rate(ETR), and the ability to pay tax was measured as excess cash holdings(ECH) according to Opler, Pinkowitz, Stulz, and Williamson, (1999). Using the large sample of 7,032 firm-year over the period of 2004-2019, we show empirical evidence that firms with higher ETR have a propensity to prefer accrual-based earnings management over real-activities earnings manipulation, while higher ECH firms prefer real earnings manipulation over accrual-based earnings management. This results indicate that firms with higher tax burdens tend to prefer accrual-based earnings management to real-activities earnings manipulation, while those with higher ability to pay tax tend to prefer real earnings manipulation to accrual earnings management. Further analysis examined whether companies suspected of manage earnings shows differential effect compare to other companies. As a result of the analysis, the main results of the hypothesis that earnings management method is selected according to the tax burden or ability to pay tax shows greater for companies suspected of manage earnings. These results indicate that managers consider their own tax status (i.e., tax burden and their ability to pay tax) when constructing an earnings management portfolio. Our study adds to the existing earnings management researches by showing that choice of earnings management is affected by tax burden as well as a firm’s ability to pay tax in a more general setting. In addition, our study suggests that investors and auditors should be more concerned about a firm’s tax incentives in order to better understand financial reporting.

세무상 이월결손금 공제규모 축소와 이익조정

최보람 ( Boram Choi ),유지선 ( Ji Seon Yoo ) 한국회계학회 2022 회계저널 Vol.31 No.2

본 연구는 2014년부터 2020년까지 KOSPI 기업을 표본으로 하여 세무상 이월결손금과 이익조정의 관계를 연구하였다. 아울러 해당 시기 중 개정된 세무상 이월결손금의 공제한도 축소규정이 이월결손금과 이익조정과의 관계에 추가적인 영향을 미치는지 여부를 확인하고, 이러한 영향이 대기업과 중소기업에 차별적으로 발생하는지 검토하였다. 본 연구의 분석 결과는 다음과 같다. 첫째, 분석대상기간 동안 이월결손금은 발생액이익조정과는 양(+)의 유의하지 않은 관계를, 실질이익조정과는 양(+)의 유의한 관계를 보였다. 둘째, 이월결손금 공제한도 축소가 대기업과 중소기업의 이월결손금-이익조정의 관계에 차이를 발생시키지 않았다. 즉, 공제한도 축소가 이를 적용받은 대기업의 이익조정 행태에 평균적으로 유의한 영향을 미치지 못하였음을 확인하였다. 셋째, 강건성 분석을 통해 공제한도 축소가 이월결손금 규모가 크면서 (작으면서) 영업성과가 좋은 (낮은) 기업의 이익조정 행태에 유의한 영향을 미침을 확인하였다. 이는 공제한도 축소가 특정 상황의 기업에만 영향을 미치기 때문에 전체 표본을 이용한 분석에서 공제한도 축소의 유의한 영향을 관측할 수 없었음을 의미한다. 본 연구는 이월결손금 공제기한 연장의 영향을 통제한 후 이월결손금 공제한도 축소의 영향을 분석한 최초의 연구인 점에서 의미를 갖는다. We aim to examine the effects of the introduction of the tax net operating loss (NOL) limitation on the relationship between tax NOL and earnings management. Several studies conducted during the late 2000s and early 2010s documented a positive relationship, as the existence of tax NOL carryforward promotes earnings management to utilize NOL within the permitted period (Park and Song 2008; Kim and Lee 2009; Park and Yook 2011a; 2011b). However, these studies generally examined selected facets of this relationship; only a few, such as Song and Shim (2013) and Cho and Lim (2016), sought to expand research by identifying factors influencing the relationship between tax NOL and earnings management. Choi et al. (2019) cited the difficulty of collecting tax NOL data as the primary reason for the lack of relevant research. Consequently, studies of tax NOL have declined in recent years. Despite the decline in studies, there have been enactment or revision of several tax laws related to tax NOL. First, the tax NOL carryforward period has been extended. Any tax NOL generated on or after (before) the taxable year of 2009 (2008) is allowed to be offset within 10 (5) years. The carryforward period is further extended to 15 years for tax NOL generated on or after the taxable year of 2020. These extensions of the NOL carryforward period may weaken the ‘motivations’ for earnings management to utilize tax NOL. Second, the tax NOL limitation was introduced. Any tax NOL of firms other than small and medium-sized firms (hereinafter “large firms”) generated on or after the taxable year of 2016 is allowed to be offset by up to 80% of the total tax base. This limitation decreases gradually to 70% for 2018 and 60% for taxable years on or after 2019. The introduction of the NOL limitation represents a restriction on the NOL carryforward period extension. Because previous analyses of the relationship between tax NOL and earnings management used financial data ending on or before 2014, the results do not appropriately reflect the effects of tax law changes occurring after 2009. Our study uses financial data from 2014-2020, a period in which all tax NOL is subject to the carryforward period of 10 years. Thus, this study is the first to examine the relationship between tax NOL and earnings management after controlling for the effects of the extension of the NOL carryforward period, and the analysis yields three findings. First, we find a positive but insignificant association between tax NOL and discretionary accrual (DA), inconsistent with previous studies. However, we observe a positive and significant association between tax NOL and real activity earnings management (REM). These results confirm that the influence of the earnings management behavior of firms decreased after the extension of the NOL carryforward period. Choi et al. (2019) explain that the cost of DA is higher than that of REM because DA involves changes in accounting policy, which will be accompanied by potential legal or political costs. Our results support this view. Second, we find no significant impact of the tax NOL limitation on the relationship between tax NOL and earnings management. Specifically, the relationship between tax NOL and earnings management for large firms (firms limited in NOL offset) is not significantly different from that for small and medium-sized firms (firms not limited in NOL offset). We attribute this lack of significance to differences in the weight of the influence of the NOL limitation among large firms. That is, the NOL limitation only affects large firms under particular circumstances, and thus statistical significance is not observed on average. Third, based on the conjecture that firms with a larger (smaller) amount of tax NOL and higher (lower) operating performance will be affected by the introduction of the NOL limitation to a greater extent than those with a larger (smaller) amount of tax NOL and lower (higher) operating performance, we re-examine the effects of the introduction of the NOL limitation on firms that are expected to be particularly affected by the NOL limitation. The results show that the positive relationship between tax NOL and earnings management becomes stronger for these firms after the introduction of the NOL limitation. Therefore, we confirm that the introduction of the NOL limitation selectively influences firms under certain conditions. Finally, we further examine earnings management in the year prior to the introduction of the NOL limitation. No earnings management behavior is detected prior to the introduction. We also identify that the recognition of deferred assets in NOL does not influence the relationship between tax NOL and earnings management. Overall, our findings imply that tax law enactments or revisions related to tax NOL have a limited impact on decision-making by management. Therefore, we contribute empirical evidence and the political implication that the recent changes in tax laws related to tax NOL have achieved their policy goals of preventing significant tax planning by firms through earnings management.

목표이익을 달성하기 위한 법인세비용을 이용한 이익조정

박종일 ( Jong Il Park ),전규안 ( Kyu An Jeon ) 한국회계학회 2009 회계학연구 Vol.34 No.1

법인세비용 계산의 복잡성과 법인세비용 계산시의 시간제약, 미래이익을 추정하는데 있어서의 자의성은 경영자와 감사인 및 주주 사이에 정보불균형을 가져오며, 따라서 경영자가 목표이익을 달성하기 위하여 법인세비용을 마지막 기회로 이용하는 것이 가능하다(Dhaliwal et al. 2004). 본 연구에서는 보고이익을 공시하기 전에 이익조정 전 이익(당기의 연간 세전이익을 이용한 방법과 3분기까지의 주당순이익을 이용하는 방법으로 측정)이 목표이익(3분기 말의 재무분석가의 이익예측치와 전기 주당순이익으로 측정)에 미달된 기업들이 4분기에서 법인세비용을 이용하여 이익조정을 하는가를 알아보았다. 재무분석가의 이익예측치 자료가 이용가능한 2000년부터 2006년까지의 기간을 분석기간으로 하여 금융업을 제외하고 12월결산법인을 대상으로 최종표본 751개 기업-연도 자료를 이용하여 분석하였다. 본 연구의 실증분석결과는 다음과 같다. 첫째, Dhaliwal et al.(2004)의 방법과 동일한 방법을 이용하는 경우에는 3분기말에 발표된 목표이익에 미달한 기업들과 4분기의 법인세비용을 이용한 이익조정 간에는 관계가 없는 것으로 나타났다. 둘째, 본 연구에서 제안한 방법을 이용하여 분석한 경우에는 목표이익에 미달한 기업들이 3분기까지의 유효법인세율(effective tax rate)보다 4분기의 유효법인세율을 낮추는 것으로 나타났다. 이는 경영자가 법인세비용을 낮추어 이익을 상향조정하는 것을 의미한다. 즉 Dhaliwal et al.(2004)의 방법을 개선하여 본 연구에서 제안된 방법을 이용하여 분석하는 경우에서 Dhaliwal et al.(2004)의 연구에서처럼 3분기에서 목표이익에 미달한 기업들이 4분기의 법인세비용을 이용하여 이익조정을 한다는 결과를 발견하였다. 본 연구에서는 Dhaliwal et al.(2004)에서 이용된 방법보다 개선된 방법으로 측정함으로써 경영자가 목표이익에 미달한 경우 법인세비용을 이용하여 이익조정을 한다는 실증분석결과를 보여주었다는 점에서 의의가 있다. 경영자들이 법인세비용을 이용하여 이익조정을 한다는 본 연구의 결과는 투자자나 채권자, 감독당국 등이 기업(특히 실제 이익을 공시하기 전에 목표이익에 미달한 기업)의 재무제표를 분석할 때 법인세비용에 특히 주의를 기울여야 함을 제안하고 있다는 점에서 의의가 있다. When the complexity of estimating tax expense and the timing of the tax accrual prior to earnings management is considered, Dhaliwal, Gleason and Mills (2004) (hereafter DGM) suggest that tax expense is a powerful and underexplored context for studying earnings management. DGM (2004) establish that, relative to firms that beat the forecast, firms which would miss analysts` consensus forecast of annual earnings per share (EPS) are more likely to decrease tax expense to meet or beat the forecast. Therefore, DGM (2004) examine whether firms manage earnings through decreases in effective tax rates (ETRs) between the third and fourth quarters. They assert that changes in ETRs are consistent with earnings management because tax expense is one of the last accounts closed in determining reported earnings. DGM (2004) insist that although many pretax accruals must be posted in the year-end general ledger, managers estimate and negotiate tax expense with their auditors immediately prior to earnings announcement. So, We examine whether firms manage tax expense to reach earnings targets by applying DGM`s methodology and our improved methodology to Korean firms. The sample consists of non-banking firms (751 firm-years) with a December fiscal year-end listed on the Korean Stock Market over 2000-2006. The data on analysts`s forecasts is collected from the Fn-DataGuidePro Database. Therefore, the sample is limited to firms to be able to collect analysts`s forecasts data from Fn-DataGuidePro Database. We collect other firm-specific financial data from KIS-VALUE Ⅱ database. We support the DGM (2004) arguments that tax expense represents an opportunity for firms to earnings management using changes in ETRs. We conduct the different three measure in regard to targets earnings of empirical tests as DGM (2004) to investigate the sensitivity of DGM`s results to research design choices. We use the consensus earnings forecasts and earnings of the previous year as our proxy for targets earnings. Also, we define ETRQ4 - ETRQ1∼Q3 as the change in annual ETR from the accumulated three quarters(from first to third quarter) to fourth quarter and use this as our measure tax expense management. In our hypothesis, we expect ETRQ4 - ETRQ1∼Q3 to be negatively related to how much the firm would have missed the consensus forecast(or targets earnings). We extend DGM (2004) by exploring a plausible additional explanation for third-to-fourth-quarter decreases in ETRs that they acknowledge as a limitation of their study. DGM (2004) use analysts` consensus forecast as targets earnings and current annual pre-tax earnings as unmanaged earnings. But we use analysts` consensus forecast and previous annual earnings as targets earnings and current annual pre-tax earnings and first∼third-quarter earnings as unmanaged earnings. Managers have strong incentives to meet or beat three benchmarks(to avoid losses, earnings decreases, and missing analyst expectation). DGM (2004) focus on a benchmark(to avoid missing analyst expectation), but we consider two benchmarks (to avoid missing analyst expectation and earnings decreases). We don`t consider the benchmark to avoid losses because loss firms have negative ETRs and negative ETRs don`t have economic meaning. Specifically, we investigate the extent to which greater first∼third-to-fourth-quarter ETR reductions are associated to firms that would miss their consensus earnings forecasts(or targets earnings) absent ETR changes relative to firms that would otherwise reach or exceed these income goals. We posit that firms may use from first to third-to-fourth-quarter ETR changes to reduce reported income when earnings are expected to meet or exceed analysts` forecasts. In our empirical tests, in contrast to DGM`s results when we use DGM (2004) methodology, we find no statistically significant association between analysts` consensus forecasts (a proxy for target earnings) and changes in ETRs (last chance earnings management). However, we recalculate two measures as a proxy for missed targets earnings and find the negative association between the first∼thirdto- fourth-quarter ETR changes and missing income goals absent ETR changes. Our study implies that DGM`s methodology is not proper to Korean Stock Market and DGM`s results are sensitive to research design choices. Overall, our results suggest that, for firms that would miss consensus earnings forecasts in the absence of ETR management, the first∼third-to-fourth-quarter ETR changes are associated with greater reductions in ETRs between the first∼ third and fourth quarters. We also find consistent support for the DGM (2004) argument that firms use ETR as a last-chance earnings management technique, having controlled for firms` manipulation of other accounts. These results are robust to the inclusion of other common earnings management variables, including total accruals and deferred taxes. Our research contributes to the literature in several ways. First, we provide information to investors and policy makers about the extent to which reported tax positions are consistent with tax planning and earnings management by investigating whether income tax expense is commonly used to meet or beat earnings targets. Second, consistent with Healy and Wahlen (1999), we contribute to earnings management research by focusing on specific accruals, which improves the likelihood of discerning between earnings management and effective tax planning as the reason for decreases in ETRs. Like DGM`s assertion by studying the tax expense in total, rather than narrow components of deferred tax expense, we think that our results provide general evidence that reported taxes are used to manage earnings. Finally by improving DGM`s measure we find that the first∼ third-to-fourth-quarter ETR changes are negatively related to income goals absent ETR changes.

법인세율 인상과 이익조정

박수경 ( Park Su-gyeong ) 한국세무회계학회 2020 세무회계연구 Vol.0 No.65

[연구목적] 지난 2018년, 법인세율 과세표준 최고구간(3,000억 원)에 대하여 법인세율이 기존 22%에서 25%로 3%p 인상되었다. 이에 본 연구는 법인세율 인상 기간을 전후하여 기 업들의 이익조정이 차별적 행태를 가지는지에 대해 분석하고자 한다. [연구방법] 법인세율 인상 기간 전후를 더미변수로, 수정 존스 모형과 실물이익조정 모형을 이용하여 추정한 값을 이익조정 대리변수로 하여 법인세율 인상에 따른 기업들의 이익조정 행태를 Pooled OLS 모형으로 검증한다. Pooled OLS 모형의 내생성 문제를 완화하기 위하여 Fixed effect 모형을 이용하여 재검증을 실시하였으며, 법인세율 인상 적용 집단과 그렇지 않은 집단을 구분하여 Difference-in-difference 모형을 적용한 회귀분석을 수행하였다. [연구결과] Pooled OLS 모형, Fixed effect 모형, Difference-in-difference 모형을 이용한 회귀분석 결과, 법인세율 인상 전년도가 다른 연도와 비교하여 재량적 발생액에 5% 유의수준에서 유의적인 양(+)의 차별적 영향을 미치는 것으로 나타났다. 법인세율 인상이 기업의 실물이익조정에 미치는 영향은 미미하였다. 즉 기업은 법인세율이 인상되기 전년도에 법인 세율이 상승하는 차기로의 이익의 이연을 방지하고, 이익을 조기 인식하기 위한 이익조정을 수행하고 있으며, 이러한 이익조정은 실물이익조정보다는 재량적 발생액을 통한 이익조정으로 이루어지고 있음을 확인하였다. [연구의 시사점] 본 연구는 1990년대 이후 인상이 없었던 법인세율과 관련하여 2018년 인상된 법인세율의 효과를 반영하여, 법인세율 인상 시 기업의 이익조정 행태를 비교 연구하였다는 점에서 선행연구와의 차별성이 존재하며, 법인세율 인상 적용 기업들만이 이익조정을 통한 과세소득 조정의 수행을 확인함으로써, 법인세율 개편 시 기업 조세 전략 행태를 고려한 법안의 시행이 요구됨을 시사한다. [Purpose] In 2018, the corporate tax rate increased by 3% p from 22% to 25% for the highest taxable section(300 billion won). Therefore, this study aims to analyze whether firms’ earnings management have discriminatory behaviors before and after the corporate tax rate increase period. [Methodology] The period before and after the corporate tax rate increase period was set as a dummy variable, and the value estimated using the modified Jones model and the real earnings management model was used as the earnings management proxy variable. Then, the firm's earnings management behavior according to the increase in corporate tax rate is verified using the Pooled OLS model, and to alleviate the endogenous problem of the Pooled OLS model, re-validation was performed using a fixed effect model. In addition, a regression analysis using a difference-in-difference model was performed by dividing the corporate tax rate increase applied groups and non-applied groups. [Findings] Regression analysis using Pooled OLS model, Fixed effect model, and Difference -in-difference model showed that the year before the corporate tax rate increase had a significant positive (+) effect on discretionary accruals at a 5% significance level compared to other years. In other words, in the year before the corporate tax rate is increased, the company makes earnings management to prevent deferred profits and to recognize them early. Such earnings management means that earnings management is carried out through discretionary accruals rather than actual earnings management. [Implications] This study is concerned with the corporate tax rate that has not been increased since the 1990s, reflecting the corporate tax rate data increased in 2018, it is difference from previous studies in that it compared the earnings management behavior in the corporate tax rate increase. By confirming the earnings management of companies applied the corporate tax rate increase, this suggests that it is necessary to implement the legislation considering the corporate tax strategy behavior when reforming corporate tax.

이익조정, 재무제표 재공시 및 추가적 세금부담효과

김우영(Kim, Woo-Young) 글로벌경영학회 2013 글로벌경영학회지 Vol.10 No.1

연구는 이익조정의 형태를 발생액이익조정과 실제이익조정으로 구분하고, 이익조정의 형태에 따라 법인세환급액 및 법인세추납액이 경영성과의 대용치인 법인세부담액과 관련성을 연구하는 것이다. 이를 위하여 발생액이익조정과 실제이익조정이 법인세부담액에 미치는 영향과 법인세 환급액과 법인세추납액의 회계처리가 재무제표에 미치는 영향을 이론적으로 검토하였다. 연구는 1999년부터 2009년까지 금융업을 제외한 상장기업을 대상으로 수행되었다. 구체적으로 발생액이익조정, 실제이익조정, 법인세환급액과 법인세추납액, 이익조정과 법인세환급액 및 법인 세추납액의 상호작용변수를 독립변수로 하고, 법인세부담액인 현금유효세율을 종속변수로 하여 회귀분석을 하였다. 연구결과, 발생액이익조정은 실제이익조정을 통제하면 상대적으로 법인세부담액이 낮은 기업에서 행하여지며, 실제이익조정은 법인세부담액을 증가시키나 다른 경영요소를 통제하면 관련성이 없는 것으로 나타났다. 그리고 법인세환급액은 법인세부담이 큰 기업에서 행하여지며, 발생액이익 조정이 있는 경우는 법인세환급으로 이익조정이 감소하여 법인세부담을 감소시키는 것으로 나타 났다. 그리고 실제이익조정이 있는 경우는 법인세환급액으로 인한 손익의 개선효과와 함께 법인 세부담의 증가가 있는 것으로 나타났다. 본 연구는 이익조정, 과거 재무제표의 수정으로 인한 법인세환급액과 법인세추납액이 당기 법인 세부담액의 결정에 미치는 영향을 검증함으로서, 법인세환급액은 이익조정과 함께 당기 경영성과에 영향을 미친다는 것을 제시하였다는데 의의가 있다. 이에 반하여 본 연구와 관련된 선행연구의 부족으로 정치한 이론적 배경을 갖지 못하며, 법인세환급액과 법인세추납액이 발생한 연도의 정보효과만을 검증함으로서 정보의 지속성을 검증하지 못하였다는 한계점이 있다. This essay classifies the forms of earnings management into accrual-based earnings management and real-based earnings management, and analyzes the relationship of corporation tax refund and additional corporation tax payments with corporation tax payment, that is, the proxy of business performance, according to the forms of earnings management. The research covers the listed companies except financial industry from 1999 to 2009. To put it concretely, I do regression analysis putting interaction variables of accrual-based earnings management, real-based earnings management, corporation tax refund, additional corporation tax payments, earnings management, corporation tax refund and additional corporation tax payments as independent variables on the one hand, and cash effective tax rate, that is, corporation tax payment as dependent variables on the other hand. The results show that there happens the accrual-based earnings management in the corporation with low corporation tax payment when real-based earnings management is controlled and that it has nothing to do with real-based earnings management when it increases corporation tax payment or controls other management components. It also shows that corporation tax refund happens in the corporation with big corporation tax payment and that decrease of earnings management through corporation tax refund reduces corporation tax payment when there is accrual-based earnings management. It finally shows that there are the effect of improving earnings caused by corporation tax refund and increase of corporation tax payment in the case of real-based earnings management. This study, nevertheless, has been limited by these two factors: first, the insufficiency of precedent study discourages me to develop more delicate theoretical backgrounds. Second, the investigation on the information effects only in the years when corporation tax refund and additional corporation tax payments happen cannot secure the persistence of information.

이익감소회피 이익조정 탐지를 위한 회계이익ㆍ과세소득 차이 변수의 유용성

정미화,이윤원,노현섭 한국회계정보학회 2008 회계정보연구 Vol.26 No.4

Since GAAP provides managers accounting discretion more than tax law does, they have a tendency to increase accounting earnings without influencing taxable income. Due to this type of manager's discretion, the temporary difference between accounting earnings and taxable income(book-tax difference) comes out. In general, temporary difference is mainly the result of managers' discretion to increase earnings and it can be used as a proxy for earning management. Out of temporary differences, deferred tax liability is shown when accounting earnings are greater than taxable income due to temporary difference to be added in future periods and can be used to manage earnings. This study investigates the usefulness of book-tax difference measures on detecting earnings management to avoid an earning decline and their incremental effect in addition to accrual measures. In this paper book-tax difference(BTD), temporary difference(TD), deferred tax liability(DTL), changes in net deferred tax liability(NDTL: changes in deferred tax liability minus changes in deferred tax asset), and deferred tax expense(DTE: changes in deferred tax expense via temporary difference in disclosure) are defined as proxies for earnings management. Earnings management companies are decided by the methodology used in Burgstahler and Dichev(1997). This study analyzes the usefulness of book-tax difference and accrual measures on detecting earnings management by comparing a group of earnings management companies with a control group of companies. The result shows that both accrual measures and book-tax difference measures are useful on detecting earnings management. Additional analysis of a binary logistic regression is processed to check the incremental effect of book-tax difference measures to accrual measures on detecting earnings management. Test result shows that in earnings change dimension DTL, BDT, NDTL, and DTE are significant in the order listed. 일반적으로 인정된 회계원칙은 세법에 비해 경영자가 선택가능한 회계처리의 재량을 더 많이 허용하고 있으므로 경영자는 이를 이용하여 당기 과세소득에 영향을 미치지 않고 회계이익을 증가시키는 이익조정을 하게 된다. 이 경우 회계이익과 과세소득간의 차이가 발생하며, 이러한 차이 중 일시적 차이는 이익을 상향관리하기 위한 경영자의 재량권 행사로 인해 발생되는 경향이 있어 이익조정의 대용치로 사용될 수 있다. 또한, 일시적 차이 중 이연법인세부채는 미래에 가산할 일시적 차이로 회계이익이 과세소득보다 클 때 발생하므로 이익조정의 대용치로 사용될 수 있다. 본 연구의 목적은 회계이익과 과세소득 차이 변수가 이익감소회피 보고목적의 이익조정을 탐지하는데 유용하며, 발생액 관련변수에 대해 추가적인 유용성을 갖는지 여부를 분석하는 것이다. 본 연구에서는 회계이익과 과세소득의 차이, 일시적 차이, 이연법인세부채, 순이연법인세부채의 변동(이연법인세부채 변동에서 이연법인세자산 변동을 차감한 금액), 이연법인세비용(주석에 공시되는 일시적 차이로 인한 이연법인세 변동액)을 이익조정의 대용치로 정의하였다. 분석방법은 Burgstahler and Dichev(1997)의 방법론에 따라 이익조정 여부를 판단하였다. 먼저, 회계이익과 과세소득의 차이 관련변수와 발생액 관련변수가 이익조정탐지에 유용한지 여부를 이익조정기업과 통제기업의 두 집단간 차이분석을 통하여 분석하였다. 분석결과 발생액 관련변수와 회계이익과 과세소득 차이 관련변수가 이익조정을 탐지하는데 있어 유용한 변수로 나타났다. 다음으로 이분형 로지스틱 회귀분석을 통해 회계이익과 과세소득 차이 관련변수가 발생액 관련변수에 대해 증분적인 유용성이 있는지 여부를 분석하였다. 회귀분석 결과 이익변동 변수를 사용한 분석에서는 이연법인세부채, 회계이익과 과세소득의 차이, 순이연법인세부채의 변동, 이연법인세비용의 변동 순으로 유의적이었다.

세무상 이월결손금과 이익조정에 관한 연구

전규안 ( Kyu An Jeon ),박종일 ( Jong Il Park ) 한국회계학회 2008 회계학연구 Vol.33 No.4

본 연구는 세무상 이월결손금이 있는 기업들의 이익조정 행태를 알아보았다. 세무상 이월결손금이 있는 기업은 조세비용에 대한 부담이 적으므로 보고이익을 증가시켜 보고할 유인이 존재한다. 또한 세무상 이월결손금이 있는 기업은 과세표준 계산시 각사업연도소득금액에서 이월결손금을 공제한 후에도 여전히 공제받지 못한 이월결손금이 남아 있을 경우 이에 대해 미래 과세소득의 발생이 예상되면 이연법인세자산을 인식함으로써 당기의 법인세비용을 감소시킬 수 있다. 이러한 기업은 이월결손금의 법인세효과를 이연법인세자산으로 인식함으로써 보고이익을 조정할 여지가 존재할 수 있다. 따라서 본 연구는 이러한 이월결손금과 관련된 여러 가지 실증적 의문사항에 관해 실증분석을 하였다. 본 연구의 분석기간은 1999년부터 2002년까지이다. 본 연구의 분석결과는 다음과 같이 요약될 수 있다. 첫째, 과세표준 계산시 세무상 이월결손금을 공제받은 기업은 그렇지 않은 기업에 비하여 이익을 상향조정하는 것으로 나타났으며, 또한 공제받은 세무상 이월결손금의 금액이 클수록 보고이익을 더 상향조정하는 것으로 나타났다. 둘째, 세무상 이월결손금이 있는 기업이 이월결손금으로 인한 법인세효과를 이연법인세자산으로 인식한 기업과 그렇지 않은 기업 사이의 이익조정 행위에는 별다른 차이가 없었다. 셋째, 이월결손금으로 인한 법인세효과를 이연법인세자산으로 인식한 기업들은 그렇지 않은 기업들보다 이익의 지속성이 더 높게 나타났다. 본 연구는 이월결손금 관련 기업의 이익조정에 관한 사항을 체계적으로 알아보았다는 점에서 의의가 있다. 특히 세무상 이월결손금이 있는 기업은 보고이익을 상향조정한다는 실증적 증거를 보여주었다. 또한 본 연구는 이월결손금의 법인세효과와 관련해서 현행 기업회계기준서에 경영자의 주관적인 판단이 부여되었음에도 불구하고 자본시장의 투자자들의 일반적인 인식과는 달리 경영자는 이러한 규정을 이용하여 기업의 보고이익을 증가시키는 방향으로 이익조정을 수행하지는 않는다는 실증연구결과를 제시하고 있다. This paper investigates the relation between tax net operating loss(here after, ``tax NOL``) carryforwards and earnings management. Tax NOL means amount of deficits carried forward for the previous 5 years which were not previously deducted or were not previously carried back. The basis for corporation tax on the income of a domestic corporation for each business year shall be the income for each business year remaining after the successive deductions of tax NOL, non-taxable income in accordance with the Corporation Tax Law and other relevant laws, and deductible income in accordance with the Corporation Tax Law and other related laws. We focus on tax NOL carryforwards and earnings management. Tax NOL carryforwards is related to tax costs and earnings management is related to nontax costs. The firms with tax NOL are inclined to increase financial book income because the basis for corporation tax is low if they deduct tax NOL carryforwards(i.e. low tax costs). Generally, firms want to decrease both tax costs and nontax costs(i.e. firms want to minimize all costs) and do effective tax planning(Scholes et al. 2008). Because of trade-off tax costs and nontax costs, firms don`t decrease both tax costs and nontax costs. But the firms with tax NOL have incentive to increase financial reporting income and decrease taxable income(i.e., tax costs), because they don`t have or a little trade-off tax costs and nontax costs. The firms with tax NOL can decrease current tax expense by recording deferred tax assets from tax NOL carryforwards and decreased current tax expense can result in increasing net income. Because current tax expense is one of the last accounts closed prior to earnings announcements, earnings management by current tax expense(i.e. deferred tax assets) are the last-chance earning managements. Firms have to record deferred tax liabilities and don`t consider realizability of deferred tax liabilities. But when firms record deferred tax assets, they consider the realizability of deferred tax assets. The realizability of deferred tax assets is not easy to estimate and we think that management has discretion whether they recognize deferred tax assets. Tax NOL carryforwards is one of the items for recognizing deferred tax assets. The sample consists of non-banking firms (1,792 firm-years) with a December fiscal year-end listed on the Korean Stock Exchange over 1999-2002. The data on tax NOL is collected from the DART(Data Analysis, Retrieval and Transfer System) of Financial Supervisory Service. Other firm-specific financial data is collected from KIS-FAS and TS2000 database. Empirical results are as follows. We provide robust evidence that the firms with deductions of tax NOL increase financial income than the other firms and the more deductions of tax NOL the more increasing financial income. We also find that the firms with deferred tax assets from NOL carryforwards are similar to the firms without deferred tax assets from tax NOL carryforwards in earnings managements among the firms with tax NOL. Finally, the firms with deferred tax assets from tax NOL carryforwards are more persistent earnings than the other firms. Empirical results suggest that the firms with deductions of tax NOL tend to increase financial income than the other firms. These firms are lower tax costs and don`t have or a little trade-off tax costs and nontax costs. This result implies that management tend to manage earnings when firms have tax NOL and financial statements users keep a very close watch the firms that have tax NOL. The management has discretion whether they record deferred tax assets from tax NOL carryforwards. But empirical results suggest that management don`t manage earnings by recognizing deferred tax assets. This implies that management don`t intend to manage earnings using discretion of judgement on the realizability of deferred tax assets. The earnings persistence of firms with deferred tax assets from tax NOL carryforwards is higher than the other firms. This implies that the quality of earnings of firms with deferred tax assets from tax NOL carryforwards is better than firms without deferred tax assets from tax NOL carryforwards. This means that the quality of earnings of firms with deferred tax assets from tax NOL carryforwards is better because the judgement on the realizability of deferred tax assets of firms with deferred tax assets from tax NOL carryforwards is adequate or firms don`t manage earnings by recognizing deferred tax assets. Previous studies focused on market reaction on the realizability of deferred tax assets, but this study examines the relation between judgement on the realizability of deferred tax assets and earnings management(i.e. focus on not shareholders but managers). Our findings contribute to the evidence that the firms with deductions of tax NOL manage earnings to increase financial net income, and don`t manage earnings using deferred tax assets from tax NOL carryforwards, and firms with deferred tax assets from tax NOL carryforwards are better earnings persistence(i.e. better quality of earnings). Our results are based on hand-collected data in DART. Evidences of this study are useful to financial statements users and policymakers because tax NOL carryforwards has been used for earnings management.

기업의 이익조정 유형과 조세회피: 적자회피 기업과 Big bath 기업을 중심으로

김진태,배종일,심충진 한국기업경영학회 2013 기업경영연구 Vol.20 No.2

The purposes of this study are to verify the influence on tax avoidance according to the types of earnings management with manufacturing listed company. This study started in the view point of total cost saving strategy will be performed by the CEO. Company’s total costs are consist of tax cost and non-tax cost and CEO will consider which kind of cost is more powerful in the total cost saving. Thus we focused on the types of earnings management will affect the tendency and the amount of tax avoidance. More specific, loss avoidance company with larger size earnings management has higher possibility to accept much more pay tax cost compare to loss avoidance company with comparatively smaller size earnings management. Because the company intend to manipulate large amount of earnings has to pay more tax cost in the result of increase of taxable income. Also Big bath company reports minimized current year net income by using possible cost and expense which will realize after next yeat normally in order to realize maximum earnings in the next year. Minimized current year net income of Big bath company makes lower or minimized tax cost. But because Big bath company is not loss avoidance company or loss taking company, we expect that Big bath company has different level of tax paying tendency. Therefore we would like to confirm the influence on tax avoidance in accordance with the size of earnings management of Big bath company. To see the purposes, we estimated non-discretional net income (NDNI) by using discretional accrual (DA) and performance matched discretional accrual (PMDA) in accordance with adjusted Jones model. In addition, to acquire the robustness of this study we adopted the method used in the study of Dechow et al. (1995) and Kothari et al. (2005) in order to estimate non-discretional net income (NDNI). Also we used Desia and Dharmapala (2006) model to estimate tax avoidance which is most popular method in the prior studies. And we have done empirical analysis by using loss avoidance group and Big bath group classified in the basis of mark and size of non-discretional net income (NDNI) and net income (NI). The results of this study are follows. First, company with the larger loss avoidance size has the less tax size. In other words, the CEO intend to achieve net income instead of net loss for the purpose of loss avoidance will be take more burden of tax increase. Because CEO with the company like that would accept tax increase for the decrease of non-tax expense and personal motivation. The increasing of usefulness from loss avoidance is larger than the decreasing of usefulness from further tax paying, CEO will pay more tax for loss avoidance. Second, with the study of Big bath company between the size of earnings management and the size of tax avoidance, the size of earnings management makes positive (+) effect to the size of tax avoidance. This result says that CEO with the Big bath company is willing to minimize tax payment through active tax avoidance strategy. The results of this study in the two types of company loss avoidance and Big bath are contrary to each other. This means that the purposes of earnings management make influence on the attitude of tax avoidance. The company intend to avoid net loss is willing to pay the tax regardless of amount but Big bath company is not to pay the tax. Because the purpose of earnings management of Big bath company is to minimize the reporting earnings without further tax paying. This study has contribution in the field of relationship between earnings management and tax avoidance by using the types of earnings management such as loss avoidance and Big bath. 본 연구는 국내 상장 제조기업을 대상으로 기업의 이익조정 유형이 조세회피에 어떠한 영향을 미치는지 분석하였다. 또한 이익조정 유형을 구분하는데 있어 이익조정 유형의 구분에 대한 강건성을 확보하기 위하여 수정 Jones 모형에 의한 재량적 발생액과 성과대응 재량적 발생액을 이용하여 비재량적 이익(NDNI)을 추정하고, 이러한 비재량적 이익(NDNI)과 보고이익(NI)의 부호 및 크기를 바탕으로 적자회피 기업과 Big bath 기업으로 이익조정 유형을 각각 구분하여 실증분석을 실시하였다. 2012년 상장 제조기업 중 12월 결산법인을 대상으로 하고, 검증기간을 2005년부터 2010년까지로 한 분석결과는 다음과 같다. 첫째, 적자회피의 규모가 큰 기업일수록 조세회피를 적게 하는 것으로 나타났다. 즉, 적자회피를 위해 이익조정 규모를 크게 해야 하는 경영자는 조세부담보다는 적자보고를 회피하고자 하는 유인이 높기 때문에 적극적으로 조세부담을 하고자 하는 것으로 나타났다. 둘째, Big bath 기업의 이익조정 규모에 따른 조세회피를 검증한 연구결과에서 기업의 이익조정 규모는 조세회피에 양(+)의 영향을 미치고 있는 것으로 나타났다. 이는 Big bath 기업의 경영자가 적극적인 조세회피를 통해 조세부담을 최소화하고 있다는 것을 의미한다. 이와 같은 본 연구의 결과는 기업의 이익조정 유형(적자회피, Big bath)에 따라 경영자에 의한 조세회피 행위가 달라질 수 있다는 것을 의미한다고 볼 수 있다. 더불어 본 연구는 기업의 이익조정 행위가 조세회피에 어떠한 영향을 미치는지 분석하는데 있어 기업의 이익조정 행위를 기존 선행연구 보다 세분화하여 실증분석 하였다는데 그 공헌점이 있다.

Meaning and Basis of Judgment on “Place of Effective Management” under the Corporate Income Tax Law of Korea: Judgment of January 14, 2016, 2014Du8896, Supreme Court of Korea

백제흠 서울대학교 아시아태평양법연구소 2018 Journal of Korean Law Vol.17 No.2

Previously, the Korean Corporate Income Tax Law considered the head office location as a standard for determination of a domestic corporation. While it additionally introduced the concept of place of effective management in 2005, its relationship with the existing determination standard, that is, location of head office, as well as definition and relevant standards were not clearly defined. Once a foreign corporation is treated as a domestic corporation, it faces a significant tax effect as it bears, among others, unlimited tax liability toward the domestic tax authorities. Place of effective management is a general concept which has great influence on the status of taxpayers under taw laws and may result in serious infringement of predictability and legal stability of international investments. Since the definition of place of effective management is too broad, it needs to be narrowly interpreted. In order to derive a reasonable interpretation of the definition and judgment standard regarding place of effective management, it is necessary to conduct a comparative analysis by reviewing i) Discussions of the Organization for Economic Cooperation and Development (the “OECD”) on the concept of “place of effective management” under tax treaties, which is the origin of the term, ii) relevant legislation of other countries, and ii) the permanent establishment taxation (the “PE taxation) and controlled foreign corporation taxation (the “CFC taxation”), which are directly related to the new standard under the domestic tax laws for both inbound and outbound transactions. First, in relation to the concept of place of effective management under tax treaties, the factors used to determine the residency of dual resident entities, that is, intent or purpose of tax avoidance, may be considered to restrict the applicable scope of the principle of place of effective management. Further, based on the fact that the place of effective management principle has a more severe tax effect than PE taxation and CFC taxation, the requirements for PE taxation and CFC taxation shall also be fulfilled for inbound transactions and outbound transactions. Therefore, in order to apply the place of effective management principle, a tax evasion purpose needs to exist, and there must be additional and important circumstances in addition to the requirements for PE taxation and CFC taxation. Recently, the Supreme Court rendered that the place of effective management refers to a location where key management and commercial decisions necessary for business operations are implemented, and factors such as the location where meeting of the board of directors is held, location where the chief executive officer performs, etc. shall be taken into account. In particular, with regard to a foreign corporation’s transfer of residence to Korea, the ruling is significant in that it imposed a strict standard by requiring discontinuance of relevancy with the previous place of effective management. This, while not being explicit, conforms with the discussions in this study to the effect that the place of effective management principle shall be deemed as a restrictive concept which supplements the head office location standard. Previously, the Korean Corporate Income Tax Law considered the head office location as a standard for determination of a domestic corporation. While it additionally introduced the concept of place of effective management in 2005, its relationship with the existing determination standard, that is, location of head office, as well as definition and relevant standards were not clearly defined. Once a foreign corporation is treated as a domestic corporation, it faces a significant tax effect as it bears, among others, unlimited tax liability toward the domestic tax authorities. Place of effective management is a general concept which has great influence on the status of taxpayers under taw laws and may result in serious infringement of predictability and legal stability of international investments. Since the definition of place of effective management is too broad, it needs to be narrowly interpreted. In order to derive a reasonable interpretation of the definition and judgment standard regarding place of effective management, it is necessary to conduct a comparative analysis by reviewing i) Discussions of the Organization for Economic Cooperation and Development (the “OECD”) on the concept of “place of effective management” under tax treaties, which is the origin of the term, ii) relevant legislation of other countries, and ii) the permanent establishment taxation (the “PE taxation) and controlled foreign corporation taxation (the “CFC taxation”), which are directly related to the new standard under the domestic tax laws for both inbound and outbound transactions. First, in relation to the concept of place of effective management under tax treaties, the factors used to determine the residency of dual resident entities, that is, intent or purpose of tax avoidance, may be considered to restrict the applicable scope of the principle of place of effective management. Further, based on the fact that the place of effective management principle has a more severe tax effect than PE taxation and CFC taxation, the requirements for PE taxation and CFC taxation shall also be fulfilled for inbound transactions and outbound transactions. Therefore, in order to apply the place of effective management principle, a tax evasion purpose needs to exist, and there must be additional and important circumstances in addition to the requirements for PE taxation and CFC taxation. Recently, the Supreme Court rendered that the place of effective management refers to a location where key management and commercial decisions necessary for business operations are implemented, and factors such as the location where meeting of the board of directors is held, location where the chief executive officer performs, etc. shall be taken into account. In particular, with regard to a foreign corporation’s transfer of residence to Korea, the ruling is significant in that it imposed a strict standard by requiring discontinuance of relevancy with the previous place of effective management. This, while not being explicit, conforms with the discussions in this study to the effect that the place of effective management principle shall be deemed as a restrictive concept which supplements the head office location standard.

Meaning and Basis of Judgment on “Place of Effective Management” under the Corporate Income Tax Law of Korea: Judgment of January 14, 2016, 2014Du8896, Supreme Court of Korea

( Je-heum Baik ) 서울대학교 법학연구소 2018 Journal of Korean Law Vol.17 No.2

Previously, the Korean Corporate Income Tax Law considered the head office location as a standard for determination of a domestic corporation. While it additionally introduced the concept of place of effective management in 2005, its relationship with the existing determination standard, that is, location of head office, as well as definition and relevant standards were not clearly defined. Once a foreign corporation is treated as a domestic corporation, it faces a significant tax effect as it bears, among others, unlimited tax liability toward the domestic tax authorities. Place of effective management is a general concept which has great influence on the status of taxpayers under taw laws and may result in serious infringement of predictability and legal stability of international investments. Since the definition of place of effective management is too broad, it needs to be narrowly interpreted. In order to derive a reasonable interpretation of the definition and judgment standard regarding place of effective management, it is necessary to conduct a comparative analysis by reviewing i) Discussions of the Organization for Economic Cooperation and Development (the “OECD”) on the concept of “place of effective management” under tax treaties, which is the origin of the term, ii) relevant legislation of other countries, and ii) the permanent establishment taxation (the “PE taxation) and controlled foreign corporation taxation (the “CFC taxation”), which are directly related to the new standard under the domestic tax laws for both inbound and outbound transactions. First, in relation to the concept of place of effective management under tax treaties, the factors used to determine the residency of dual resident entities, that is, intent or purpose of tax avoidance, may be considered to restrict the applicable scope of the principle of place of effective management. Further, based on the fact that the place of effective management principle has a more severe tax effect than PE taxation and CFC taxation, the requirements for PE taxation and CFC taxation shall also be fulfilled for inbound transactions and outbound transactions. Therefore, in order to apply the place of effective management principle, a tax evasion purpose needs to exist, and there must be additional and important circumstances in addition to the requirements for PE taxation and CFC taxation. Recently, the Supreme Court rendered that the place of effective management refers to a location where key management and commercial decisions necessary for business operations are implemented, and factors such as the location where meeting of the board of directors is held, location where the chief executive officer performs, etc. shall be taken into account. In particular, with regard to a foreign corporation’s transfer of residence to Korea, the ruling is significant in that it imposed a strict standard by requiring discontinuance of relevancy with the previous place of effective management. This, while not being explicit, conforms with the discussions in this study to the effect that the place of effective management principle shall be deemed as a restrictive concept which supplements the head office location standard.