...EXPLORATORY STUDY OF MALAYSIAN TAX PRACTITIONERS’ PERCEPTION ON THE PRACTICE OF AGGRESSIVE TAX AVOIDANCE Nur Fikhriah Binti Takril, and Sri Wahyu Sakina Ahmad Sanusi Depertment of Accounting Faculty of Management and Muamalah Kolej Universiti Islam Antarabangsa Selangor nurfikhriah@kuis.edu.my, sriwahyu@kuis.edu.my ABSTRACT Malaysian tax research has put little attention on the tax morale of Malaysian tax environment. Therefore, the objective of this study is to explore the perception of Malaysian tax practitioners in giving tax advice to tax clients whether to promote aggressive tax avoidance or to promote tax compliance. It is accordance to the implementation of SAS which had given taxpayers freedom to declare their income and compute their own tax liability. This self-determination in tax assessment had given them the opportunity to manipulate the tax account which resulted to lower or minimum tax paid. Aggressive tax avoidance is a non-compliance behavior by exploiting tax law ambiguity, playing with accounting figures and transactions to reduce tax. Moreover, the SAS had increases the demand of tax practitioners services as most taxpayers especially from the corporate sector feel incompetence and unqualified to file their own tax affairs appropriately. A survey approach is used to obtain information from tax practitioners practicing in public accounting firms in urban towns. Tax practitioners who perceived leniently on the practice of aggressive tax avoidance signify a likelihood...
Words: 3145 - Pages: 13
...FOLLOWING SOURCE): Type report Title Tax evasion and the source of income : an experimental study in Albania and the Netherlands Author(s) K. Gërxhani, A. Schram Faculty UvA: Universiteitsbibliotheek Year 2003 FULL BIBLIOGRAPHIC DETAILS: http://hdl.handle.net/11245/1.427430 Copyright It is not permitted to download or to forward/distribute the text or part of it without the consent of the author(s) and/or copyright holder(s), other than for strictly personal, individual use, unless the work is under an open content licence (like Creative Commons). UvA-DARE is a service provided by the library of the University of Amsterdam (http://dare.uva.nl) (pagedate: 2014-11-27)TAX EVASION AND THE SOURCE OF INCOME: AN EXPERIMENTAL STUDY IN ALBANIA AND THE NETHERLANDS AIAS Working Paper 03/11 May 2003 Dr. Klarita Gërxhani AMSTERDAM INSTITUTE FOR Prof. Dr. Arthur Schram ADVANCED LABOUR STUDIES Universiteit van Amsterdam © Klarita Gërxhani Amsterdam, May 2003 This paper can be downloaded at www.uva-aias.net/files/aias/WP11.pdf Amsterdam Institute for Advanced Labour Studies Tax Evasion and the Source of Income: An Experimental Study in Albania and the Netherlands 5 Tax Evasion and the Source of Income: An Experimental Study in Albania and the Netherlands∗ Abstract A series of experiments among different social groups in both Albania and the Netherlands give the opportunity to compare behavioral patterns related to tax evasion. Aside from the decision whether or...
Words: 15662 - Pages: 63
...issue of Tax evasion in Ireland and around the world has significantly increased in the last few years. The downturn in the Irish economy along with pressures from some of our major international trading partners(European Union, International Monetary board and US) has increased the pressure on the Irish government to strengthen its revenue arm and try and recover millions of euro that it has lost through tax evasion and corruption. The loss of this revenue to the exchequer has serious affects on the Irish economy and limits the money that could be spend on education, infrastructure, public health and Social Welfare to name a few. Tax avoidance and tax evasion often get confused with one another and are often considered to mean the same. Tax avoidance is defined as the lawful minimization of tax liability through sound financial planning techniques such as phasing the sale of assets over a period long enough to effect maximum exemption from capital gains tax while tax evasion is defined as the unlawful attempt to minimize tax liability through fraudulent techniques to circumvent or frustrate tax laws, such as deliberate under-statement of taxable income or wilful non-payment of due taxes . While Tax avoidance is legal, tax evasion is an offense and is punishable by both civil and criminal penalties. “The public’s attitude to tax evasion has also changed and so too has the attitude of the courts. It is no longer enough to admit a serious revenue offence and simply refund...
Words: 481 - Pages: 2
...Tax Evasion In fact, for Amazon the transfers of profits, tax avoidance or even tax evasion are common practices in their multinational operations. The bigger the company is, the more overseas set point, it will use more ways to tax evasion. For exemple, for the companies, R & D base and branch offices are throughout the world and that help them to implement easily tax evasion. On the other hand, some countries and regions also specifically set up some duty-free zone, introduced a number of policies to attract multinational companies to settle, in order to create jobs and increase revenue. An other point is corporate tax rate: in UK it’s reaching 24% and it’s even more in France (more than 33%); this is also a reason for Amazon to do tax evasion. In the wake of the financial crisis, the governments are more concerned about the phenomenon of tax evasion, hoping to block the loopholes. For exemple, the PIC of British parliamentary public accounts committee, Ms. Hodge pointed out that the citizen complain that tax evasion is unfair, especially under the current economic situation. We can understand that tax issue with Amazon make them save a lot of money but in the same time it’s creat a bad reputation with some customer who are asked to pay more and more tax every years. Financial circles also have views on this phenomenon. They think current system has been unable to act as a restraint on the company for the tax issue, and it almost became a voluntary tax. They suggest...
Words: 370 - Pages: 2
...“TAX EVASION & AVOIDANCE - A REAL PROBLEM FOR BANGLADESH” INTRODUCTION: Tax evasion and avoidance are both phenomena that are probably as old as taxation itself. Wherever and whenever authorities decide to levy taxes, individuals and firms try to avoid paying them. Though this problem has always been present, it becomes more pressing in the course of globalization as this process extends the range of opportunities to dodge taxation while simultaneously reducing the risk of being detected. Developing and emerging countries like Bangladesh are particularly vulnerable to tax evasion and avoidance activities of individual taxpayers and corporations. While tax revenues in OECD-countries are almost 35 per cent of GDP ,in case of Bangladesh it is only around 10%.This can be considered one of the primary reasons for large differences in the ability to mobilize own resources between developed and developing countries. Tax evasion and tax avoidance is a great problem in our country. In Bangladesh there are many individual taxpayers and corporations who are evading or avoiding tax. As a result government’s developments activities are hampered. So, we should know about the tax evasion and tax avoidance and thereby its preventives measures. For development of a country government needs to create infrastructure and invest in various sectors. For this activities government needs founds and tax revenue is the main source for the purpose. But due to tax evasion and tax avoidance government’s...
Words: 5263 - Pages: 22
...Arm of the United States Government in its Battle against Tax Evaders Professor: Kenneth Lavery Submitted By: Deanne Patterson Week 6: July 31, 2011 Taxes are a major contributor of the American economy. The tax system in the United States depends on voluntary compliance, which means that each citizen is responsible for filing a tax return when required and for determining and paying the correct amount of tax”. (Albrect, Albrect, Albrect & Albrect and Zimbelman). When individuals under report, exaggerate deductions, and hide money in off shore accounts, this is clearly misrepresentation of their income to the Internal Revenue Service (IRS) and is deemed tax evasion. The term “tax evasion” is defined as using illegal means to avoid paying taxes. The U. S. Government loses billions of dollars every year because of tax evasion. Wealthy individuals have engaged in hiding their earning in offshore accounts. This student believes that it is necessary for the United States to continue to monitor and implement laws to improve financial transparency globally in order to curtail tax evasion in addition, the integrity of the federal income tax system continues to be tested by individuals and entities in their attempts to defraud the United States Government. The United States Treasury, IRS, and Congress took a long hard look at the global financial system and determined that UBS, the Swiss bank giant sold tax evasion services to those who did not want to pay their taxes (http:...
Words: 1825 - Pages: 8
...Companies such as Apple are renowned for their ground-breaking technological innovations. They have also put a great deal of effort into reducing the amount of tax they pay on the mountains of cash those innovations produce. Currently apple’s profit is 34 billion dollars but through corporate tax loopholes they have been able to pay their taxes at a 9.8% rate instead of the usual 35% in 2011. That is the topic of our project: ‘How the World's Biggest Company Also Became the Most Unethical.’ When we discovered this information in our research we were intrigued by it. The questions of how apple has been able to do this and what effect it has on the economy and the American government started to rise among us. This is when we decided that this would be the subject we would chose to research and present for the rest of the semester. Now … will tell you some more about how this research was conducted. We started searching through news articles on different economic websites like CNN money, Harvard business review, Forbes and a few others. We looking predominantly at the most popular articles of that day and started researching more information on the ones that interested us. We eventually found three finalist which were ‘starbucks venti-stocks at an all-time high’, ‘facebook is overvalued at 100 billion dollars’ and ‘Apples tax avoidance.’ After deciding on these finalist we started a small discussion about which one would be the best choice. We quickly realised apple was the topic...
Words: 362 - Pages: 2
...“TAX EVASION & AVOIDANCE - A REAL PROBLEM FOR BANGLADESH” INTRODUCTION: Tax evasion and avoidance are both phenomena that are probably as old as taxation itself. Wherever and whenever authorities decide to levy taxes, individuals and firms try to avoid paying them. Though this problem has always been present, it becomes more pressing in the course of globalization as this process extends the range of opportunities to dodge taxation while simultaneously reducing the risk of being detected. Developing and emerging countries like Bangladesh are particularly vulnerable to tax evasion and avoidance activities of individual taxpayers and corporations. While tax revenues in OECD-countries are almost 35 per cent of GDP ,in case of Bangladesh it is only around 10%.This can be considered one of the primary reasons for large differences in the ability to mobilize own resources between developed and developing countries. Tax evasion and tax avoidance is a great problem in our country. In Bangladesh there are many individual taxpayers and corporations who are evading or avoiding tax. As a result government’s developments activities are hampered. So, we should know about the tax evasion and tax avoidance and thereby its preventives measures. For development of a country government needs to create infrastructure and invest in various sectors. For this activities government needs founds and tax revenue is the main source for the purpose. But due to tax evasion and tax avoidance government’s...
Words: 5263 - Pages: 22
... No. 2 Causes of Tax Evasion in Pakistan: A case study on southern Punjab Waseem Ahmad Khan (Corresponding author) Lecturer, Department of Management Sciences, The Islamia University of Bahawalpur, Pakistan E-mail: waseemkhan_hcbf@yahoo.com, Tel: +92-333-3133540 Prince Fawad Ahmad Student, Department of Management Sciences, The Islamia University of Bahawalpur, Pakistan Accepted: October 15, 2014 DOI:10.5296/ ijafr.v4i2.6484 URL: http://dx.doi.org/10.5296/ ijafr.v4i2.6484 Abstract Introduction: Tax evasion is main problem in Pakistan due to which Pakistan remains under a lot of stress. Tax evasion results in less revenue. Many causes have been discussed which play major role in tax evasion in Pakistan. It is a primary research. Literature review: Many authors have discussed impacts of tax evasion in different sectors of economy. Previously tax evasion cause major trouble in Tanzania & Greece. Methodology: A questioner has been filled by targeted population of 100 Professionals & Business students of Department of Management Sciences Islamia University of Bahawalpur. Questioner was consisted of 5 major parts i.e. Tax System, High rate, Go with the flow, Corrupt Govt. & Progressive taxation. Findings: Most of the population agrees that these causes play a vital role in the tax evasion in the Pakistan. Conclusion: Tax evasion is main problem of Pakistan which needs to be eliminating by following the recommendations that tax system must base on...
Words: 5355 - Pages: 22
...9.0 METHOD TO CONTROL EVASION OF INCOME TAX IN THE MALAYSIAN LAW 9.1 Cultural and Moral Side Raise an ethical awareness of tax, by informing the taxpayers of the state's legitimacy right to impose the tax, the real need for this money, and that the tax burden is distributed between the taxpayers in justice, thus showing how payoff spent on them and their community, all that will reduce tax evasion. 9.2 Administrative Side Tax administration contribute to evasion (unintentionally), therefore must bear part of the responsibility, and should do the following: Tax management must coordinate with other administrative bodies in order to learn the various economic activities for income owners. Training staff and raise their efficiency....
Words: 866 - Pages: 4
...Research objectives The purpose of this thesis is to test whether Mauritius is truly a platform for tax evasion and to what extent the measures that are being taken by the Government to combat this bad publicity are effective. The specific objectives of this study are: To understand the purpose and functioning of treaty arrangements Mauritius has with other countries throughout the world. To test the effectiveness of the measures to combat tax evasion. To test the knowledge of employees in the global business sector. Research questions To what extent employees understand the tax regime for global companies? Based on their experience, how complicated do they perceive the tax regime to be? Do they believe that Mauritius is a tax...
Words: 1247 - Pages: 5
...Abstract Local governments in Bangladesh have several options at hand to finance their activities and pursue their fiscal policy. These options include the imposition of taxes and the generation of non-tax revenues through fees, levies, cost recovery and user charges, property and investment income, domestic and foreign borrowing, the sale of assets and domestic and foreign grants. Urban Local Governments (ULGs) in developing countries are in dire need of resources not only for investment to meet the increasing demand of growing urban population but also for maintenance of the existing services. But the resources of the municipal bodies are inadequate; infrastructures are in poor condition and services maintenance is neither enough nor would cover the new expansions. Inefficient governance of the municipal bodies is partly responsible for this. Holding tax plays an important role in own revenue of Pourashavas. About 35-45% revenue comes from holding tax. But in Bhairab Pourashava it contributes only 18-20%. Every year, its demands and collection are decreasing. Many factors are responsible for this. This study tries to find out the problems of holding tax collection and assessment. Pourashava requires to pay more attention to solve these problems. If the amount of holding tax is increased, this will help Pourashava gradually become self-financed. Introduction With the rapid urban growth all over the world, the demand for various services and facilities are increasing radically...
Words: 4087 - Pages: 17
...Introduction There are many key component of a case. Some of these things include the evidence, the witnesses and the expert witnesses. One of these expert witnesses includes the forensic accountant, which has become a common use within the courtroom. This paper will discuss the five most important skills that a forensic accountant needs to possess, the role of a forensic accountant within a courtroom environment, the legal responsibility a forensic accountant has while providing service to a business, and two cases where forensic accountant have provided vital evidence in a case. It will also summarize the accountant’s role during the cases. Five Most Important Skills The five most important skills a forensic accountant needs to possess are private investigator, research skills, analytical abilities, accounting and task manager. Private investigator skills are important because they have to be able to gather information about the case. They have to be able to provide hard facts about the case to prove that fraud is actually accruing within the company or towards the company. They also have to go undetected that way important things that can help a case will not be cover up nor erased. They also have to possess research skills. This way they can gather only the important facts that can help with the case because they do not want to enter evidence that can harm the case or that does not have any relevance to the case. Analytical abilities are essential because...
Words: 793 - Pages: 4
...The goal of tax planning is to minimize taxes is not a true statement. The goal of tax planning is t maximize the taxpayer's aftertax wealth while simultaneously achieving the taxpayers non-tax goals. 3. Timing strategy exploits the variation in taxation across time. Income shifting strategy exploits the variation in taxation across taxpayers. Conversion strategy exploits the variation in taxation across activities. 7. The factors that the benefits of accelerating deductions are higher tax rat, higher interest rats, larger transaction amounts, and the ability to accelerate deductions by two or more years. The factors the increase the benefits of deferring income are higher tax rates, higher rates, larger transaction amounts, and the ability to defer revenue recognition for longer periods of time. 10. If an investor can earn a positive return, $1 invested today should e worth $1.05 in one year, 17. Paying dividends is not an effective way to shift income from a corporation to is owners because corporations do not get a tax deduction for dividends paid, paying dividends is not an effective way to shift income. Paying dividends results in double taxation. 22. The constructive receipt doctrine limits income deferral for cash-method taxpayer. 24. Related party transactions receive more IRS scrutiny because each transacting party negotiates for his or her own benefits. 25. Business purpose doctrine allows the IRS to challenge and disallow business expenses for...
Words: 346 - Pages: 2
...a. Tax avoidance in Germany (Siddhart Medhi) A number of schemes exist in the tax system, which enables corporations to avoid taxes and some of these loopholes are perfectly legal. In 2009 the German newspaper, Der Spiegel, reported a scheme referred to as the Malta Loophole. It is quite simple and has been used by multinational corporations such as Lufthansa and Puma. It works by setting up a subsidiary in Malta and thus paying taxes to the Maltese state. The tax rate in Malta is 35% and is thus higher than in Germany, however, the shareholders can apply for a refund for most of the amount. The reason for this is that if profits are being distributed as dividends then the tax rate is only 5%. The scheme works in the following way: if the profit of the subsidiary is 100 million then 35 million is paid to the Maltese state where after the shareholders can get a refund of 30 million and return it to the German parent company. Returning the money from the shareholders is due to the German tax system 95% tax exempt. The effective tax rate is thus cut to merely 6.42% Another example of tax avoidance is when Volkswagen took full control of Porsche in 2012. Volkswagen at the time already owned 49,9% of the shares in Porsche and was interested in buying the remaining 51.1% in order to have full control and gain synergy effects worth €700 million a year (Bryant, 2012). The price of this was €4,5 billion, which would have to be taxed by €1,5 billion. However, they found a way around...
Words: 654 - Pages: 3
