An Empirical Study On The Effect Of Managerial Powers On Corporate Tax Planning

As a decision maker, managers’ behavior and personal characteristics will affect the enterprise’s tax planning decisions. How much power the managers have, determines the degree of influence on the management of corporate tax decisions. Tax planning activities lack of transparency and is easy to hide, to a certain extent, it induces manager to pursue their own interests at the expense of business interests.According to the current situation of tax planning for domestic enterprises, this paper selects 2807 annual data of Chinese listing Corporation in 2010-2014 as a research sample, and empirically studies the influence of managerial power on enterprise tax planning and effectiveness. O n the basis of the relevant literatures, the paper establishes the regression model of the power of management and the degree of enterprise tax planning, to study the management of power and power dimensions on the impact of corporate tax planning. Relying on the value regression model, adding the cross variables of manager’s power and tax planning, in order to study the influence of manager’s power on the efficiency of tax pla nning. Further research carried out the sample in groups according to the nature of the enterprise and the market environment to find the difference between two groups.Empirical results show that:(1) The management power has a significant positive effec t on tax planning. In the dimensions of managerial power, the reputation power of managers and tax planning is a significant positive correlation. The expert power has a significant positive correlation with tax planning. The structural power of managers promotes tax planning decision. The relationship between ownership power and tax planning is in U shape, that is, with the increase in the proportion of management ownership, corporate tax planning firstly reduces and then rises.(2) The power of managers has a negative effect on the efficiency of enterprise tax planning, there is the management of the power of rent-seeking effect. The enhancement of the power of the manager can restrain the enterprise tax planning to promote the enterprise value. The strengthening of structure power and prestige power will weaken the positive effect of enterprise tax planning. The expert power on tax planning for enterprise value promotion effect is not significant, the expansion of ownership power will enhance the positive effect of enterprise tax planning behavior on enterprise value promotion.(3) Compared with the state-owned samples, the increase of the managerial power in the non-state- owned enterprises is stronger than that of the state- owned enterprises.(4) The better market environment, the increase in the power of managers to promote the role of enterprise tax planning stronger.According to the empirical results, this paper argues that the enhancement of managerial power contribute to the opportunism behavio r through tax planning activities, which indicates the necessary power restriction policy of management layer would to some extent improve the efficiency of company’s tax planning, and relevant policy recommendations were put forward summarily based on.