The Impact Of Executive Equity Incentive On Tax Planning Behavior Of Listed Companies In China

Tax is not only the main source of our government's revenue,but also an important part of the listed company's costs.As a significant financial activity which run through the whole process of enterprises' establishment,management,investment and financing,tax planning is bound to affect the quality of the companies' performance.Therefore,the exploration and study about every possible influence factor of enterprise tax has always been a popular topic in the academic circle of accountancy.Under the modern corporation system,company's ownership and management are separated,senior managers become the enterprise's actual steerer,enterprise's tax planning behavior may deviate from the target of enterprise value maximization because of the benefit gambling between owners and managers.In order to alleviate the agency problem,the owners tend to draw up an management incentive plan to make sure that they have the same goals.So,whether the equity incentives will put an impact on the listed enterprises' tax planning behavior?What role will managers' overconfidence play in the tax planning?Whether the special ownership structure in china will affect the relevance between equity incentives and tax planning?From the perspective of the compensation incentive of executive,this paper analysis the effects equity incentives produce on enterprise tax planning behavior under the different nature of the ownership by establishing econometric regression model and using the data of the listed company of our country from 2011 to 2014,and then explore the role managers'overconfidence plays in financial decision-making by introduces the managers overconfidence as cross variables.Through the study we found that the executives' equity incentive has a significant positive effect on the tax planning of listed companies.Granting executives equity incentive can bring them interests of return which linked to the companies'after-tax profits,make the targets consistent between managements and shareholders,thus will take positive tax planning actions to maximize their personal equity profits.Although the equity incentive contracts may offer the managements rewards which links to company's profits,make the managements' goal consistent with the shareholders',the non-tax costs generate in the process of the tax planning may offset the benefits that tax planning brings.Compared with non-state-owned listed enterprises,the executives equity incentive in listed state-owned enterprises has more effect on the company's tax planning,and the influence that psychological characteristics of managers overconfidence makes on the relationship between equity incentives and tax planning is not significant.At the end of the paper,we provide reasonable suggestions for enterprises' legal tax planning activities and effective equity incentives according to the result of our empirical analysis,offer a new perspective to improve our supervision in tax revenue,and enrich the academic research in the tax-related field.