| dc.description.abstract | The amendment to the Income Tax Law of May 16, 2014 was passed by the Legislative Yuan on the third reading. Since January 1, 2015 under the integrated income tax system, the complete imputation system has been replaced by the partial imputation system and the tax credit reduction is halved, and the Individual Income Tax rate is increased by up to 45%. Because the company′s Profit-seeking Enterprise Income Tax rate is different from the Individual Income Tax rate, when the investor is allocated company dividends, he may have to bear a higher individual Income tax, or reduction of tax credits, is based on this, and the purpose of this study is to explore the impact of changes in the tax system that result in an increase in the tax burden on investors, and on the ex-dividend date stock price and investor trading behavior.
This paper takes a sample of listed companies in the 2014 and 2015. The study found that：
1. After the implementation of the halved tax credit reduction, expected price drop ratio will be lower than before the implementation of the halved tax credit reduction. In the empirical analysis, the supporting evidence cannot be found.
2. After the implementation of the halved tax credit reduction, the rate of return near the ex-dividend date was indeed lower than before the implementation of the halved tax credit reduction, which is in line with expectations.
3. After the implementation of the halved tax credit reduction, the trading volume near the ex-dividend date was indeed reduced than before the implementation of the halved tax credit reduction, which was also in line with expectations.
It shows that the halved tax credit reduction and the high tax rate is increased. Investors face different tax rates and the dividends the company issues to investors, investors will adjust their investment decisions in consideration of the tax burden. | en_US |