Imputation tax system

Imputation tax system

Arrangement by which investors who receive a dividend also receive a tax credit for corporate taxes that the firm has paid.
References in periodicals archive ?
(2) Ashton (1989), and Monkhouse (1993, 1996,1997) developed and adjusted a capital asset pricing model (CAPM), weighted average cost of capital (WACC) and adjusted present value (APV) methodology under an imputation tax system. Officer (1994) demonstrated the importance of imputation credits in the valuation of companies.
Monkhouse PHL (1993) The cost of equity under Australian dividend imputation tax system. Accounting and Finance 33:1-18.
Monkhouse PHL (1996) The valuation of projects under the dividend imputation tax system. Accounting and Finance 36: 185-212.
The full imputation tax system is Malta`s general system of taxation, affecting all taxpayers, whether individuals, pensioners or corporate, the design of which has been in place since the very beginning in our country.
For example, ignoring personal taxes, Cooper and Nyborg (1999) show that the value of a levered firm in an imputation tax system equals
In a full imputation tax system, dividend recipients receive a tax credit for income taxed at the corporate level, which they can use to offset their personal tax liability.
The evidence that Australia, with an imputation tax system which favors dividends over capital gains, has a significantly higher dividend payout than Japan lends support to the influence of environment on dividend policy.
(iii) The imputation tax system confines imputation credits to dividends paid by resident companies directly or indirectly to resident individuals.
McDonald (2001) investigates ex-day behavior in Germany, where the dividend imputation tax system attached to most dividends a tax credit for corporate taxes (until this feature was repealed in late 2000).
Two tax systems are related to dividends in developed countries: the classical tax system as in Japan, and the imputation tax system as in Australia.
The imputation tax system allows the tax that is paid by a firm making qualifying distributions to be available to set against the tax that is paid by its shareholders.
States have developed a range of reforms, including imputation tax systems, an allowance for corporate equity or capital, shareholder allowances or credits within a corporate equity tax system, a comprehensive business tax system, or, alternately, a destination-based corporate cash-flow tax or and origin-based corporate cash-flow tax, all of which this report describes in detail, along with associated methodologies and standards.