The Australian dividend imputation system and corporate tax avoidance

Xuerui (Estelle) Li, Alfred Tran

    Research output: Contribution to journalArticlepeer-review


    This study investigates whether and how the Australian dividend imputation system alleviates corporate tax avoidance by Australian listed companies. Based on a sample of profitable Australian listed companies across the period from 2009 to 2012, this study finds that companies distributing a higher proportion of their aftertax profits as franked dividends and companies with less foreign ownership engage in less corporate tax avoidance. No significant statistical association between foreign operations and corporate tax avoidance is found. Furthermore, this study finds that when an Australian listed company with partial foreign ownership pays more franked dividends to meet the demands of its Australian shareholders, it tends to engage in less corporate tax avoidance; and when an Australian company has foreign operations, it may shift foreign profits to Australia to enjoy greater benefits from the imputation system. This study contributes to the literature and political debate with regards to corporate tax avoidance by providing empirical evidence on the tax avoidancereducing effect of the dividend imputation system.
    Original languageEnglish
    Pages (from-to)357-399
    JournalAustralian Tax Forum
    Issue number2
    Publication statusPublished - 2019


    Dive into the research topics of 'The Australian dividend imputation system and corporate tax avoidance'. Together they form a unique fingerprint.

    Cite this