Abstract

The current research paper aims at investigating the role of corporate governance in companies’ tax planning. The corporate governance characteristics utilized herein were the number of the board of managers, the number of the nonexecutive directors, the stability of the CEO’s position and the financial specialization of the board of directors’ members. Also, the effective rates of the accrual and cash tax were applied as the scales for assessing the taxation programs. To test the study hypotheses, the information from 54 companies in the time span from 2008 to 2013 was exposed to multivariate regression analysis. The study findings indicated that the tax planning is more frequently seen in the companies featuring a smaller number of members in the board of managers. Moreover, the more there is a larger number of nonexecutive members in the board of managers and also the more the CEO, due to his membership in the board of manager, enjoys a position featuring more stability, then there will be more tax planning. The study findings lack the expected transparency in regard to the effect that the board of managers’ financial specialty has on the tax planning. The results obtained from the investigation of the effect of companies’ special characteristics on tax planning indicated that the companies having a higher rate of return have had a more frequent tax planning but the financial leverage was found devoid of any effect on the tax planning. Also, the effect of company size on the tax planning was not as transparent.