Dividends and taxes : new evidence on firm behaviour after a recent change in the Swiss Tax Law

Weisskopf, Jean-Philippe (Ecole hôtelière de Lausanne, HES-SO // University of Applied Sciences Western Switzerland) ; Isakov, Dusan (University of Fribourg, Boulevard des Pérolles 90, CH-1700 Fribourg)

This article studies the effect of dividend taxation on corporate behaviour, more specifically how firms respond to a dividend tax cut. A change in the Swiss corporate law in 2011 has introduced the possibility for some firms to pay tax-exempted dividends to their shareholders We find that all the firms that fulfilled the conditions required by the new law started paying tax-exempted dividends to their shareholders. This means that the management takes explicitly into account the tax treatment of their shareholders when setting corporate payout policy. We find that this reform has led to an increase in the propensity of firms to pay dividends as well as an increase in dividend payouts and dividend yields. This is consistent with the view that firms pay lower dividends in the presence of taxes.


Keywords:
Conference Type:
full paper
Faculty:
Economie et Services
School:
EHL
Subject(s):
Economie/gestion
Publisher:
Brussels, Belgium, 1st October 2016
Date:
Brussels, Belgium
1st October 2016
2015
Pagination:
25 p.
Published in
Proceedings of the Research Seminar in Applied Economics Management (RSAEM)
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Note: The status of this file is: restricted


 Record created 2016-11-21, last modified 2019-04-23

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