Use of the tax benefit of conventional remuneration of share capital by Portuguese companies
Autor(a) principal: | |
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Data de Publicação: | 2022 |
Outros Autores: | |
Tipo de documento: | Artigo |
Idioma: | eng |
Título da fonte: | Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) |
Texto Completo: | http://hdl.handle.net/10773/35142 |
Resumo: | This article aimed to analyze the use of the tax benefit of conventional remuneration of share capital (CRSC) by Portuguese companies and perceive the influence of tax policies on their financing decisions. Most of the studies are based on the relationship between financing through debt capital and taxation, in which evidence is found that tax benefits influence the capital structure of companies. There is a lack of studies in Portuguese companies. The article is relevant as it adds the increase in capital variable, because in some countries, particularly Portugal, there are also tax incentives through the own-capital financing route. Thus, this investigation provides results of Portuguese companies choosing own-capital financing before and after tax changes that incentivize its use. The empirical study was conducted through a survey questionnaire, using a sample composed of 324 Portuguese companies with economic activity. The article contributes to the study of the relationship between own-capital financing and the existing tax law in Portugal. The tax benefit of CRSC has not been enough for companies to alter their financing policy when they have to choose between resorting to debt capital and injecting new funds through capital holders. However, this incentive has led to a reduction in debt capital, through its conversion into capital, and an increase in capital through the incorporation of earnings generated, with both these practices potentially representing tax planning opportunities. Despite there being the perception that the acceptance of interest as a tax expense favors company financing through debt capital, there is recognition that this benefit incentivizes the capitalization of companies and their financing through own capital, as an alternative to debt capital, especially in medium-sized companies. |
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Use of the tax benefit of conventional remuneration of share capital by Portuguese companiesCapital structureTax benefitFinancingConventional remunerationShare capitalThis article aimed to analyze the use of the tax benefit of conventional remuneration of share capital (CRSC) by Portuguese companies and perceive the influence of tax policies on their financing decisions. Most of the studies are based on the relationship between financing through debt capital and taxation, in which evidence is found that tax benefits influence the capital structure of companies. There is a lack of studies in Portuguese companies. The article is relevant as it adds the increase in capital variable, because in some countries, particularly Portugal, there are also tax incentives through the own-capital financing route. Thus, this investigation provides results of Portuguese companies choosing own-capital financing before and after tax changes that incentivize its use. The empirical study was conducted through a survey questionnaire, using a sample composed of 324 Portuguese companies with economic activity. The article contributes to the study of the relationship between own-capital financing and the existing tax law in Portugal. The tax benefit of CRSC has not been enough for companies to alter their financing policy when they have to choose between resorting to debt capital and injecting new funds through capital holders. However, this incentive has led to a reduction in debt capital, through its conversion into capital, and an increase in capital through the incorporation of earnings generated, with both these practices potentially representing tax planning opportunities. Despite there being the perception that the acceptance of interest as a tax expense favors company financing through debt capital, there is recognition that this benefit incentivizes the capitalization of companies and their financing through own capital, as an alternative to debt capital, especially in medium-sized companies.USP2022-11-07T11:14:57Z2022-01-01T00:00:00Z2022info:eu-repo/semantics/publishedVersioninfo:eu-repo/semantics/articleapplication/pdfhttp://hdl.handle.net/10773/35142eng1519-707710.1590/1808-057x20221587.enCruz, Sérgio RavaraSoares, Cesárioinfo:eu-repo/semantics/openAccessreponame:Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)instname:Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informaçãoinstacron:RCAAP2024-02-22T12:07:23Zoai:ria.ua.pt:10773/35142Portal AgregadorONGhttps://www.rcaap.pt/oai/openaireopendoar:71602024-03-20T03:06:07.169026Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) - Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informaçãofalse |
dc.title.none.fl_str_mv |
Use of the tax benefit of conventional remuneration of share capital by Portuguese companies |
title |
Use of the tax benefit of conventional remuneration of share capital by Portuguese companies |
spellingShingle |
Use of the tax benefit of conventional remuneration of share capital by Portuguese companies Cruz, Sérgio Ravara Capital structure Tax benefit Financing Conventional remuneration Share capital |
title_short |
Use of the tax benefit of conventional remuneration of share capital by Portuguese companies |
title_full |
Use of the tax benefit of conventional remuneration of share capital by Portuguese companies |
title_fullStr |
Use of the tax benefit of conventional remuneration of share capital by Portuguese companies |
title_full_unstemmed |
Use of the tax benefit of conventional remuneration of share capital by Portuguese companies |
title_sort |
Use of the tax benefit of conventional remuneration of share capital by Portuguese companies |
author |
Cruz, Sérgio Ravara |
author_facet |
Cruz, Sérgio Ravara Soares, Cesário |
author_role |
author |
author2 |
Soares, Cesário |
author2_role |
author |
dc.contributor.author.fl_str_mv |
Cruz, Sérgio Ravara Soares, Cesário |
dc.subject.por.fl_str_mv |
Capital structure Tax benefit Financing Conventional remuneration Share capital |
topic |
Capital structure Tax benefit Financing Conventional remuneration Share capital |
description |
This article aimed to analyze the use of the tax benefit of conventional remuneration of share capital (CRSC) by Portuguese companies and perceive the influence of tax policies on their financing decisions. Most of the studies are based on the relationship between financing through debt capital and taxation, in which evidence is found that tax benefits influence the capital structure of companies. There is a lack of studies in Portuguese companies. The article is relevant as it adds the increase in capital variable, because in some countries, particularly Portugal, there are also tax incentives through the own-capital financing route. Thus, this investigation provides results of Portuguese companies choosing own-capital financing before and after tax changes that incentivize its use. The empirical study was conducted through a survey questionnaire, using a sample composed of 324 Portuguese companies with economic activity. The article contributes to the study of the relationship between own-capital financing and the existing tax law in Portugal. The tax benefit of CRSC has not been enough for companies to alter their financing policy when they have to choose between resorting to debt capital and injecting new funds through capital holders. However, this incentive has led to a reduction in debt capital, through its conversion into capital, and an increase in capital through the incorporation of earnings generated, with both these practices potentially representing tax planning opportunities. Despite there being the perception that the acceptance of interest as a tax expense favors company financing through debt capital, there is recognition that this benefit incentivizes the capitalization of companies and their financing through own capital, as an alternative to debt capital, especially in medium-sized companies. |
publishDate |
2022 |
dc.date.none.fl_str_mv |
2022-11-07T11:14:57Z 2022-01-01T00:00:00Z 2022 |
dc.type.status.fl_str_mv |
info:eu-repo/semantics/publishedVersion |
dc.type.driver.fl_str_mv |
info:eu-repo/semantics/article |
format |
article |
status_str |
publishedVersion |
dc.identifier.uri.fl_str_mv |
http://hdl.handle.net/10773/35142 |
url |
http://hdl.handle.net/10773/35142 |
dc.language.iso.fl_str_mv |
eng |
language |
eng |
dc.relation.none.fl_str_mv |
1519-7077 10.1590/1808-057x20221587.en |
dc.rights.driver.fl_str_mv |
info:eu-repo/semantics/openAccess |
eu_rights_str_mv |
openAccess |
dc.format.none.fl_str_mv |
application/pdf |
dc.publisher.none.fl_str_mv |
USP |
publisher.none.fl_str_mv |
USP |
dc.source.none.fl_str_mv |
reponame:Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) instname:Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informação instacron:RCAAP |
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Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informação |
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RCAAP |
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RCAAP |
reponame_str |
Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) |
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Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) |
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Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) - Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informação |
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1799137715880460288 |