Tax planning and Firm value: The case of listed firms with different size in Vietnam

Abstract

The research objective of the article is to evaluate the impact of tax planning on firm value across the non-financial companies listed in Vietnam of different sizes. The research sample was determined by the purposive sampling method, including 504 companies in the period from 2015 to 2020. Then, the authors split the sample into a large company group and a small company group based on the median value of total assets. The results confirm that the tax planning represented by the effective tax rate has a negative effect on firm value, and this relationship still exists for the case of large-scale firms, while it is not statistically significant in small firms. This demonstrates the advantages of large companies when they exercise financial management in the tax environment. Accordingly, the article recommends that the companies strengthen the association of tax planning with financial decisions to avoid tax or save tax, focus on increasing financial resources to expand firm size and take advantage of economies of scale to create an increase in firm value.