INVESTIGATION OF TAX PENALTY ANNOUNCEMENTS ON BANKS’ STOCK RETURNS

Yakar S., Elbir G., Kandır S. Y.

IERFM ECONOMIC RESERACH AND FINANCIAL MARKETS CONGRESS WITH INTERNATIONAL PARTICIPATION, Konya, Turkey, 15 - 17 October 2020, no.1247, pp.53, (Summary Text)

  • Publication Type: Conference Paper / Summary Text
  • City: Konya
  • Country: Turkey
  • Page Numbers: pp.53
  • Çukurova University Affiliated: Yes

Abstract

Penalties are imposed for unlawful acts under Tax Procedure Law numbered 213. Administrative fine is imposed for misdemeanor in the form of loss of tax revenue and taxrelated irregularity. Paying tax penalties for this misdemeanor would be a factor that impacts profitability of companies. Public banks announce tax penalty information via Public Disclosure Platform. In this study, impact of tax penalty announcements on banks’ stock returns is examined by event study methodology. A total of 5Borsa Istanbul banks that made 13 tax penalty announcements between 2012 and 2018 were included in the sample. Event study method is employed and tax penalty announcements on different dates are determined as event days. Event window is constructed by determining five days before and five days after the event day. Empirical findingssuggest that tax penalty announcements do not have a significant impact on stock returns. This finding implies that stock market appears to be efficient in semi-strong form.