Considering adjustments to the valuation formulae under unconventional tax systems, then numerous papers are devoted to valuation adjustments under a dividend imputation system
. (2) Ashton (1989), and Monkhouse (1993, 1996,1997) developed and adjusted a capital asset pricing model (CAPM), weighted average cost of capital (WACC) and adjusted present value (APV) methodology under an imputation tax system.
Currently, apart from the classic form of profit taxation, we have other forms of this tax: a modified system of double taxation (modified classical system or partial integration system), the system that partially exempts dividends from taxation (single taxation system--dividends exemption system), the system of full imputation of dividends (full imputation system
), the system of partial imputation of dividends (partial imputation system
However, Malta applies an "imputation system
" whereby the corporate income tax paid by the company is refunded to the shareholders when distributions are made to them.
TARIQ HUSSAIN: Under the Simplified Imputation System
, a company that receives dividend is treated in a very similar manner to an individual receiving a franked distribution.
Some countries, such as Australia, Canada, and the UK, have removed the double taxation and adopted a dividend imputation system
where the amount of tax charged at the firm's level will be credited back to the stockholders when they receive cash dividends.
The usefulness of the imputation system
is likely to be questioned if corporate tax rates are to be lowered even further (Annex 4.A1).
the Finnish imputation system
because it failed to provide tax credits
* Norway has a full imputation system
to avoid double taxation of dividends.
The imputation system
approach to double taxation is well tested.
Many countries use an imputation system
to eliminate the double tax on dividends found in a classical system.
- Simplified imputation arrangements, to streamline the operation of the existing imputation system
In this context, the imputation system
for distributed profits, which discriminates against foreign shareholders, is increasingly questioned.