Impacts of Fiscal Reform on Dividends: Evidence from Mexico
Accounting & Taxation, v. 11 (1) p. 71-81
11 Pages Posted: 11 Feb 2020
Date Written: 2019
This paper addresses the Mexican 2014 Tax Reform. Specifically, we examine the distribution of dividends made by thirty-five companies that make up the Price and Quotation Index of the Mexican Stock Exchange. We also examine shareholders who receive the dividends. Results show that companies refrained from declaring dividends in 2014 and payments normalized in 2015. Since 2015, as a result of the 2014 Tax Reform, which required shareholders who receive dividends to pay an extra tax of 10%, dividends have become les desirable. Companies have accumulated profits destined for reinvestment in the company.
Keywords: Dividend Policy, Residual Theory, Tax Reform
JEL Classification: G31, G38
Suggested Citation: Suggested Citation