The present study examines the relationship between volatile tax payments and dividend payouts. The findings suggest that the volatility of tax payments over time (e.g., due to changing tax laws, temporary tax benefits or uncertain tax positions) makes it more difficult for firms to maintain a consistent payout policy, reducing both the likelihood and the amount of dividend payouts. The study identifies a potential economic consequence of volatile tax payments and thus increases our understanding of the effect of business taxation on the payout policy of firms.

Further information: https://onlinelibrary.wiley.com/doi/epdf/10.1111/1911-3846.12831