摘要：Abstract Tax gap measures differences between tax theoretically due and tax actually paid. Researchers and authority attribute tax gap as a measure of tax planning. At a firm level, the measure is often referred to book-tax difference (BTD), which has been utilised by researchers as a measure of tax planning given the unavailability of tax return data. In line with tax gap, BTD measures the extent taxable income deviates from the accounting income. As multinational companies (MNC) have more opportunities to effectively avoid tax than the domestic-only companies, it is hypothesised that the MNC’s permanent component of BTD (PD) differs significantly from the temporary component (TD). The sample is Bursa Malaysia-listed MNC and the data are drawn from Datastream and annual reports. Using a direct consistency test, this study reports the behaviour of BTD and its main components, PD and TD, over 2008–2014. To investigate whether BTD can be explained by firm-specific, the data are also analysed using panel regression models. Foreign sales, earnings management and auditor are found significant in explaining the aggregated tax planning measure. PD is found as not only the source of the relationship but also outweighs TD in explaining the relationship. This study contributes to literature and practice in terms of the nature and behaviour of BTD and its components using MNC settings. Findings on disaggregated BTD can be inferred to MNC’s effective tax planning strategies, particularly in addressing the questions or debates of whether the MNC have effectively utilised tax planning opportunities through permanent BTD.
