Journal of Tax Research

  In many countries, the governments grant various tax exemptions and incentives to the companies due to the different objectives. One of those exemptions in Iranian Tax System is the relief of the Article 143 of the Iranian Direct Tax Act which has developed since 1966 in order to encourage the companies to join to the Tehran Stock Exchange and it has continued until now. By using the data of 102 companies listed in Tehran Stock Exchange during 2003 to 2011 and implementing the Panel data Method, we investigate if there is a need to grant such a tax exemption regarding the current developments in the Iranian financial markets at the present time. The results show that there is no significant relationship between the tax exemption of the Article 143 of the Iranian Direct Tax Act and stock return of the companies listed in Tehran Stock Exchange. In other words, nowadays, benefiting from the tax exemption of the Article 143 is not the main motivation of companies to join to the Tehran Stock Exchange.