A Study On Book-Tax Difference And Its Influencing Factors

Because the relation between accounting principles and tax laws inclines to separation pattern in China, it has difference between accounting profits and taxable income consequentially. The book-tax difference is inherent,but at the same time ,it provides space for firms'earnings management and income tax dodging. Because of the book-tax difference,firms do not need to pay income tax for illusory profits consequentially. In fact,plenty of firms pay little or nothing. Therefore,it becomes a remarkable problem that how to recognize and deal with book-tax difference correctly. The purpose of this paper is to analyse the book-tax difference and their influencing factors,and the correlation between them.This paper studies the issues about book-tax difference in both theoretical approach and empirical approach. First,from institutional angle of view,the thesis presents two relation patterns between accounting principles and tax laws, and discusses the selection,representation,cause and influence of book-tax pattern in our country,pointing out that the institutional factor is the root cause of book-tax difference. Then,from firms'earnings management angle of view,the thesis analyses Chinese listed companies'share allotment motivation and tax dodging motivation,and presents the measure approaches of earnings management. Next,the thesis takes empirical study on the book-tax difference and its institutional factors,earnings management factors and tax dodging factors,and on the relation among them. It concludes that institutional factors,listed companies'earnings management behavior and tax dodging behavior are associated with book-tax difference. To the study conclusion,the paper presents proposals on how to control the institutional factors and the earnings management and tax dodging behaviors that cause book-tax difference.The studies of this paper have significant theoretical meanings that help to deepen the study extent of differences between accounting principles and tax laws,as well as to widen the study field of earnings management. They also have significant practical meanings in enhancing the cooperation of accounting principles and tax laws,intensifying the government and the security supervisory department to cooperate to control the listed companies'earinings management and tax dodging behaviors.