A Study On Corporate Income Tax Policies For Outward Foreign Direct Investment Of Resident Enterprises In China

Under the rapid development of economic globalization, capital is freer to flow around the world. In recent years, China's resident enterprises actively involve in the process of economic globalization and international competition and corporation. In the field of foreign direct investment (Hereinafter referred to FDI), China's inward and outward FDI have achieved a rapid development. However, compared with inward FDI in China and outward FDI of developed countries, China's outward FDI of resident enterprises still has problems such as small scale and the irrational structure. This paper attempts to fix the problems of the outward FDI by perfecting related corporate income tax policies. Domestic study on corporate income tax policies and China's outward FDI of resident enterprises are still in its infancy. Therefore, it is important to do the research.This paper firstly shows that corporate income tax policies have a significant impact on outward FDI of resident enterprises. Under such a premise dose the regulation to outward FDI through tax policies by the government make sense. Then, the paper analyzes the current situation and existing problems of China's outward FDI of resident enterprises and related corporate tax income policies, hoping to fix the problems of the outward FDI by perfecting the corporate income tax policies. Finally, the paper makes relevant policy suggestions. This is the basic idea of the study.This paper contains five parts:Chapter one is the introduction. It is composed of background and significance of the study, literature review, research methods and basic idea of the study. It also states the innovations of the study and difficulties that are confronted during the research.Chapter two theoretically analyzes the impact of corporate income tax policies on outward FDI of resident enterprises. Corporate income tax policies will influence the after-tax returns of resident enterprises'outward FDI, which would change the capital ownership advantages of resident enterprises, thus affecting the outward FDI decision by resident enterprises.Chapter three empirically studies the impact of corporate income tax policies on outward FDI of resident enterprises, based on the data of China. Firstly, it studies the impact of China's unilateral corporate income tax policies on outward FDI of resident enterprises through econometric method. The result shows that the impact is significant. Then, the relationship between tax agreement and outward FDI of resident enterprises is discussed in this chapter. Finally, the impact of tax credit on tax burden of resident enterprises that are engaged in outward FDI is analyzed in a designed case.Chapter four analyzes the current situation and problems of outward FDI and related corporate income tax policies in China, hoping to fix the problems of the outward FDI by perfecting the corporate income tax policies.Chapter five focuses on the policy suggestions, giving some thoughts of how to perfect the corporate income tax policy for outward FDI of resident enterprises in China. This paper suggests making the perfection in two correlated aspects, one is to perfect the supporting policy, the other is to perfect the guiding policy.Through the combination of positive analysis and normative analysis, qualitative analysis and quantitative analysis, this paper draws the following three conclusions: first, corporate income tax policies have significant impact on outward FDI of resident enterprises in China. That is, the government could regulate the outward FDI of resident enterprises by using tax policy as a tool. Second, according to Dunning's IDP theory, China's outward FDI of resident enterprises has entered the third period but still in the early stage and has many problems. Third, perfection of the corporate income tax policy for outward FDI of resident enterprises in China can be made through two aspects, one is to perfect the supporting policy, the other is to perfect the guiding policy. Supporting policy is to enlarge the scale of the outward FDI while guiding policy can help to improve the structure of the outward FDI.The main innovations in this paper lie in two aspects. First, the study combines the general FDI theory with tax-investment theory, analyzing the impact of corporate income tax policies on outward FDI of resident enterprises. Second, through econometric analysis, the paper finds out that China's corporate income tax policies have a significant impact on outward FDI of resident enterprises. Previous scholars seldom use econometric method to study this topic.