The Causes And Control Measures Of Foreign-related Tax Loss In China

With the development of economic globalization, large amounts of foreign investment came into China. Foreign invested enterprises have made a positive contribution to our country's economic growth and development. However, the tax avoidance problem of foreign investment enterprises has stand out to be an important issue. This problem has damaged the China's foreign-related tax environment, and will harm the development of national economy in the long run. International tax avoidance has shown its complexity and diversity, as it related to many country's economic environment, political systems, historical background, differences in tax laws and many other issues. The methods of handing tax avoidance problem in different countries are not the same. In China, the work of tax anti-avoidance is still in the start-up phase, we have many problems and shortcomings in the theory and practice, and we need to lean the international experience in order to improve our work. This thesis explained the current causes and methods of evading tax of foreign invested enterprises in our country, and then gave suggestions to control China's foreign-related tax loss. These suggestions are important to improve the utilization of foreign investment, the foreign-related tax collection and the organization of revenue in China.This thesis consists of five parts, the first part, mainly introduces the background of this research, significance of the topic, innovation, deficiencies and literature reviews. The second part introduces the tax avoidance situation of foreign invested enterprises in China. The second part introduces the tax avoidance situation of foreign invested enterprises in China. The comparison between the state-owned enterprises and the foreign investment enterprises in these three indicators: profit of sales, tax burden and elasticity of tax, has shown the existence of tax avoidance in foreign investment enterprises. The third part analyzes the causes of foreign related tax loss. On the theoretical aspect, the motivation and impact factors of tax avoidance are analyzed by A-S models. On the practice aspect, the specific reasons of tax avoidance considering the tax system and tax management are analyzed. The fourth part analyzes the ways of foreign-related tax loss in some case studies, included transfer pricing, thin capitalization, tax havens and so on. The harm of the tax loss to our national economy is also analyzed. The last part gives countermeasures and suggestions in the aspects of improving tax legislation and enhancing tax management in order to prevent the foreign-related tax loss.