The Relationship Between Equity Restriction Of Listed Companies And The Actual Tax Burden Of Income Tax

The Corporate Income Tax is a tax that posed on the outcome of operation and production of companies in China. Before year 2008, the income tax rate is 33%. But since January 1, 2008, the income tax rate would be cut from 33% to 25%. Although this rate is relatively low compared to other countries, it still is a bunch of money for companies. How to reduce the firm’s tax burden is always the concern for companies. The ownership balance is a crucial component of corporate governance. It can make a major impact on production operation and decision making. The attitude of tax planning varies with ownership balance and different attitudes will lead to different actual income tax burden.This thesis uses many research methods to explore the relationship between the ownership balance and the actual income tax burden, including iterature review method, theory induction method, positive analysis method and contrast analysis method. It has the following significance. 1. It enriches the researches on income tax burden; 2. It gives a basis for the optimization of equity structure; 3. It gives a basis for the reform of state-owned enterprises. Firstly, the thesis introduces the background and significance of this paper and then reviews and sums up the studies on the ownership balance and income tax burden. Secondly,the thesis describes the functions between the ownership balance and income tax burden on the basis of related theories. Thirdly, the thesis uses multiple linear regression to analyze the relationship between the ownership balance and real income tax burden. In the meantime, it differentiates private enterprises and state-owned enterprises and discusses the difference in relationship.This thesis uses the data of listed companies during 2011 to 2013. The analysis of data is done by EVIEWS. The results show that there is a a negative correlation between the ownership balance and real income tax burden and the negative correlation is stronger for the private enterprises comparing to the state-owned enterprises.