Research On Our Outward Foreign Direct Investment From The Tax Treaties Point

With the development of world economic integration, countries are using taxincentives to support and encourage outward foreign direct investment of domesticenterprises. In2000, in order to expand economic development,our Party proposes the“GOING OUT” strategy formally, following the”EDUCATION” strategy and“WESTERN DEVELOPMENT” strategy. In addition, in the post-crisis era, encouragingthe outward foreign direct investment of domestic enterprises and strengthening the traderelationship between different countries can also ensure the stability and healthy of theeconomic development.Tax treaty is a legal binding agreement signed between the government parties whichcan promote each other’s economic cooperation and personnel exchanges. Tax treaties canhelp the international tax payers to avoid double taxation, eliminate tax discrimination andto reduce unreasonable tax burden. Besides, Tax treaties signed to avoid double taxationcan also help to prevent the tax evasion effectively. It will play a very important role in our“GOING OUT” strategy. Currently, comparing to the developed countries such as theUnited States and France who has many tax incentives like tariff concessions, tax breaks,tax credits and deferred tax, China’s simple tax incentives need to be improved as quicklyas possible. The financial crisis has changed the international economic structure, in thepost-financial crisis era, the Tax Regulation is very important for the s “GOING OUT" ofChinese enterprise. But there are many deficiencies of our tax structure, especially in thetax treaties part. Tax treaty can make sure the interest of the outward investments ofcompanies and the tax jurisdiction of our country not being damaged. Improving the taxtreaties can not only create a fairer tax environment for the companies but also provide alegal basis and operational mechanisms when they are in troubles.In-depth study of how tax treaties affect the decisions about outward foreign directinvestment and what the problems of tax treaties policies are and what the solutions arehave the vitally practical value to effectively implement our country’s “GOING OUT” strategy and adjust our international tax policies with reason. There are many factors canaffect the outward direct investment, tax treaty is only a tiny part of them. But it is still veryindispensable for the companies can enjoy a real benefit from the Economic globalization.In order to keep the developing of economy of our country, it is our duty to create a healthytax environment which is based on our National conditions.