The Effect Of The Enterprise Income Tax Reform On The Corporate Investment And Enterprise Value

Under the background of economic globalization, international competition isbecoming increasingly fierce. In order to adapt to the international tax competition, toprotect interests of domestic enterprises and to enhance competitiveness of domesticenterprises in around the world market, the new income tax law emerge. Tax effect oncorporate behavior through a variety of ways,while the corporate income tax reformchanges business environment,this kind of change will affect the management behaviorof enterprises, Including tax planning, earnings management, investment decision,capital structure and corporate value. This paper mainly studies the enterprise Tax effectof tax reform from a micro perspective. From corporate investment decisions andcompany value, we can see the effects of the tax reform on China’s listing Corporation.Firstly, this paper will tease the tax effect of domestic and foreign enterprises aboutincome tax reform. We find that the mainstream research methods are based on theperspective of the cost of capital, which has certain limitations. This paper analyses therelations of tax, investment and the value of the enterprise from the point of view of theactual tax burden, the cost of capital, optimal capital stock and profitability. The taxinfluences the investment behavior of enterprises, enterprise value and developmentability from the actual tax burden of tax, the cost of capital, profitability and otheraspects. At the same time, it also confirms Research ideas from the actual tax burden tothe growth rate of investment, the actual tax burden to the enterprise value, and thegrowth rate of investment to h the value of the enterprise. And it put forward thehypothesis based on careful research of the old and new tax law differences. Accordingto the empirical research on the data requirements, this paper discusses the processing ofthe raw data and weed out the unqualified data. Finally, we get the final sample. Inorder to build the empirical model, the article selected and defined an empirical studyon the required variables.The focus of this paper is an empirical study. Firstly, this paper makes descriptiveanalysis to the selection of variables, and analysisaffection of the enterprise value andenterprise investment scale by the enterprise income tax reform. Secondly, this papermade a correlation analysis on the variables; the results confirmed a certain extent onthe descriptive statistics, which concluded that the new income tax law changes theenterprise actual tax burden. Also, it has an influence on corporate investment andenterprise value. We get the following conclusions through the empirical study: the one is that Theimplementation of the new enterprise income tax law reduced the overall tax burden ofChina’s listing Corporation and promoted the corporate investment, which extend thescale of enterprise investment. The new enterprise scale income tax law affectsenterprise investment by changing the actual tax burden of enterprises. The second isthat the enterprise value and the average effective tax rate have significantly negativecorrelation. Enterprise income tax reform put down the overall tax burden of enterprises,which promotes China’s listing Corporation increase enterprise value.The innovation of this paper are two aspects: the one is that analysis lasts long spanof time about8years, which can solve the impact of the policy lag effect and Tax policy.The paper study on the effect of "two in one tax" policy on corporate investment andenterprise value through the microscopic point of view, the new enterprise income taxlaw affects the cost of capital by changing the real effective tax rates and ultimatelyaffect the enterprise’s investment decision and influence path of changing the enterprisevalue.