Research On The Tax Burden Of Chinese Foreign Direct Investment Enterprises In The United States

With the further deepening of global economic integration, the economic communication and cooperation between China and the United States have gradually gone far. The United States has become the top priority when Chinese enterprises considering which country to invest. By July 2015, the amount of Chinese foreign direct investment in the United States is nearly 50 billion dollars. Tax is one of the most important factors which can affect business decisions. The level of the tax burden is of great importance for the development of the enterprises.So how is the tax burden of Chinese enterprises making foreign direct investment in the US? What are the factors that have impact on the tax levels of the corporations?Firstly, this paper has analyzed the main taxation when Chinese enterprises making foreign direct investment in the US and the taxation differences between China and the US. The research shows that the corporate income tax is the major taxation. And also, the enterprises making investment in the US are facing a more complex environment because of the complexity of the American tax system as well as the huge taxation differences between China and the US. Then, this paper has estimated the tax burden of Chinese enterprises when making foreign investment. It reveals that the tax burden of above Chinese enterprises is affected by the financial indicators and corporate tax rate. Based on that, this paper has measured the tax burden of Chinese enterprises making foreign direct investment in the US making use of the screened 126 samples from the aspect of whole and industrial. In order to deeply reflect the impact of foreign direct investment can have on the corporate tax burden, this paper has chosen Anhui Zhongding as an example. The results show that the tax burden dropped significantly after making foreign direct investment in the US. For detailed, this paper found that asset, profitability are positively related to corporate tax, while the capital structure is negatively related to corporate tax. And the fixed asset intensity is positively related to corporate tax first and then negatively. Finally, this paper has put forward relevant suggestions based the above research.