The Influence Of International Enterprise Income Tax Competition On China's FDI

With the ever-increasing scale of international direct investment,international tax competition with the aim of attracting more international interests and attracting foreign capital inflows has become more frequent.Countries focus on promoting their own economic growth to reform taxation policies,drastically reduce the corporate income tax rate,and increase the after-tax profitability of corporate investment,thereby affecting the global capital layout.Take the United States as an example.At the end of 2017,Trump signed the largest tax cut in the United States since 1986,focusing on lowering the corporate income tax rate and increasing the attractiveness of international capital.The international tax competition triggered by the US tax reform will also cause the world's economy to compete for tax cuts.As a developing country,foreign direct investment(FDI)is an important way for China to meet funding needs.Therefore,in the face of increasingly fierce international corporate income tax competition,it is of great practical significance to thoroughly study its impact on international direct investment.First of all,this article reviews a large number of relevant research at home and abroad,and summarizes previous scholars' research methods and conclusions on taxation and international capital flows.Based on this,it analyzes the impact of corporate income tax on FDI flow from a theoretical perspective.The study concludes that increasing the cost of corporate income tax will inhibit corporate investment behavior;raising the marginal rate of return on corporate income tax will stimulate corporate investment behavior.Comprehensively consider the tax system of capital exporting countries and capital importing countries,and further analyze the transmission mechanism of the corporate income tax system affecting China's FDI inflows,and draw theoretical analysis results:the statutory tax rate of capital export countries has an inhibitory effect on FDI;corporate income tax effective tax rate Instead,it has a catalytic effect on FDI.Secondly,through collecting and sorting out the corporate income tax of member countries of the Organization for Economic Co-operation and Development(OECD)and related data of direct investment by member countries in the same year,a preliminary study of statistical methods has verified the relationship between China' s FDI inflows and corporate income tax rates of OECD member countries.There is a relationship.Again,based on the perspective of China,the capital importing country,35 OECD member countries from 2006 to 2016 were selected as research samples and a static panel regression model was established to empirically analyze the impact of taxation policies.The study confirms that the statutory corporate tax rate of capital-exporting countries,the effective tax rate of capital-entry countries,and the effective tax rate of capital-entry countries are significantly negatively correlated with FDI inflows in China;the effective corporate tax rate of capital-exporting countries,the statutory tax rate of capital-entry countries,and the inflow of FDI in China are significantly positive.Related.On this basis,in order to refine the study on the impact of host country taxation policies on FDI inflows,the model was expanded to analyze the role of taxation policy reforms in China's foreign-funded enterprises in 2008.The results show that the merger of the two taxes has increased the tax burden on direct investment in trauma to a certain extent and reduced the scale of FDI inflows.Finally,in order to better respond to the new situation of international tax competition,this paper puts forward relevant policy recommendations:1.Pay close attention to the trends of international tax reforms,consider international tax competition from a global perspective;2.Avoid tax cuts as the only way to reduce taxes.Actively promote the improvement of the domestic corporate income tax policy system,rationalize the establishment of a cross-border restructuring-related income tax system;3.Improve the preferential taxation policies for domestic industries and increase the overall competitiveness of China's taxation system;4.Appropriately increase international taxation cooperation to achieve a win-win development.