Research On Multinational Corporations' Tax Inversion Transaction

With the development of the global economy,multinational corporations have become more and more important under the tide of economic globalization.The tax burden of multinational corporations has also increased with the development of multinational corporations.The high tax burden on corporate income tax has led to the emergence of transnational corporations' tax avoidance activities.Domestic and foreign research on tax avoidance activities of multinational corporations has formed a complete system,of which the study of tax avoidance occupies an important position.Multinational companies use transfer pricing,capital weakening and other means to reduce corporate tax burdens.In addition,multinational corporations also use tax havens to reduce corporate tax burdens,use tax rate differences between tax havens and their parent companies to conduct commercial activities to achieve tax avoidance purposes.In the study,it was found that there are certain similarities and differences between tax inversion transactions and the use of tax havens to avoid taxation.Scholars have conducted multi-angle research on the causes and impacts of tax inversion transactions,as well as the impact of suppressing tax inversion trading policies.Some scholars also conduct empirical analysis of all inverting transactions and analyze whether transnational companies can use inverting transactions to achieve tax avoidance purposes.At the meantime,we should realize that the study of tax inversion transactions is a dynamic process.With the changes in regulatory policies,there will be dynamic feedback on tax inversion transactions.At the theoretical level,this paper first analyzes the trading methods and characteristics of multinational corporations' tax inversion transactions,and the common transaction architecture design.It then summarizes the causes and effects of transnational corporations' use of inverting transactions,and finally summarizes the government's response to tax inversion transactions.Through the analysis of the theoretical part,explains on multi-angles how multinational companies use tax inversion transactions to avoid taxation and form the basis for case analysis.This article selects the transaction cases between Burger King and Tim Horton in 2014 for analysis,corresponds to the above theoretical analysis.After the analysis of the basic conditions of the transaction and the analysis of the reasons for the transaction,the use of two financial statement indicators to analyze the impact of the case company's tax inversion transaction,concluded that Burger King has a clear tax avoidance motivation due to the characteristics of its company's registered taxation system.And the effective tax rate of post-transaction case companies,has shown a significant decline,indicating that inverting deals have a significant impact on the goal of multinational corporations to avoid taxation.At the same time,the study found that with the gradual improvement of regulatory policies,inverted transactions are no longer a single self-inversion.In order to meet the entry threshold for inversion of transactions,the inverted transactions of Burger King and Tim Horton also have certain commercial substance.M&A transactions Satisfying the development strategy of both sides of the transaction led indirectly to the use of tax inversion transactions to achieve tax avoidance purposes.At the third part of the case study,by studying the impact of the new tax reform on tax inversion transactions and other factors that reduce tax inversion transactions,it is concluded that the possibility of tax inversion transaction activity regeneration is low.At the same time,the author does not deny the possibility of recurring tax inversion transactions as the new environment changes.The last part of the case study,links the tax inversion transaction with China's anti-tax avoidance practice,and analyzes its implications for China's anti-tax avoidance practice.It is concluded that in a short period of time,because of the characteristics of our tax system,the possibility of tax inversion transactions in our country is low.At the same time,at this stage,our country should optimize the existing tax system,which mainly applies the personal principle to the overseas income.We should perfect the existing anti-tax avoidance system and the overall tax system in time,perfect the anti-tax avoidance system in the merger and acquisition reorganization,focus on the tax avoidance operation carried out by multinational corporations,and achieve the purpose of ensuring the tax revenue of our country.The final conclusion of this paper is summarized from the theoretical level and case analysis level,and the overall analysis shows that multinational corporations have obvious motivation to avoid tax,the use of tax inversion enables it to achieve tax avoidance purposes and gain tax benefits.At the same time,the author draws a conclusion that the policy has a significant impact on the tax inversion transaction.Using the successful experience of the United States to govern the tax inversion transaction,our country should perfect the anti-tax avoidance system and the current taxation system for overseas income in the aspect of the tax system.