The Impact Of Internal Information Environment On Corporate Income Tax Management

Companies pursue favorable tax outcomes through reasonable tax avoidance arrangement and the benefits gained from tax avoidance can add corporation value.Under the current taxation environment of china,corporates have a strong motivation to reduce tax burden.But many companies don't have ability to do so,many companies avoid tax blindly and aggressively,causing high risks,once get caught by the tax authorities,companies will face both reputation and cash losses,this article mainly studied how the corporate internal information environment improving corporate tax avoidance ability,and not increasing tax risk at the same time.So what effects does the internal information environment have on tax avoidance? This paper argues that the internal information environment increases tax avoidance abilities while reducing tax risks.First,information is the basis of decision-making,high-quality internal information enables managers to identify tax planning opportunities.Second,the timeliness of information enables managers to control tax risks and locate the problem faster.Third,high quality internal information environment enables companies to keep relative profiles,and makes the tax planning be accepted by tax authorities more easily.Fourth,good internal information environment ensures good communication between tax department and business departments.Many enterprises evade tax duty without tax avoidance ability,such enterprises are facing enormous tax risks,once crossed the legal bottom line,they will pay a heavy cost.Considering tax management is important,after reviewing previous researches and thinking over the reality of China,this paper put forward four hypotheses:(1)internal information environment decrease the corporate's tax burden,(2)strictly taxation will increase corporates' tax burden,but high quality internal information environment can reduce this increasing effect,(3)diversification will increase corporate's tax burden,but good internal information environment can offset the increasing effect.(4)good internal information environment can reduce the tax risk of corporates.To examine above four hypotheses,I referred to domestic and foreign literatures,then established regression models,and tested the above hypotheses using the empirical data of A share listed companies from 2008 to 2016.This paper also includes a comprehensive robustness test to ensure the robustness of the regression results.Finally,I summarized research results and suggestions,and made a prospect for the future research.