The Research On The Impact Of International Tax Competition On FDI

At present,economic has slowed down in China.Therefore,in China,“tax reduction and fee reduction” is needed to mobilize the enthusiasm of capital,and further promote opening up to promote industrial transformation and upgrading,and thus promote high-quality economic development.However,the international situation of capital is still grim,and the bottleneck of the system and mechanism for expanding openness still exists in China.Therefore,how to maintain international competitiveness for China under the situation of international tax competition is a problem worthy of consideration at the moment.At the same time,if this method of reducing corporate income tax can effectively attract capital,then China can also reform the corporate income tax based on the current indirect tax reform to maintain international competitiveness,to attract foreign capital and inject new impetus into economic development.The main body of the article is divided into five parts.The first chapter is related to theoretical analysis.This part is a brief introduction to the concept and relevant theories of international tax competition and foreign direct investment,mainly to analyze the specific channels that tax rate affects foreign direct investment and the relationship between tax rates and foreign direct investment,in order to provide theoretical basis for the following empirical evidence.The second chapter is the analysis of the status quo of international tax competition and foreign direct investment.Starting from the background of the times,this chapter has the status quo of foreign direct investment and the manifestation of tax competition in different economies and the trend of international tax competition.At the same time,it analyzes the macro tax burden and the impact of corporate income tax on investment in China and raise related issues.The third chapter is an empirical analysis of the relationship between international tax competition and foreign direct investment.This chapter builds a benchmark model based on panel data of 31 economies with the largest foreign direct investment inflows.It is found the results through empirical regression that the statutory tax rate of the host economy will significantly affect foreign direct investment,which indicates international taxation competition will have a significant impact on foreign direct investment.The fourth chapter is mainly based on the theoretical research and empirical results of the previous chapters.At the same time,combined with the current background of the digital economy,it gives relevant information on attracting foreign direct investment from three aspects: optimizing corporate income tax system,optimizing business environment and improving international tax treaties.The topic of this paper is the impact of international tax competition on foreign direct investment,mainly using literature analysis and empirical analysis.Firstly,the related literatures are sorted out.On the basis of this,analyzing of the relationship between tax and foreign direct investment,and the status quo of the trend state of international tax competition,the form of performance and the state of tax burden in China and foreign direct investment.Then conducting the empirical research and getting the response that foreign direct investment can be sensitively respond to changes in corporate income tax burden.The overall effect is that the higher the tax rate and the smaller the foreign direct investment,further demonstrating the attraction of foreign investors through international tax competition is effective,that is,international corporate income tax competition can significantly affect foreign direct investment.This paper explain the impact of international tax competition on foreign direct investment and proposes optimization suggestions for improvement of international competitiveness,which is based on the empirical study of the relationship of corporate income statutory tax rate and foreign direct investment.