Research On The Impact Of Heterogeneity Of Bilateral Tax Treaties On OFDI In China

With the continuous deepening of China's reform and opening up and the vigorous development of an export-oriented economy,and the vigorous advancement of the "Belt and Road" construction and international capacity and equipment manufacturing cooperation in recent years,more and more companies "going global" to participate in international market competition.Promote the sustained and rapid development of China's total foreign investment.In 2015,China's net output of capital was achieved for the first time,indicating that China's foreign direct investment exceeded the level of foreign investment for the first time in the same period,achieving a historic breakthrough.Since then,China has achieved net capital export under two-way direct investment for three consecutive years.The outbound investment activities of multinational enterprises in China have developed rapidly and have great potential.In 2018,China's foreign direct investment flow ranked second in the world,and its investment stock ranked third in the world.It has achieved outstanding results in "going global".With the acceleration of the globalization process of the world,economic integration has become an irreversible trend,and capital flows more freely and frequently between countries,but double taxation has become a major problem that hinders the free flow of capital.In theory,the signing of international taxation can reduce the relative cost of enterprises by avoiding double taxation and the establishment of tax preferences,and provide a transparent and visible tax environment for overseas investment of enterprises,thereby urging enterprises to increase confidence in overseas investment and accelerate the pace of foreign investment;At the same time,tax treaties are an important way to coordinate tax information exchange and combat tax evasion.Foreign direct investment that intends to avoid taxation through differences in tax systems or low tax rates in various countries will be affected.Under the background of strict government supervision and access to effective information,theprobability of tax evasion is greatly increased.The role of tax avoidance will theoretically inhibit a country's foreign direct investment.In the discussions on the relationship between bilateral investment treaties and China's foreign direct investment,most of the existing research results have focused on the impact of the signing of bilateral tax treaties and ignored the heterogeneity of bilateral tax treaties.Due to differences in content,the forms and effects of bilateral tax treaties are not the same.Based on this,this article focuses on the heterogeneity of bilateral tax treaties,and explores the specific impact of heterogeneity of bilateral tax treaties on China's foreign direct investment in the host country.Through reading and sorting and theoretical analysis of tax treaties,the author refines the terms of bilateral tax treaties and believes that bilateral tax treaties are heterogeneous in three aspects: The time standards defined by the permanent establishment,the changes in withholding tax rates,and the existence of tax sparing provisions.By assigning different points to different clauses,quantifying the heterogeneity of bilateral tax treaties and establishing investment location selection models,and select the foreign direct investment data of 62 countries along the “Belt and Road” from 2003 to 2017 for regression analysis.The results show that the signing of a tax treaty has no direct impact on foreign direct investment in countries along the“Belt and Road”;The longer the time standard for the identification of a permanent establishment in a tax treaty,the more it will attract China's foreign direct investment;The lower the negotiated tax rate,the more it can attract China's foreign direct investment;whether there is a tax sparing clause has no significant impact on China's direct investment in foreign investment in countries along the“Belt and Road”.Based on this,on the issue of how to effectively improve China's level of foreign direct investment,this paper believes that it is necessary to take the initiative to integrate tax treaties into the country's “Belt and Road” initiative.Establishing a tax sparing treaty's platform to enhance the effect of tax incentives;Adjusting and revising some of the tax treaty clauses in accordance with economic development in a timely manner;Meeting the development trend of international tax treaties,strengthening protection measures for foreign-funded enterprises and reducing investment risks of foreign investment enterprise.