Study On The Influence Of Credit And Tax Exemption Methods On Foreign Investment Of Enterprises

Economic globalization has brought closer economic exchanges among countries around the world,providing enterprises with a wider range and more diverse forms of external investment.Opening up is China’s basic national policy.Since the implementation of the "the Belt and Road" initiative,it has effectively promoted the economic development and international competitiveness of enterprises and countries.The issue of international double taxation involved in the process of foreign investment by enterprises has received widespread attention.At present,China has adopted the credit method based on its national conditions and the characteristics of the method of reducing international double taxation,and has improved its relevant policies,bringing new rules and choices for Chinese enterprises to invest abroad.In this process,the credit law has indeed played a role in reducing international double taxation.However,from the perspective of implementation and collection and management efficiency,the Credit Law is difficult to promote the further development of China’s foreign investment enterprises.At the same time,changes in tax policies of various countries and international organizations will have an impact on Chinese enterprises’ outward investment.Therefore,the focus of this article is on how to effectively solve international double taxation and promote foreign investment by Chinese enterprises,improve the relevant policies of the Credit Law,Tax Exemption Law,and China’s overseas income tax credit system.This article conducts in-depth research on the basic content of the credit law and the tax exemption law,as well as their impact on external investment by enterprises.Firstly,this article starts with an analysis of the basic theories related to the credit and tax exemption laws,clarifying the concepts,characteristics,and differences between them.Secondly,introduce the domestic and international practices of the Credit Law and Tax Exemption Law,and focus on elaborating on the relevant policies of the Credit Law and Tax Exemption Law in China.This lays the foundation for further comparing the effects and application of the Credit Law and Tax Exemption Law in the next chapter,and analyzing the impact mechanism of the Credit Law and Tax Exemption Law on enterprises’ outward investment.Then,theoretically analyze the impact relationship between the credit law,tax exemption law,and external investment of enterprises.This section first analyzes the impact of the Credit Law and the Tax Exemption Law on the external investment tax payers,and then extends from the impact of the Credit Law and the Tax Exemption Law on the tax payers to the analysis of the change and balance relationship between the Credit Law and the Tax Exemption Law and the tax payers.From the analysis of the favorable effects of the credit and tax exemption laws on enterprises’ foreign investment activities,such as reducing international double taxation,reducing the tax burden on enterprises,and engaging in tax avoidance behaviors,eroding the national tax base,and infringing on national tax interests,we can consider what suggestions should be put forward to avoid these adverse effects in enterprises’ foreign investment activities and the national tax system,Introduce empirical research and propose reform suggestions in the following text.Then,empirical research is used to compare the actual taxes paid by Chinese enterprises for foreign investment under the credit method(non itemized and non itemized by country)and the tax exemption method,and specific cases are used to verify the effectiveness and accuracy of the model.By reviewing the results of tax payments for foreign investment by enterprises under different methods,it was found that the tax exemption method is superior to the credit method in terms of corporate tax burden and ease of collection and management.However,the risk of tax base erosion in implementing the tax exemption method is greater than that of the credit method.Finally,based on the advantages and disadvantages of the credit and tax exemption laws,as well as their impact on external investment activities and tax payers of enterprises.This article proposes reform suggestions for China’s overseas income tax system from three aspects: the specific policy content of the Credit Law and the Tax Exemption Law,and the tax system system,based on China’s national conditions.This includes retaining effective policies for the credit law,optimizing the current credit law and introducing the tax exemption law,establishing a parallel overseas income tax credit system with the two laws,and aligning it with international anti tax avoidance rules.