Tax Risks Of Chinese Enterprises’ Outbound Direct Investment Under The "Belt And Road Initiative"

Since the "Belt and Road Initiative" was put forward,Chinese enterprises and countries along the "Belt and Road Initiative" have seen increasingly close economic and trade ties,gradually opening up a new geopolitical economic landscape and accelerating the process of internationalization.However,risks and challenges arise accordingly.As the tax environment of countries along the "Belt and Road Initiative" is very different,and some enterprises do not have enough awareness of risk prevention,there is also room for improvement in the international tax agreements signed by Chinese government departments,and Chinese enterprises will face greater tax risks when making foreign direct investment.Therefore,this paper,starting from the "Belt and Road Initiative",discusses the tax risks existing in enterprises’ foreign direct investment,tries to summarize experience,and help the implementation of the "Belt and Road Initiative" to promote foreign direct investment of enterprises.In this paper,a large number of literatures related to Chinese enterprises’ direct investment in countries along the Belt and Road and tax risks are consulted by case studies and literature analysis methods,and these achievements are analyzed and integrated to form their own opinions.At the same time,data from the "Going Global" public service platform of the Ministry of Commerce,the official website of the "Belt and Road Initiative" and the website of the State Administration of Taxation are used to summarize the situation of enterprises’ foreign direct investment and the current tax environment of countries along the routes.This paper explores three stages of the most likely tax risks in the process of foreign direct investment,namely the tax risks of research investment preparation stage,investment transaction stage,investment integration stage,and then takes the case of foreign direct investment of the cement industry leading enterprise A and state-owned large oil and gas enterprise D as examples to present the typical tax risks generated during the investment period.There are three main stages of tax risk for FDI as defined in this paper.Tax risks in the investment preparation stage include tax differences,investment organization forms and insufficient tax risks;the tax risks in the investment transaction stage include the tax risks of agreement signing,transfer pricing and financing;and the tax risks in the investment integration stage include the tax risks of intermediary agencies and tax data integration.Tax risk causes can be divided into domestic factors and target countries,so tax risk prevention measures can be refined into suggestions on domestic causes and suggestions on foreign causes.In response to domestic factors,the government can improve its service level and collection capacity by establishing an information transmission mechanism,absorbing a variety of professional tax service personnel and conducting separate tax collection and management for "going out" enterprises.At the same time,we will improve the "Belt and Road Initiative" tax treaty system and sign high-quality tax agreements.Enterprises should enhance the awareness of tax risk prevention,design risk assessment system and equip professional tax personnel;In response to the target country factor,enterprises should adapt to the tax environment of countries along the "Belt and Road Initiative",collect relevant tax-related information,conduct business operations with low tax burden,and finally properly solve tax disputes.Through the joint efforts of the government and enterprises,the tax risks of foreign direct investment can be avoided effectively and a good investment environment can be created.