Research On The Impact Of Tax Differences In RCEP Countries On China’s Foreign Direct Investment

In 2012,the ten ASEAN countries launched the Regional Comprehensive Economic Partnership Agreement(RCEP).On November 15,2020,China,Japan,South Korea,Australia,and New Zealand officially signed an agreement with the ten ASEAN countries.RCEP covers a population of about 2.27 billion,accounting for about 33% of the world’s total gross national product,and exports account for 30% of the world’s total.As the world’s largest free trade agreement with the largest population,the most diverse member structure,the largest economic and trade scale,and the largest development potential,the entry into force of RCEP has created new opportunities for deepening regional cooperation,and injected strong impetus into deepening regional cooperation.However,there are significant disparities in economic development among RCEP countries,as well as different tax and business environments,which hinder Chinese enterprises from investing in other countries.Among them,differences in tax factors among countries can have an impact on China’s foreign direct investment.Therefore,this article analyzes the differences in tax factors in the remaining 14 member countries of RCEP except China,in order to explore the impact of differences in corporate income tax and related tax factors such as tax treaties on China’s foreign direct investment.First of all,this article sorts out relevant tax factors such as corporate income tax and tax treaties,as well as relevant theories of foreign direct investment,and clarifies the mechanism of the role of relevant tax factors such as corporate income tax and tax treaties in foreign direct investment.Secondly,this article analyzes the current situation of China’s investment in RCEP countries from both the overall and country specific perspectives.Through comparing the differences in tax factors in RCEP countries,it is found that there are significant differences in corporate income tax rates and tax treaty content in RCEP countries.The analysis results show that the differences mainly reflect in the following aspects: corporate income tax rates,tax preferences,tax treaties,tax credits,and tax concessions.In order to study the impact of tax factors on foreign direct investment,this paper selects relevant data on China’s foreign investment in RCEP countries and differences in tax factors from 2010 to2021,and takes into account the impact of RCEP countries’ economy,labor force,resource endowment,market openness,and governance level.An empirical analysis is conducted.The empirical results show that corporate income tax rates,tax treaties,The differences in tax concessions all have an impact on China’s direct investment in RCEP countries,indicating that these three tax factors affect China’s enterprises’ foreign direct investment.Finally,based on empirical analysis,this article suggests accelerating the coordination of corporate income tax between China and other countries;Improve China’s tax treaties with other RCEP countries;Strive to do a good job in providing services for Chinese enterprises to conduct foreign direct investment in RCEP countries,so as to promote China’s foreign direct investment in RCEP partner countries,and enable Chinese enterprises to better "go global".