Did tax treaties restrain the profit shifting of Chinese multinationals?
摘要
The Chinese government has been worrying about the outflow of profit of the multinational corporations. Using data from various sources, this paper evaluates the inhibitory effect of bilateral tax treaties on profit shifting behavior of Chinese multinationals. The paper finds strong evidence for profit shifting out of China due to corporate tax differences, as well as statistically significant inhibitory effect of tax treaties. Besides, the profit shifting activities mainly exist in non-manufacturing industries.