Multinational corporations (MNCs) around the globe commonly use cross-border related-party transactions (CRPTs) to shift profits from high tax jurisdictions to low ones to avoid paying taxes. The Organization for Economic Co-operation and Development and G20 countries launched the Base Erosion and Profit Shifting (BEPS) Action Plans in 2013 to constrain tax avoidance behaviors of MNCs, particularly the widespread use of CRPTs. This study examines how the localization of the BEPS Action Plans affects the tax avoidance behavior of MNCs in China. Using all the listed non-financial MNCs on the Stock Exchanges in China from 2012 to 2017, I find that: (1) Chinese MNCs with more CRPTs are more likely to pay less taxes than those with less CRPTs. Localization of the BEPS Action Plans does not have significant impact on this behavior. (2) The effect of localization of BEPS Action Plans to constrain corporate tax avoidance is more pronounced on MNCs with relatively poor information quality in the pre-location period; (3) local government-controlled firms (LG firms) with more CRPTs engage in more tax avoidance, but localization of the BEPS Action Plans significantly constrains tax avoidance activities by these firms in the post-location period. These findings should shed light on what mechanisms could constrain MNCs’ tax avoidance, especially income shifting through CRPTs, and how it could be affected by tightening of the tax laws on tax avoidance activities and by ownership structure in a developing country setting, in particular.

published_or_final_version / Business / Doctoral / Doctor of Philosophy

by Mo Wai-bun. / Thesis (M.B.A.)--Chinese University of Hong Kong, 1990. / Bibliography: leaf 52. / ABSTRACT --- p.ii / TABLE OF CONTENTS --- p.iii / ACKNOWLEDGEMENTS --- p.v / Chapter I . --- INTRODUCTION & METHODOLOGY --- p.1 / The Scope of Inland Revenue Ordinance --- p.1 / Lialility to Profits Tax --- p.2 / "Carrying on Trade, Profession, or Business" --- p.2 / Profits Arising in or Derived from Hong Kong --- p.4 / A Conceptual Perspective of Tax Planning --- p.5 / Purpose of the Research --- p.7 / Methodology --- p.8 / Structure of the Research Report --- p.9 / Chapter II. --- THE USE OF SERVICE COMPANY FOR A PARTNERSHIP --- p.10 / Introduction --- p.10 / Purpose --- p.10 / Structure --- p.11 / Taxation --- p.13 / Operation of Banking Arrangements --- p.14 / Accounting Treatment of the Scheme --- p.15 / Determination of the Director's Salary --- p.16 / Tax Savings --- p.18 / Summary --- p.19 / Chapter III. --- REINVOICING AND THE TAXATION OF SALES PROFITS --- p.21 / Introduction --- p.21 / Background --- p.21 / The Uncertainty from Sinolink --- p.23 / The Reinvoicing Paradox --- p.24 / Tax Planning Structure of Reinvoicing Companies --- p.26 / Chapter IV. --- THE USE OF OFF-SHORE COMPANIES TO ELIMINATE PROFITS TAX ON SALES --- p.29 / Introduction --- p.29 / Background --- p.29 / Hong Kong Profits Tax Implications of Current Operations --- p.30 / A Tax Efficient Structure --- p.31 / Operation Procedures under the Proposed Structure --- p.32 / Place of Incorporation of Offshore Company --- p.35 / Jersey --- p.35 / Background --- p.35 / Incorporation --- p.36 / Taxation --- p.36 / Isle of Man --- p.36 / Background --- p.36 / Incorporation --- p.37 / Taxation --- p.37 / Implementation --- p.37 / Costs --- p.38 / Hong Kong Tax Implications of the Activities of Off-Shore Companies --- p.38 / Honf Kong Tax Implications of the Activities of HK Cos --- p.40 / PRC Implications --- p.40 / Summary --- p.41 / Chapter V. --- CONCLUSION --- p.42 / APPENDICES --- p.43 / Chapter 1 . --- Contract for Services --- p.44 / Chapter 2. --- Employment Agreement --- p.46 / Chapter 3. --- Expense Report Format --- p.51 / BIBLIOGRAPHY --- p.52

by Ko Kwok-Wai & Wong Man-Fai. / Thesis (M.B.A.)--Chinese University of Hong Kong, 1992. / Includes bibliographical references (leaves 110-113). / ABSTRACT --- p.ii / TABLE OF CONTENTS --- p.iv / ABBREVIATIONS --- p.vi / Chapter / Chapter I. --- INTRODUCTION --- p.1 / Objectives of the Study --- p.2 / Limitations of the Study --- p.3 / Methodology of the Study --- p.4 / Chapter II. --- A REVIEW OF TAX PLANNING TECHNIQUES USED IN HONG KONG COPORATIONS --- p.6 / Sourcing Profits of Hong Kong Corporation offshore --- p.7 / Structuring Receipts to be of Capital Nature --- p.17 / Increasing allowable deduction --- p.19 / Deferring the Payment of Tax --- p.25 / Diversion and Extraction of Income --- p.26 / Treaty Shopping --- p.29 / Chapter III. --- HONG KONG TAX AUTHORITY'S POLICY TOWARDS TAX PLANNING --- p.33 / Anti-avoidance Legislation --- p.33 / Tax Authorities General Attitude and Policy towards Tax Planning Activities --- p.43 / Chapter IV. --- CORPORATE MANAGEMENT'S ATTITUDE TOWARDS TAX PLANNING ACTIVITIES --- p.45 / Tax Planning in 1970's --- p.45 / Tax Planning in early 1980's --- p.46 / Tax Planning in late 1980's to 1990's --- p.47 / Chapter V. --- DEVELOPMENT OF TAX ADVISORY SERVICES IN HONG KONG --- p.50 / Tax Advisory Services in 1970's - Infant stage --- p.50 / Tax Advisory Services in early 1980's - Growth Stage --- p.51 / Tax Advisory Services in late 1980to1990's - Mature Stage --- p.52 / Chapter VI. --- SOME EMPIRICAL ANALYSIS --- p.55 / Objectives --- p.55 / Methodology --- p.55 / Limitations --- p.57 / Findings and Conclusions --- p.57 / Chapter VII. --- CONCLUSIONS --- p.70 / Future Orientation of Tax Planning Activities in Hong Kong --- p.70 / Further Comments --- p.72 / APPENDIX --- p.74 / BIBLIOGRAPHY --- p.110