Tax Incentive Policies For Overseas Investment Research

In the late 1990s, the stratagem of "going out" was put forward in China to achieve the integration of "coming in" and "going out", in order to enhance the levei of opening up. It was brought forward on the 16th national congress of the CCP that encouraging and supporting those firms with comparative advantages to invest abroad to spur commodity and service export and shape a few multinational corporations and famous brands. After the establishment of the "going out" policy, it becomes an urgent problem to devise and implement some measures to encourage Chinese firms to invest abroad. The purpose of this thesis is: how to construct the system of tax incentive policy for overseas investment, which conforms to international convention and adapts to the condition of China, to meet the demands of encouraging overseas investment. Surrounding this purpose, this thesis is divided into five parts.The first part discusses the necessity and probability of supporting Chinese firms to invest abroad. This part determines the value of this thesis. Firstly, the theory of comparative advantage is the base of developing overseas investment of China. It does not necessarily have to possess absolute advantages for a country to invest abroad. If only it holds some comparative advantages, it can make overseas investment. Secondly, illustrate the necessity to invest abroad confronting the fact that domestic development is short of capital. In the long run, overseas investment has great benefit on our economy. Finally, the probability of supporting overseas investment is studied. Some comparative advantages of our firms determine that there is opportunity for them to participate in international competition, while the increase of fiscal revenue makes it possible for the government to support overseas investment by means of a series of tools.The second part studies tax incentive policy and its stimulation effect on overseas investment. First of all, introduce the definition and tools of tax incentive policy and make theoretical analysis and impersonal evaluation on it. Next, expatiateon the economic base and detailed manifestation of the relation between tax and overseas investment. With the help of the Hartman Model, we come to the conclusion that tax policy of the inhabitation country has some effect on the investment decision of immature subsidiary company. Therefore, Chinese government has much to do to encourage its overseas investment.The third part centers on the defects of the actual tax policies related to overseas investment in China. In the first place, general situation of the overseas investment of China is supplied. With the absence of government support for a long period of time, overseas investment of China is small in amount and has some problem. In the next place, the actual tax policies related to overseas investment in China are briefly introduced. Lastly, analyze in detail the defects of these policies, including problems in income tax and tax agreement, and point out that these policies cannot direct firms to invest in the right areas.The fourth part introduces briefly some tax incentive policies that have been carried out in other countries of the world. First, present some policies of several developed countries and new-industrialized countries or regions. Second, summarize these policies to educe the general policy tools, including measures on income tax and tariff.The last part is the core of this thesis. It probes into the problem of how to add, delete or revise the actual tax policies to construct a tax incentive policy system for overseas investment. Above all, the principle of this construction is provided. Next, detailed measures on income tax, tax agreement and tariff are designed and the direction effect of these measures is emphasized. In the end, point out some problems that should be paid attention to in the construction process and list briefly some other policy resorts exclusive of tax.