Empirical Analysis Of How Firm’s Characteristics Impact On The Tax Burden

The tax burden has caught greater attention from the governments and enterprises of all countries around the world ever since a long time ago. In the early1970s, an American scholar named Siegfried who pioneered to analysis the average tax burden of the industry comprehensively; In1982, Stickney and Mcgee conclude that there were positive correlation between the ratio of liabilities and the ratio of tax from evidence; Subsequently, Zimmerman and Porcano had vitrified the firm size is correlated with the effective tax rate one after another, but the two conclusions are polar opposites. Up till this day, the research on the reasonableness of these two opinions has deeply developed.The study on the tax burden of domestic country began in the last century. In1999, Wang Fang chose the mean annual effective tax rate as the statistical induced variable to probe the tax burden of enterprises and concluded the effective tax rate is lower than the apparent tax rate but without sample test; Both Fan Liming and Li Yanxi provided an respective overview on the theory of the practice of foreign tax and the differences of the tax preference between the domestic-funded and foreign-funded corporation; Chen Xiao expressed the tax competition by using the effective tax rate as the induced variable; Xi Weiqun、Zhang Caiying、Zhou Ali and others were all on the basis of extensive research to dissect the relationship between the firm characteristics and the effective tax rate from their own perspectives. Therefore, compared with western developed countries, the start of studies about the tax burden of domestic is later and in the meantime, the studies particular emphasis on theory level so that empirical study level is relatively weak. On December6th,2007, state council issued "Implementation Regulations of the PRC Enterprise Income Tax" which had been implemented since January1st,2008. In the same year, the state council department in charge issued enterprise income tax preferential policies, management practices and other supporting high-tech enterprise income tax regulations. There has been a cutback from33%to25%.By way of studying theory and literature, at the same time, using the methods by which when the developed countries researched on the tax burden as a source of reference. Moreover, according to current national tax policy, this paper raises hypotheses based on the perspective of firm characteristics, selects the firm characteristics in a financial category as independent variables, including firm size, asset-liability ratio, capital intensity, profitability, research and development expenses. Meanwhile, it selects the effective tax rate as induced variable and then modeling activity. Using SPSS statistical software to perform Regression analysis by drawing the748listed firms which didn’t only offer A shares publicly in Shanghai and Shenzhen Stock Exchange from2007to2010, but also had traded for four consecutive years as samples. Carefully contrast with the differences between the regression consequences resulted from the reform of the tax rate in order to find out firm characteristics domestic which are impacting the tax burden. Conclusions are as follows: First, firm size positively correlates with the effective tax rate; Second, asset-liability ratio negatively correlates with the effective tax rate; Third, capital intensity positively correlates with the effective tax rate; Fourth, profitability negatively correlates with the effective tax rate; Fifth, research and development expenses negatively correlates with the effective tax rate.