The Effect Of Internal Control On Tax Avoidance Under Different Nature Of Property Rights

Since the beginning of this century,more and more enterprises have begun to pay more and more attention to tax planning in order to realize the principle of maximizing profit.Tax planning refers to the economic benefit of the tax in the scope of the provision of the law by planning and arranging the operation,investment and financial activities.As an important means of tax planning,tax avoidance has attracted the attention of academic and practical circles.Unlike tax evasion,tax avoidance activities,although contrary to the original intention of the tax code,do bring more economic benefits to companies without breaking the law.But the tax avoidance activities will also bring the enterprise certain tax risk,thus,there is need to create a series of perfect enterprise internal system to make risk control within a certain range in order to keep the balance of risks and benefits.Internal control,it refers to a series of control activities practiced by the board of directors of the enterprise,management and staff,good internal control will promote the enterprise to implement the compliance,reports and business goals.Since the Enron incident,people have been fully aware of the importance of internal control.In July,2002,President Bush signed the most far-reaching reform bill"Sarbanes Oxley Act",and then,the five ministries and commissions including the Ministry of Finance in our country introduced the Chinese version of the SOX act,hereinafter referred to as the enterprise internal control basic norms,requires public companies to implement strict internal control system,which means that the integration of the international advanced experience and the formation of the system of internal control in China,more and more enterprises begin to comply with the requirements of this specification,to establish a suitable internal control system for enterprise,including a series of measures to reach the goal of increasing after-tax earnings.In addition,as the transformation of the world's largest economy,there is a unique economic system in our country,almost two-thirds of enterprises in the capital market in our country are controlled by the government and the state-owned assets supervision and administration at all levels,this is to say,government intervention is serious,business goals and daily activities in such enterprises have produced a certain degree of alienation.On the one hand,the enterprises controlled by the government pay more attention to assume social responsibility,including tax actively in order to make sure of the government's fiscal income source:on the other hand,due to a dominant phenomenon existing,the establishment of internal control may sometimes become a mere formality,which leads to that the implementation of tax planning system is not efficient,moreover,leads to the heavy tax burden of state-owned enterprises.At present the research results about corporate tax avoidance of scholars in our country research is rich,but because the development of internal control system of our country is relatively late,the research on internal control and avoidance is relatively limited,let alone,the research about the internal control,enterprise property rights and corporate tax avoidance is rare,this article starts from the perspective of corporate tax,further studys the relationship between property rights,internal control,and tax avoidance of the relationship.Based on the research sample of A-share listed companies from 2013 to 2015,the following conclusions are drawn from the logic regression method,which is:the more perfect the internal control,the less the burden of the enterprises will bore.Compared with state-owned enterprises,private enterprises have a higher scale of tax avoidance.The improvement of internal control has a more obvious effect on state-owned enterprises when reducing their own tax burden.The innovation of this paper is as follows:(1)Focus on the relationship between internal control and corporate tax avoidance activities.Tax planning is not done by individuals.Instead,it's through the cooperation between departments,it requires effective internal control to restrain collective behavior.(2)Take property rights into consideration.In view of the unique economic system in China,the research and analysis of the relationship between the nature of enterprises and tax avoidance have enriched the literature on the relationship between property right and corporate tax avoidance to some extent.(3)In the current domestic academic circles,there has been no study which focuses on the influence of property rights on the relationship between the validity of internal control and tax avoidance.Based on this,this paper in the beginning tries to explore the nexus between tax avoidance and internal control validity,property rights respectively,and then discusses whether the nature of property rights will affect the nexus between the validity of internal control and tax avoidance.The study enriches the investigations of the relationship between internal control and corporate tax,and has certain theoretical significance in the view of the specific system in China,providing a new angle for the study between internal control and tax avoidance.