Research On Tax Risk Management Of Chinese Enterprises' Foreign Contracted Projects

With the development of China's reform and opening-up process,China's foreign contracted project business has been promoted and expanded.The contracting mode has also experienced a variety of ways from the transformation from the traditional contracting mode to the EPC general contracting mode,and then to the BOT financing mode.In order to properly control risks and reduce project costs.In the context of internationalization,tax risk management of projects is particularly important.First,enterprises need to conduct cross-border operations for overseas contracting projects,which will result in the tax liability of multiple countries.However,there are differences between tax systems of different countries,so it is difficult for enterprises to get familiar with the provisions of tax systems of countries.Secondly,the rise of international business makes countries more aware of tax jurisdiction.Countries should generally improve their domestic tax systems,strengthen cooperation against tax avoidance,and gradually pay more attention to the tax revenue of cross-border enterprises.Finally,the impact of enterprise tax law violation increases.On the one hand,it increases enterprise tax cost and reduces project income.On the other hand,it may slow down the progress of the project,cause breach of contract and damage the corporate image.Therefore,China's foreign contracting enterprises should take reasonable and effective measures to control project tax risks and ensure the smooth implementation of the project.This paper mainly adopts the literature research method and the case study method,in order to comprehensively analyze the tax related issues of enterprises under the traditional contract mode,EPC general contract mode and BOT mode from the perspective of the life cycle of the project.At the entering stage of the project,the enterprise should have a preliminary understanding of the overall tax risks of the project,and consider tax factors in the establishment of institutions and signing of contracts.In the construction stage of the project,the enterprise needs to legally and legally perform its daily tax obligations in the project host country.Meanwhile,the tax burden can also be reduced by means of contract splitting.The operation stage of the project mainly focuses on the BOT mode.The feasibility gap subsidy and the ownership of project assets will affect the tax burden of the enterprise at this stage.Inthe exit stage of the project,profit repatriation and institution write-off are important issues that may generate tax risks.After analyzing the tax-related issues under each mode,with the help of China and Cambodia Kamchay hydropower station project and the Cambodian tax system,this paper analyzes the tax risks and management measures faced by the project companies.Finally,combined with theory and practice,this paper puts forward suggestions on tax risk management of enterprises' foreign contracted projects,and tries to provide ideas for Chinese enterprises' foreign contracted projects to effectively control tax risks and maintain good cooperation with the host country.