{"title":"Did the anti-avoidance rules curtail the profit shifting of foreign multinationals in China?","authors":"Mantian Xue","doi":"10.1016/j.chieco.2024.102299","DOIUrl":null,"url":null,"abstract":"<div><div>This paper analyzes the policy effect of the anti-avoidance rules introduced on January 1, 2008 on profit shifting of foreign multinationals in China. Based on micro data from the OSIRIS database, this paper finds that the anti-avoidance rules were quite effective in curbing profit shifting of foreign multinationals through raising the pre-tax margin of subsidiaries in China relative to those outside China by about 6.5 percentage points, or about 7.6 percentage points considering the anticipation effect. Besides, the results indicate that the anti-avoidance rules were more effective for multinationals in service industries or those registered in non-haven countries.</div></div>","PeriodicalId":48285,"journal":{"name":"中国经济评论","volume":"88 ","pages":"Article 102299"},"PeriodicalIF":5.2000,"publicationDate":"2024-11-03","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"中国经济评论","FirstCategoryId":"96","ListUrlMain":"https://www.sciencedirect.com/science/article/pii/S1043951X24001883","RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q1","JCRName":"ECONOMICS","Score":null,"Total":0}
引用次数: 0
Abstract
This paper analyzes the policy effect of the anti-avoidance rules introduced on January 1, 2008 on profit shifting of foreign multinationals in China. Based on micro data from the OSIRIS database, this paper finds that the anti-avoidance rules were quite effective in curbing profit shifting of foreign multinationals through raising the pre-tax margin of subsidiaries in China relative to those outside China by about 6.5 percentage points, or about 7.6 percentage points considering the anticipation effect. Besides, the results indicate that the anti-avoidance rules were more effective for multinationals in service industries or those registered in non-haven countries.
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The China Economic Review publishes original works of scholarship which add to the knowledge of the economy of China and to economies as a discipline. We seek, in particular, papers dealing with policy, performance and institutional change. Empirical papers normally use a formal model, a data set, and standard statistical techniques. Submissions are subjected to double-blind peer review.
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