Tax avoidance through re-imports: The case of redundant trade
Many countries have participated in re-imports, a type of round-trip trade originating from a country and back to the same country. China, as the largest re-importer, has imported more from itself than from the U.S. since 2005. As the first empirical study on re-imports, this paper shows that China's re-imports are at least partially driven by the imperfection of the value-added tax (VAT) rebate policy for processing trade. In principle, firms should be able to claim input VAT credits after selling their finished products in China, or receive input VAT rebates after exporting their products. Some processing firms, however, are not qualified for the credits or rebates when selling in China; hence, they may export their products to obtain rebates. Some downstream processing firms can benefit from re-importing these products duty-free as inputs because they cannot obtain the rebates when buying inputs in China even after exporting their final goods.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Kei-Mu Yi, 2010.
"Can Multistage Production Explain the Home Bias in Trade?,"
American Economic Review,
American Economic Association, vol. 100(1), pages 364-93, March.
- Kei-Mu Yi, 2008. "Can multi-stage production explain the home bias in trade?," Working Papers 08-12, Federal Reserve Bank of Philadelphia, revised 01 Nov 2008.
- Koopman, Robert & Wang, Zhi & Wei, Shang-Jin, 2012. "Estimating domestic content in exports when processing trade is pervasive," Journal of Development Economics, Elsevier, vol. 99(1), pages 178-189.
- Fisman, Raymond & Wei, Shang-Jin, 2001.
"Tax Rates and Tax Evasion: Evidence from 'Missing Imports' in China,"
CEPR Discussion Papers
3089, C.E.P.R. Discussion Papers.
- Raymond Fisman & Shang-Jin Wei, 2004. "Tax Rates and Tax Evasion: Evidence from "Missing Imports" in China," Journal of Political Economy, University of Chicago Press, vol. 112(2), pages 471-500, April.
- Raymond Fisman & Shang-Jin Wei, 2001. "Tax Rates and Tax Evasion: Evidence from "Missing Imports" in China," NBER Working Papers 8551, National Bureau of Economic Research, Inc.
- Ferrantino, Michael J. & Liu, Xuepeng & Wang, Zhi, 2012. "Evasion behaviors of exporters and importers: Evidence from the U.S.–China trade data discrepancy," Journal of International Economics, Elsevier, vol. 86(1), pages 141-157.
When requesting a correction, please mention this item's handle: RePEc:eee:deveco:v:104:y:2013:i:c:p:152-164. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.