Income tax liability for large corporations in China: 1998-2007
Purpose - The purpose of this paper is to examine long-term income tax liability for Chinese public corporations from 1998 to 2007. It also studies the factors that are associated with Chinese firms' long-run effective tax rates. Design/methodology/approach - The paper uses the measurement of long-run effective tax rate, developed by Dyreng Findings - The paper's findings are: ten-year effective tax rates are considerably lower than the statutory tax rate; ten-year effective tax rates vary significantly across industries and geographic areas; profitability, firm size, capital structure, and capital intensity are all associated with ten-year effective tax rates; corporate ownership structures, i.e. tradable vs non-tradable shares, are related to ten-year effective tax rates. Research limitations/implications - Given that corporate ownership has changed dramatically in China in recent years, future studies should be conducted to explore the association between effective tax rates and ownership changes. Practical implications - The paper is of interest to the policy makers, corporate managements, and academics, who seek to examine corporate income tax burden and the factors associated with tax rates over the long term. Given that corporate ownership has changed dramatically in China in recent year, future studies should be conducted to explore the association between effective tax rates and ownership changes. Originality/value - The paper differs from Dyreng
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Volume (Year): 18 (2010)
Issue (Month): 3 (September)
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References listed on IDEAS
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- Roy W. Bahl & Richard M. Bird, 2008. "Tax Policy in Developing Countries: Looking Back and Forward," Working Papers Series 13, Rotman Institute for International Business, Joseph L. Rotman School of Management, University of Toronto, revised May 2008.
- Lammersen, Lothar, 2002. "The Measurement of Effective Tax Rates: Common Themes in Business Management and Economics," ZEW Discussion Papers 02-46, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
- Roger Gordon & Laura Kalambokidis & Joel Slemrod, 2003. "A New Summary Measure of the Effective Tax Rate on Investment," NBER Working Papers 9535, National Bureau of Economic Research, Inc. Full references (including those not matched with items on IDEAS)
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