An Empirical Study of International Tax Avoidance and International Trade - The Case of Taiwan

• Main Authors: Yu-shan Liu, 劉宇珊
• Other Authors: Kung-Cheng Lin
• Format: Others
• Language: zh-TW
• Published: 2007
• Online Access: http://ndltd.ncl.edu.tw/handle/88913595240653673743

碩士 === 逢甲大學 === 財稅所 === 95 === Multinational enterprises increase as international business and international cooperation increase. Under the pursuit of profit maximization, the goal of an enterprise is to increase revenue, lower cost, and increase the market competitiveness. Tax is one of the costs of an enterprise. In a country, enterprises can reduce the tax burden through legal tax planning. Among countries, the tax planning scheme of multinational enterprises is so called “international tax avoidance.” Because the difference in every country’s taxing administration and system, transnational taxpayers utilize these differences in the tax law loopholes to minimize their tax burden. Hence, in order to pursuit the profit maximization, a multinational enterprise will consider the different tax system in each country and choose the best investment environment to minimize the tax burden. The purpose of this study is to investigate how tax burdens affect the Taiwan (source country) transnational enterprises to invest on foreign subsidiaries of 4 countries, i.e. Mainland China, Thailand, Indonesia, and Singapore. Based on the period of 1994~2005, we examine this study by evaluating how the tax burden and other factors affect Taiwan transnational enterprises’ intra-firm trade. This study considers three effects of tax inducing investment. Empirical results show that tax burdens have no significant impact on Taiwan transnational enterprises’ intra-firm trade based on the hypothesis of quantity and location effects. However, based on the hypothesis of price effect, the result shows a significant impact of tax burden on Taiwan transnational enterprises’ intra-firm trade balance.