A Study of How Tax Treaty and Tax Reform Effect Equity FPI in China

• Main Author: 梁雅筑
• Other Authors: 何怡澄
• Format: Others
• Language: zh-TW
• Online Access: http://ndltd.ncl.edu.tw/handle/59eu7w

碩士 === 國立政治大學 === 會計研究所 === 102 === Since Global Financial has grown rapidly, how countries develop their financial markets and economics by abstract foreign portfolio investment (FPI) through international tax treaty and tax policy has become an important issue. And this study examines the relationship between tax treaty and tax reform to FPI, in order to see how taxation effects foreign investors’ investment decisions. This study derives the hypothesis that Enterprise Income Tax Law of the People’s Republic of China of 2008 should lead to a portfolio reallocation by foreign investors toward equities in tax-favored countries. An analysis that compares foreign equity holdings in treaty and un-treaty countries with China finds a substantial portfolio reallocation toward the former. The empirical results of the study indicates that after the tax reform of 2008 in china, treaty countries have more incentive than un-treaty countries to increase their FPI toward equities due to their lower dividends tax rates. And this result suggests that tax treaty and tax reform have an impact on FPI investors’ decisions.