Taxation of State-Owned Enterprises A Review of Empirical Evidence from China

Wei Cui

in Regulating the Visible Hand?

Published in print December 2015 | ISBN: 9780190250256
Published online November 2015 | e-ISBN: 9780190250287 | DOI:
Taxation of State-Owned Enterprises A Review of Empirical Evidence from China

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This chapter reviews empirical evidence from China that bears on the general theory of the income taxation of state-owned enterprises (SOEs). Prior theoretical literature has offered three conflicting views of SOE taxation. The first is that SOE taxation is superfluous, because the government shareholder can simply demand profit distributions from the firms. The second is that SOE taxation is necessary to put state-owned and private firms on an equal competitive footing. The third view holds that the significance of SOE taxation lies in the fact that SOE managers, like managers of private firms, are dividend averse; in the absence of other effective mechanisms to secure adequate payout, SOE taxation serves the purpose of forcing distributions. The chapter shows that recent advanced accounting research on Chinese listed companies augments already strong historical and legal evidence that supports the third view.

Keywords: SOEs; SOE taxation; state-owned enterprises; tax policy

Chapter.  11220 words. 

Subjects: Comparative Law

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