Online from: 1992
Subject Area: Accounting and Finance
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|Title:||Income tax liability for large corporations in China: 1998-2007|
|Author(s):||Tao Zeng, (School of Business and Economics, Wilfrid Laurier University, Waterloo, Canada)|
|Citation:||Tao Zeng, (2010) "Income tax liability for large corporations in China: 1998-2007", Asian Review of Accounting, Vol. 18 Iss: 3, pp.180 - 196|
|Keywords:||Capital structure, China, Income tax, Large enterprises|
|Article type:||Research paper|
|DOI:||10.1108/13217341011089612 (Permanent URL)|
|Publisher:||Emerald Group Publishing Limited|
|Acknowledgements:||The author acknowledges that financial support for the research was received from CA/Laurier Research Centre.|
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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