Date of Submission
Campus Only Senior Thesis
Bachelor of Arts
© 2019 Xiaoshi Zhu
This paper examines the effect of Business Tax to Value-Added Tax Reform (B2V Reform) of 2016 on the tax burden and research and development activities of High and New Technology Enterprises (HNTEs) in China. The initial hypothesis is that the B2V reform decreases tax burdens and encourages R&D activities of HNTEs. After analyzing the data from the Shanghai Stock Exchange High and New Technology Enterprise Index, however, it is found that the Reform does not significantly affect either the tax burdens or the R&D activities. Subsequent research reveals several explanations for the discrepancy, including firms’ labor-heavy capital structures for which labor costs do not qualify for value-added tax deductions as well as the issue of unused tax deductions from fixed asset purchases. This study informs policy makers how to revise and improve the reform to benefit high-tech companies with labor-intensive capital structures and others with significant upfront investment costs.
Zhu, Xiaoshi, "The Effect of Business Tax to Value-Added Tax Reform on Tax Burdens and R&D Investments of the High and New Technology Enterprises in China" (2019). CMC Senior Theses. 2240.
This thesis is restricted to the Claremont Colleges current faculty, students, and staff.