Tax Evasion through Trade Intermediation

Liu, Xuepeng; Shi, Huimin; Ferrantino, Michael

Tax Evasion through Trade Intermediation | Evidence from Chinese Exporters

2015

Liu, Xuepeng | Shi, Huimin | Ferrantino, Michael

Many production firms use intermediary trading firms to export indirectly. This paper uses Chinese export data at the transaction level to investigate the tax evasion motive through indirect trade. The paper provides strong evidence that, under Chinas partial export value-added tax rebate policy, production firms can effectively evade value-added taxes by underreporting their selling prices to domestic intermediary trading firms, especially when they sell differentiated products. Even for a moderate level of underreporting, the revenue loss is close to one billion U.S. dollars. The paper also finds that such underreporting behavior through domestic intermediaries may be associated with cross-border evasion through underreporting export values to foreign partners. In addition, the results indicate that the evasion motive is stronger for larger transactions.

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Ключевые слова АГРОВОК

accounting agriculture barter budget consumers contracts credit development economics domestic markets dumping economics elasticity equipment equity expenditure exports finance fixed costs globalization growth rate incentives income tax inputs instrument international bank international trade inventories investment liabilities liquidity markets microstructure ownership prices pricing product quality production products property public finance purchasing retail sales surplus tariffs taxation taxes trade trade liberalization value added welfare wto

Библиографическая информация

Издатель

World Bank, Washington, DC

Другие темы

Financial crisis; Goods; Share; Checks; Tax benefit; Transactions; Value; Export performance; Guarantee; Political economy; Middleman; Trade regime; Product differentiation; Benchmark; Price level; Rebate; Double taxation; Exporters; Price; Issuance; Theory; Exchange; General equilibrium analysis; Budget constraint; Homogeneous goods; Wholesalers; Federal reserve; Reserve bank; Small business; Trade regimes; Return; Trading; Tax rate; Development policy; Tax incentives; Export growth; Competitiveness; Check; Expected value; Market size; Market microstructure; Equilibrium analysis; Dummy variable; Average price; Contract; Guarantees; Shares; Tax rates; Interest; Criteria; Middlemen; Default; Tariff; Foreign markets; Local governments; Export share; Developing country; Rebates; Adverse selection; Global economy; Finished products; Profits; Market; Federal reserve bank; Contract enforcement; Export shares; Exporter; Foreign market; Transaction; Positive coefficient; Influence; Revenue; Elasticity of substitution; International economics; Reserve; Variables; Tax; Ownership structure; Product; Economies of scope; Comparative economics; Exchanges; Substitution

Язык

Английский

Тип

Working Paper; Text; Working Paper

В АГРИСе с: 2016-03-15

Формат: AGRIS AP

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Tax Evasion through Trade Intermediation | Evidence from Chinese Exporters

2015

Ключевые слова АГРОВОК

Библиографическая информация