Alibaba and Baidu are frequently referred to as the "Chinese Amazon" and the "Chinese Google." However, these companies and many other Chinese multinational enterprises (MNEs) take the position that they are not resident enterprises for Chinese tax purposes. This position has afforded these MNEs substantial tax advantages as they can accumulate untaxed profits in tax havens. This seminar analyzed the tax position of such Chinese MNEs from legal, empirical, comparative, and policy perspectives.
We examined the legal basis of this tax position and the advantages it provides. We presented our analysis of the tax residence positions of the largest 80 Chinese MNEs with tax-haven-incorporated parent companies traded on major U.S. stock exchanges. Our comparative analysis showed how other large economies implement tax measures to prevent their companies from avoiding taxation in similar situations. We considered the expected implication of the global minimum tax on Chinese MNEs with tax-haven-incorporated parent companies and explored potential reforms.
