Chinese companies in tax havens

Noam Noked and Jingyi Wang

Journal of International Economic Law, 2024, vol. 27, issue 3, 521-537

Abstract: 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 Chinese residents for tax purposes. This position provides these MNEs tax advantages at the corporate and shareholder levels. We analyse the tax residence positions of the largest 79 Chinese MNEs with tax-haven-incorporated parent companies that are traded on major US stock exchanges. Our analysis of disclosures in these companies’ annual reports reveals that all of these companies reported that they are not resident enterprises for Chinese tax purposes. We then explore the expected implications of the global minimum tax on these MNEs, which will be affected by the non-resident status of their ultimate parent entities. The global minimum tax may reduce, but not eliminate, the tax advantages of these MNEs’ non-resident status.

Date: 2024
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