Date of Award

2013

Document Type

Thesis

Degree Name

Bachelors

Department

Social Sciences

First Advisor

Coe, Richard

Keywords

China, Tax Havens, Investment Development Path, Tax Morale, Economics

Area of Concentration

Economics

Abstract

A very large percentage of Chinese outward FDI is being sent to countries labeled as "tax havens," such as the Cayman Islands, the British Virgin Islands, and Hong Kong, and this has been true since the early 2000s. This paper uses the theory of tax morale to recommend institutional improvements to encourage Chinese corporations and individuals to pay their taxes. Building on the failures of many countries to develop functioning Tax Information Exchange Agreements and the idea of incentive structures this paper recommends China engage in a multilateral TIEA with its two major havens which involves extensive amounts of information sharing and large payouts for the information. This paper also suggests that China imitate the U.S.A.'s new FATCA bill which taxes foreign institutions for non-compliance with information sharing requirements. The Investment Development Path theory is used to support the idea that OFDI flows may increase greatly very soon, and so policy improvements with respect to OFDI should be of a high priority.

Rights

The author has granted New College of Florida the nonexclusive right to archive, make accessible, and distribute for educational purposes this work in whole or in part in all forms of media, now or hereafter known. The copyright of this work remains with the author.

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