Impact of Round-tripping FDI on Tax Avoidance of Enterprises

Abstract

As a part of enterprise strategy, round-tripping FDI has a far-reaching impact on tax avoidance. Enterprises aim to minimize the tax burden by redistributing capital, optimizing the global business structure and adjusting the location of economic activities. This strategic choice has spawned a variety of complex mechanisms in the international tax environment, and its influence involves tax competition, tax evasion theory, transfer pricing and intellectual property rights on a global scale. These incentives can attract enterprises to bring their overseas profits back to their home countries by reducing their operating costs and improving their competitiveness, thus achieving economic growth and increasing employment opportunities. Generally speaking, the impact of round-tripping FDI on corporate tax avoidance is reflected in many levels. By optimizing the global business structure, flexibly using intellectual property rights and adjusting the transfer pricing strategy, enterprises skillfully use the international tax environment to maximize economic benefits. At the same time, the state provides positive support for enterprises through economic incentives, which reduces the tax burden of enterprises in the domestic economy and promotes the development and innovation of domestic industries.