On the morning of June 8, the 12th issue of 2023 (the 173rd issue in total) DUFE·Accounting and Finance Forum was held on Tencent Meeting online as scheduled, and this forum invited Associate Professor Liangliang Wang from Southeast University. Associate Professor Liangliang Wang shared an academic paper entitled "Tax Consolidation Restrictions and the Effective Tax Rates of Business Groups" with attending teachers and students.
The report by Associate Professor Liangliang Wang starts from the origin of the consolidated tax system and points out that the traditional view usually considers that business groups have the advantage of tax avoidance and lower tax burden, and some empirical evidence also shows that the tax burden of member companies belonging to the business group is lower than that of independent enterprises. The article takes A-share listed companies during 2008-2019 as the initial sample, and finds business groups as paired samples for independent enterprises according to the principles of the same industry, the same year, and the closest pre-tax return on assets, and also requires that the total asset size of the paired samples should not exceed ±20% of the total asset size of independent enterprises, in order to ensure that the experimental group and the control group are fully comparable, and finally 574 sets of independent enterprises and business groups were selected for pairing. The article draws the following conclusions: (1) The tax burden of business groups is significantly higher than that of independent enterprises; (2) The above conclusions remain unchanged under extensive robustness tests; (3) The reasons behind the analysis reveal that when business groups have loss remedy restrictions (poor overall performance, loss of both parent company and subsidiaries, or inconsistent profit and loss of both parent company and subsidiaries), expense deduction restrictions (more advertising and promotion expenses, business entertainment expenses, etc.), and unrealized profits from insider trading, the difference in effective tax rate between them and independent enterprises is more significant.
During the discussion, Associate Professor Liangliang Wang had in-depth exchanges with the attending teachers and students on theoretical derivation, research design, and other issues. Associate Professor Liangliang Wang's research explores topics from research, focusing on practice and returning to the roots of accounting, which has a strong inspiration for attending teachers and students.
