Not Available for Download

Domestic Income Shifting by Chinese Listed Firms

The Journal of the American Taxation Association, Forthcoming

Posted: 14 Apr 2011  

Terry J. Shevlin

University of California-Irvine

Tanya Y. H. Tang

Brock University

Ryan J. Wilson

University of Oregon

Date Written: April 12, 2011


To encourage economic development in specific regions and industries, the Chinese Central and local governments offer a series of corporate income tax incentives (tax exemptions, reduced tax rates, tax holidays and tax refunds). In China, parent and subsidiary companies are consolidated for financial reporting, but not tax, purposes. We take advantage of a unique disclosure in the tax footnotes of Chinese listed firms to examine income shifting among consolidated group members in response to these incentives. We find that intangible intensive groups (“firms”) and firms concerned with meeting minimum earnings thresholds to issue equity shift greater amounts of income. We find no evidence that high concentrations of either Central or local government ownership affect the level of income shifting.

Keywords: Income Shifting, Tax Avoidance, Chinese Listed Firms, Intangibles, Equity Issuance

JEL Classification: H25, H26

Suggested Citation

Shevlin, Terry J. and Tang, Tanya Y. H. and Wilson, Ryan J., Domestic Income Shifting by Chinese Listed Firms (April 12, 2011). The Journal of the American Taxation Association, Forthcoming. Available at SSRN:

Terry Shevlin (Contact Author)

University of California-Irvine ( email )

Irvine, CA California 92697-3125
United States
2065509891 (Phone)

Tanya Tang

Brock University ( email )

500 Glenridge Ave.
St. Catherines, On L2S 3A1

Ryan Wilson

University of Oregon ( email )

1280 University of Oregon
Eugene, OR 97403
United States

Paper statistics

Abstract Views