Based on proprietary and hand-collected source country information on foreign-owned firms in China, this paper empirically explores the effect of the tax avoidance of multinational firms on the profit rate of foreign-owned firms. Foreign firms in China previously benefited from various preferential tax policies and had a lower effective tax rate compared to domestic firms. The results show that the increase in the difference between the statutory maximum tax rate in the parent country and the domestic tax rate will increase foreign firms' pretax profit margin. This effect is more pronounced for younger firms and wholly foreign-owned firms. Further tests indicate that the transfer pricing in export and import activity of foreign firms is an important channel for multinational firms to shift profits. In year 2008, the implementation of the new Enterprise Income Tax Law has unified the corporate tax rate for both domestic and foreign firms at 25 percent. The tax reform reduces the profit margin of foreign firms, especially those with larger tax rate differentials. This paper explains multinational firms' profit performance from the novel perspective of tax avoidance.

本文基于自有和手工收集的在华外资企业来源国信息，实证探讨了跨国企业避税对外资企业利润率的影响。此前，在华外资企业受益于各种税收优惠政策，与国内企业相比，有效税率较低。研究结果表明，母国法定最高税率与国内税率之间差异的扩大将增加外国企业的税前利润率。对于较年轻的公司和外商独资公司来说，这种影响更为明显。进一步的检验表明，外国企业进出口活动中的转移定价是跨国企业转移利润的重要渠道。2008年，新企业所得税法实施，内外资企业企业所得税税率统一为25%。税制改革降低了外国企业的利润率，特别是那些税率差异较大的企业。本文从避税的新角度解释了跨国公司的利润绩效。