Research on Tax Compliance Incentive Effects of Platform Companies from the Perspective of Incomplete Contract – An Empirical Study Based on China
In this paper, based on the incomplete contract perspective, we select the implementation of the Electronic Commerce Law of the People’s Republic of China as a quasi-natural experiment to study the tax compliance incentive effects of platform firms. Our study finds that the Chinese experience hel...
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| Main Authors: | , |
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| Format: | Article |
| Language: | English |
| Published: |
Editura ASE
2024-02-01
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| Series: | Amfiteatru Economic |
| Subjects: | |
| Online Access: | https://www.amfiteatrueconomic.ro/temp/Article_3296.pdf |
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| Summary: | In this paper, based on the incomplete contract perspective, we select the implementation of
the Electronic Commerce Law of the People’s Republic of China as a quasi-natural
experiment to study the tax compliance incentive effects of platform firms. Our study finds
that the Chinese experience helps to improve the efficiency of tax compliance contract
enforcement and significantly increases the propensity of platform firms to comply with
taxes. Of course, these effects are also constrained by the contractual environment, social
responsibility, financing constraints, and market competition. Further mechanism tests show
that the incompleteness of the tax compliance contract is compensated by two mechanisms
of action, namely the reduction of information asymmetry and the reduction of transaction
costs of the tax department, which generate tax compliance incentive effects. The research
has important implications for optimising the tax compliance contract of platform firms and
reducing tax leakage in the platform economy.
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| ISSN: | 1582-9146 2247-9104 |