Anti-tax Avoidance, Spillover Effect and International Tax Competition Data

In this paper, we add three kinds of anti-tax avoidance methods in ZMW tax competition model, namely “transfer pricing rules of neighboring countries”, “transfer pricing rule of domestic country” and “number of domestic tax treaties” to investigate the spillover effect of anti-tax avoidance system on enterprise income tax base and tax rate. We use the balanced panel data of 50 countries from 2000 to 2013 and system GMM method to test the theoretical propositions.We find that “transfer pricing rules of neighboring countries” and "number of domestic tax treaties" reduce the domestic tax base, but "domestic transfer pricing rule" have no significant effect on the tax base.The three kinds of anti-tax avoidance methods do not eliminate international tax competition behavior.With the improvement of anti-avoidance management the level of tax competition among countries will increase significantly, especially among developed countries.