Due to the emerging of anti-tax avoidance, the act of companies arranging tax avoidance is being examined. Related party transaction is complicated and nontransparent; therefore, companies often use it to undergo inappropriate interest arrangement to ease tax burden. This research examines the related party transactions of China public listed companies from 2007 to 2018 to study the relationship between related party transaction and tax planning. This research divides transactions into five types, total, sales, purchase, non-operating, and contingent. Research shows higher tax planning when companies adopt contingent transaction with other related enterprise. But the other research illustrates lower tax planning when companies adopt sales transaction with other related enterprise.

Wen-Jye Hung

Tsui-Lin Chiang

The Association Between Related-Party Transactions and Tax Planning

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