Description

Tax competition between Singapore and Shanghai has been an important factor impacting business activities in Asia, especially on their location decisions. The primary objectives of my research are to answer two questions: (1) whether tax incentives of Singapore and of Shanghai are effective to attract the business which they aimed to; and (2) how the global G20/OECD’s BEPS project and Two-Pillars Solution may influence the future tax incentives of Singapore and Shanghai in term of their tax competition? To achieve these objectives, I firstly investigated the history of Singapore and Shanghai in providing tax incentives to attract cross-border business. And secondly, I compared their current tax incentives from two key business sectors, i.e., the financial sector and the high-tech industry, and examined their effectiveness on business. Thirdly I reviewed the changes to the tax incentives of Singapore and Shanghai as a consequence of implementing the global G20/OECD’s BEPS project in the past decade. And lastly, I predicted the trend of development where the tax incentives of these two jurisdictions will be more similar and convergent in the context of implementing the G20/OECD’s new Two-Pillars Solution. My argument is that tax competitions between Singapore and Shanghai will no longer focus on tax incentives but to be on other tax factors in the future, for examples having simpler tax regimes, having more efficient tax administrations and disputes resolutions regimes, as well as to provide higher tax certainties to business.