Sensitivity analysis of tax policy of oil and gas resource countries to China's overseas oil and gas investment

Based on the strategy to stabilize the supply of oil and gas, the overseas investment projects of oil and gas have been proceeding steadily.In order to reduce the external economic risks of overseas oil and gas investment, it is significant to explore the constraints on tax which affect investment efficiency, and to reduce corporate's tax costs thus maximize its return.Clarifying the tax system and formulating reasonable tax reduction and evasion strategies are crucial to improve the economic efficiency of overseas investment.Therefore, this article takes the African resource national taxation system as an example, first to sorts out the relevant taxes under the construction and operation stages, then constructs the taxation framework following with a calculation example of a crude oil pipeline of East Africa, in which the tariff, value-added tax, business tax, corporate income tax and other turnover taxes and the effect of income tax on the sensitivity of the internal rate of return are measured.Through the analysis, it can be concluded that tariffs and value-added tax have “double promotion effect”, and business tax has “income effect” and “substitution effect”.According to the tax framework, with thorough consideration of each stage on oil and gas exploration, extraction, pipeline transportation, refining and sales, this article proposed several tax exemption strategies and tax avoidance suggestions including tax sorting and planning, reduction and avoidance, and risk prevention audits, which are taxation for overseas oil and gas investment provide reference for business strategy optimization.