Can the Reform of the Transfer Tax System Affect Corporate Green Innovation-Evidence from China's "BT to VAT" Reform

Taxation has long been an important tool for dealing with externalities, and studying whether tax policies can be linked to today's green development trend can help macroeconomic decisions influence the green transformation of enterprises. The article uses the business tax to VAT reform (BT to VAT), the largest turnover tax reform in recent years that took place in China from 2012 to 2016, as an example. The policy effect model was constructed using the difference in difference method to explore the driving effect of the tax reform and related variables on corporate green innovation. The results show that the policy effect of tax reform can effectively promote an enterprise's green innovation behavior, with the promotion effect on invention-based green patents being significantly higher than that on utility-based green patents; there is a certain time lag in the promotion of green innovation by the policy effect of tax reform, with a significant effect starting from the third year of the policy. The green innovation behavior of enterprises is influenced by the characteristics of enterprises, with a significant positive correlation with enterprise size and operating capacity. Green innovation behavior is influenced by the characteristics of enterprises and has a significant positive correlation with the size and operating capacity of enterprises. The implementation of the policy of 'reducing taxes and fees' is conducive to green innovation, and an effective tax reform should be formulated gradually in response to the national conditions and market situation; on the basis of quality assurance, unnecessary steps in the process of green patent application and approval should be reduced to improve the efficiency of green innovation; effective social supervision or the appropriate realization of corporate equity can be adopted to promote green innovation. Corporate equity to promote corporate green innovation.