Abstract: Supply chain finance has such positive effects as alleviating corporate financing constraints, promoting cooperation between enterprises and their upstream and downstream partners, and stabilizing the supply and demand relationships of enterprises. This paper conducts an empirical study using the non-financial listed companies on China’s A-share market from 2010 to 2023 as samples. The findings show that engaging in supply chain finance business can suppress corporate tax avoidance. The mechanism testing shows that supply chain finance can alleviate the financing constraints of enterprises, reduce their operational risks, and improve their information transparency. Therefore, supply chain finance can suppress tax avoidance by enterprises. The heterogeneity testing reveals that in enterprises located in regions with strong tax collection and management, as well as in enterprises with high supplier concentration, low supply chain transparency, and high degree of specialization, the inhibitory effect of supply chain finance on tax avoidance is more significant. To this end, the government should further promote the development of supply chain finance and deepen tax reform, and explore the establishment of a governance mechanism that coordinates supply chain finance with tax collection and management. Financial institutions and core enterprises in the supply chain should continuously optimize the supply chain finance business system and enhance the tax compliance level of all enterprises in the supply chain.

Key words: supply chain finance, corporate tax avoidance, financing constraints, business risks, information transparency