As an important command controlled environmental regulation tool, the implementation of the new environmental protection law has had a wide impact on the operation of enterprises. Taking China，s A-share listed companies from 2010 to 2020 as the sample and using the exogenous impact event of new environmental protection law, this paper empirically tests the impact of environmental regulation on corporate tax avoidance by DID model. The results show that stricter environmental regulation encourages enterprises to increase tax avoidance. The mechanism test shows that environmental regulation leads to greater financial constraint and operation risk. Further analysis shows that the positive relationship between environmental regulation and tax avoidance mainly exists in enterprises with high financing difficulty and operating pressure. Corporate tax avoidance under the implementation of new environmental protection law improves the financial performance and firm value. This study provides empirical evidence of how micro-enterprises respond to macro-environmental regulation, and provides reference for the government to optimize environmental policies combined with tax policies.