International Investment In The Foreign Enterprise Income Tax

This dissertation is devoted to study enterprise income taxation concerning international investment in the context of economic globalization. The focus of the study is placed on the reform and optimization of China's foreign-related enterprise income taxation system under the circumstances of WTO accession.With recognizing the impacts of economic globalization, a variety of critical challenges for the reform and optimization of China's foreign-related enterprise income taxation system in the post-WTO era can be identified and categorized into four respects: (1) As to inbound investment, how to adjust the preferential income tax policy dedicated to foreign-invested enterprises? (2) As to outbound investment, how to establish an income tax system conducive to carrying out the strategy of Chinese enterprises' striding into the outside world? (3) While China's participation into the integration of international economy has been continuously deepened, how to deal with and develop the international coordination in the field of enterprise income taxation; and (4) How to fulfill the obligation of China to ensure the conformity of its foreign-related enterprise income taxation system to the requirements of WTO rules. The challenges in the last respect mirror the institutional constraints due to WTO accession to China's foreign-related economy, while the challenges in the other respects are stemming from the effects of WTO accession on China's economic operation. These four respects of challenges shape the research scope for this dissertation.It is held by the author that the interest conflicts among different subjects of taxation constitute the key link underlying the various issues regarding foreign-related enterprise income taxation, which meanwhile present themselves in varying concrete forms such as double taxation, tax avoidance, gains or loss of market competitiveness, and etc.. Firstly, from the economic perspective, the various conflicts of interests, may hamper the free movements of products and factors while resulting in pitfalls in realizing the rational allocation of resources, and may lead to the vain increase of costs for implementing the tax system as well. Secondly, from the legal perspective, such conflicts may distort and cause imbalance of the interest relations among different tax subjects. Both these two kinds of situations can take place in either a domestic or international scope, while the former running against the principle of efficiency and the latter against the principle of equity. Therefore, in the context of economic globalization the rational and effective coordination on such conflicts of interests becomes the prerequisite for a country to achieve health development of its foreign-related enterprise taxation system. This is the basic hypothesis of the study. Accordingly, the fundamental task of this study lies in the exploration on how to rationally and effectively tackle the various interest conflicts regarding China's foreign-related enterprise income taxation system, while the exploration being based on the principles of efficiency and equity and taking in account of the constraints from the WTO rules. In fact, the interest conflicts in question embody the essence of the challenges confronted by China's foreign-related enterprise income taxation system under the circumstances of WTO accession.Seeing that, this dissertation proceeds from equity and efficiency, the two fundamental principles of value for tax system, to summarize and evaluate the main concepts concerning foreign-related taxation system and the relevant WTO rules, leading to forging an analytical framework for the study. Then it makes observations and analysis on China's existing foreign-related enterprise income taxation system, and unfolds discussions on the major challenges faced by the system. Furthermore, a set of ideas and policy recommendations are raised for the reform and optimization of the system with taking into consideration of China's realities and the trend of economic globalization and using for referen...