The Legal Regulation On The Anti-Tax Avoidance

Tax avoidance and anti-avoidance tax law a basic for eternal proposition. Take a glance of the anti-avoidance trends, generally, the world harbor a negative attitude towards tax avoidance behaviors. What is tax avoidance, where is the boundary between tax avoidance and tax planning, why anti-avoidance and how, are all these most important questions need to be addressed in both tax law theory and practice area. Classic tax law build its theory on the taxation legalism, following the path from "private law transactions facts" to "the amount of tax assessable elements of fact (private law’s succession on tax law)" to "Tax Law literal interpretation" to "taxation legalism". On the other hand, anti-avoidance tax law takes Ability to Pay Principle as its legal basis, following the path from "private law transactions facts" to "tax assessable elements of fact (private law’s adjustments on tax law)" to "explain for tax purposes" to "Ability to Pay Principle". Anti-avoidance brought a fundamental shocks and challenges to the classic tax law, touching the root issue of the orientation of tax law and the rule of tax law. Moreover, tax avoidance or anti-tax avoidance, not only involving the conflicting and balancing between private property and the State tax power, tax law as a law of taxpayers’ rights protection and national revenue law, tax law affiliated the private law and tax law which has its independence, but also the form and the substance of the rule of law. Hence, this paper, in perspective of rule of law, in the view of balance of interests anti-avoidance policy and country differences, attempt to examine the basic legal and institutional anti-avoidance issues. This article consists of the following five chapters:Chapter Ⅰ, the legal definition of tax avoidance. The purpose of this chapter is to address is the definition tax avoidance. This is the cardinal problem of anti-avoidance have to be solved. This part analyzes the need for regulation of the tax avoidance from its universal growing. To analyze the legal definition of tax avoidance, this chapter mainly discusses the concept of tax avoidance, Components and legal character. First, boundaries between tax avoidance and tax planning behavior is difficult to distinguish. Definition method of tax avoidance should alter from the internal perspective to epitaxial perspective. Second, the legal definition of tax avoidance also need to start from its constituent elements, the constituent elements crystallized the concept of tax avoidance. The constituent elements of tax avoidance should adopted dualism, take the element of objectivity as the main elements, and take the element of subjectivity as exclude elements. Final, the legal character of tax avoidance is a judgment of fact rather than a judgment of value, tax avoidance is a beyond-law. Tax avoidance and anti-avoidance contains high portion of policy and nationality, and this trend will evolve and change with the times, and which in turn generate a high degree of complexity and uncertainty.Chapter Ⅱ, the legal basis of anti-tax avoidance. In order to lay the foundation value of anti-avoidance, this chapter addresses the purpose of anti-avoidance. At the. beginning, this chapter analyses the conflicting and balancing between private property and the State tax power, tax law as a law of taxpayers’rights protection and national revenue law, tax law affiliated the private law and tax law which has its independence, but also the form and the substance of the rule of law. Anti-avoidance is the main issue of tax law and the rule of law, which also is the standpoint of the anti-avoidance jurisprudence and institutional research. Under this basis, this chapter analyze and demonstrate the legal basis of the anti-avoidance start from Ability to Pay Principle and anti-avoidance, and tax functions of nationalism and anti-avoidance respectively. Under the nationalism functions and the Ability to Pay Principle, tax avoidance behavior should be regulated. Among them, the Ability to Pay Principle is the basic principles of tax law, the dominant legal basis of anti-avoidance; we cannot one-sided emphasis on nationalism functions of taxation and use anti-avoidance power unscrupulously.Chapter Ⅲ, the central idea of the anti-avoidance:seal tax loopholes. The purpose of this chapter is to sort out the central ideas of anti-avoidance. There have two with two modes to seal tax loopholes, one is depend on legislative authorities, the other is depend on judicial and administrative ones. Under this basis, the paper demonstrated that, in front of the tax loophole, the legislative, judicial and administrative authorities has their independent right, where the legislature anti-avoidance is the primary and basic approaches, judicial and administrative anti-avoidance is unique and irreplaceable. Different from the generally applicable rules of law which the legislature directly establishment, judicial and administrative authorities translate the tax law on its legal purpose through independent cases and use economic substance interpretation doctrines to carry out anti-avoidance power.Chapter IV, the specific anti-avoidance operation. The purpose of this chapter is to analysis the legislative, judicial and administrative authorities’anti-avoidance methods specifically and separately. Legislature anti-avoidance methods mainly act as anti-avoidance legislation, lay down special anti-avoidance rules and the general anti-avoidance rules. The general anti-avoidance rules aims to overcome the shortage of special anti-avoidance rules on coverage. Anti-avoidance rules are declaratory provisions which neither create new standards, nor have vulnerability supplementary provisions. The judiciary authorities seal tax loopholes for anti-avoidance via independent cases. In the long-term judicial practice, judges have accumulated a series of judicial anti-avoidance principle such as the substance over form and commercial purposes principle which are the two core principles. Administrative authorities focused on the applicable substantive principles of taxation, prone to analysis the economic substance fact of taxpayers’behavior. To response the plight of the factual findings of the elements of assessment, the administrative authorities may introduce two major new ideas, elements of assessment observation by types and pre-agreed anti-avoidance.Chapter Ⅴ, the legal system of China’s anti-avoidance. The purpose of this chapter is to overview the legal system of anti-avoidance and throw out some suggestions among legislative, judicial and administrative perspectives. Since the opening-up policy, China’s anti-avoidance legal system has experienced its infancy period, norms and development period and transformation and improve period, and formed a sound anti-avoidance legal system initially. Unlike Western countries, China’s administrative authorities take the dominant position on anti-avoidance area. The formation of the administrative-led anti-avoidance mode, which is an innovative, but also should be avoided to go astray. China’s anti-avoidance legislation perfection should start from sit tax avoidance concept and constituent elements, Ability to Pay Principle and the principles of interpretation of tax laws in to law article, from improve the tax collection and management law by enable the anti-avoidance legislation extends to all taxes, abridge the unity of tax substantive law and its procedural law. China’s administrative anti-avoidance power should be respected for its uniqueness and creativity, and start perfection from legislative restraint mechanisms, judicial restraint mechanisms, and self-discipline under the general anti-avoidance rules. In addition, it is necessary for China to turn the judiciary power on in the anti-avoidance area.