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Research On The Legislation Of Anti International Tax Avoidance

Posted on:2006-01-06Degree:MasterType:Thesis
Country:ChinaCandidate:A D ShiFull Text:PDF
GTID:2166360155964773Subject:International Law
Abstract/Summary:PDF Full Text Request
International Tax Avoidance(ITA) not only does harm to the taxation of the nations involved but also causes chaos to the order of international capital circulation. With the globalization of world economy and the rapid expansion of multinational enterprises, ITA has been found to be used in more and more ways and to be active in larger and larger scales. The battle between ITA and anti-ITA has become the 'World War' in economic field. It has also become a common topic which national and international researcher of tax and law are working on.The typical ITA methods used by multinational tax payers are the Transfer Pricing (TP) and the Abuse of Tax Treaty (ATT). The current transfer pricing taxation rule used by most nations is so called 'normal transaction rule' . It is used to regulate the transfer pricing activities. But the rule is applicable only in a small number of cases and difficult to apply in practice. This is partly because that 'Precontract Pricing' method, in which the price is agreed before an event, is widely accepted. There are often some mutual beneficial clauses in tax treaties between nations. But involved nations of the treaty may have different explanations and misunderstandings of the treaty. The international tax payer may abuse these isunderstandings and make ITA activities possible. More and more governments have participated in the battle to the Abuse of Tax Treaty by amending their existed tax laws and constituting new laws and regulations. These governmental actions have effectively taken the ITA activities into control. But the ITA activities are still not completely eliminated. China has established its own anti tax avoidance laws system, which is more advanced than that of other developing countries. But there are still problems in the system. The government is still losing billions of yuans on taxationeach year. The research on anti tax avoidance approaches will be valuable in decreasing tax lost and establishing a fair market.This article first systematically analyzes the characteristics and motivations of anti-ITA regulations and then summaries the commonly used ITA methods and their respective consequences. This paper also compares different anti-ITA approaches used by other countries with emphasis on the countermeasure to the typical ITA approaches - transfer pricing and the abuse of tax treaty. Based on the current status and the legislation practice of anti-ITA regulations in China and existed western regulations on anti-ITA, we propose some suggestions to solve the problem by legislation to enhance the government' s ability of anti-ITA.
Keywords/Search Tags:International Tax Avoidance, Transfer Pricing, The Abuse of Tax Treaty, Legislation
PDF Full Text Request
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