Study On Right Of Priority For Taxation

Taxation is an important resource of a country's public financial revenue, which constitutes the majority of such revenue as well. In consideration of taxation's decisive role in the national economy, and for the purpose of guaranteeing taxation in accordance with the law, every nation has stipulated many measures, among which the taxation priority system is adopted to ensure taxation's preferential position of being indemnified. Article 45 of the Tax Collection and Administration Law of China revised in 2001 has initially stipulated the principle of priority for taxation in tax law. Such regulation, for ensuring the national tax revenues to play a positive standardizing arrivesing role, still has the deficiency of the legal provisions and questions of integration with other legal systems ,which need perfecting further. Starting with the civil origin of the taxation priority system, the paper attempts to explore some specific issues arising from the construction of the taxation priority system and make a certain number of proposals after the comparison research with the current law system of other countries and area, in the hope that this paper herein will make some contributions to the improvement of the taxation priority system in China. The paper falls into three chapters. The first chapter of this paper mainly discusses the theoretical issues of the taxation priority system. The paper introduces the civil origin of the right of priority for taxation at first. There are something similar between the priority and the real right for security. However, the priority still has its special characters. According to the different property belonging to the debtor, the priority is divided into common right of priority and special right of priority, the latter includes chose right of priority and estate right of priority. "Viewpoint of debt relation" defines the legal relations of taxation as the relation under which, the state requests taxpayer to perform tax debts; as well as defines the relation between state and taxpayer as the relation between credit and debts on public law. The civil right of priority is shifted to tax law for guarantee. Usually, the right of priority for taxation means that right of tax collection for a state should in principle have priority over other creditor's rights when the right of tax collection for a state coexists with other creditor's rights. Article 45 of the Tax Collection and Administration Law of China revised in 2001 has initially stipulated the principle of priority for taxation in tax law: tax collection shall have priority over creditor's rights without guarantee except stipulated by law otherwise; tax collection shall have priority over right to mortgage, right of pledge and lien happened after it; and tax collection shall have priority over fine and confiscation of illegal gains made by administrative organs. The right of priority for taxation has the following special characters: First is legality. Establishment of right of priority for taxation must be stipulated according to law, and it cannot be stipulated willfully by the party himself. The second is priority. When creditor's right for taxation coexists with other creditor's rights, the creditor's right for taxation has priority over common creditor's right without guarantee, or even over the right to mortgage, right of pledge and lien happened after it. The third is subordination. The right of priority for taxation is subordinate to the creditor's right of taxation. When the creditor's right of taxation vanishes, the right of priority for taxation will disappear too. The fourth is non-specialty. Object for right of priority for taxation is not specialized, and it can refer to any and all liable properties of the taxpayer. The theoretical foundation of right of priority for taxation is that tax revenue has public benefit and has no selectivity and specific recompense. Though we have dispose priority to the creditor's rights of the tax revenue legally, but this kind of priority can't be emphasized excessively. Defects existed on present right of priority for taxation are mainly represented on impact on the guarantee system and its related credit system. When the right of priority for taxation seeks for public interests, the respective private interests are damaged. The second chapter of this paper states the international and domestic present law about the right of priority for taxation. The right of priority fortaxation involves tax revenue and the late fee. First, tax collection shall have priority over creditor'srights without guarantee except stipulated by law otherwise. Secondly, as for the sequence between right of priority for taxation and real right for security, most countries'law says that the sequence between right of priority for taxation and right to mortgage and pledge should be decided in order of set time. But lien has precedence over right of priority. Thirdly, the paper analyses the sequence between rights of priority. Generally, creditor's right for wages and creditor's right for labor protection expenses have priority over that for taxation, and the purpose is to protect the people's basic right for existence and right for development. Liquidation expenses and other expenses of public interests also have priority over taxation, and expenses of public interests are purposed at protection of interests of all creditors, which is encouraged by law. Fourthly, the paper analyses the sequence between right of priority for taxation and fine and penalty. The purpose of fine and penalty is to punish the party concerned, and it is not the public interests. So the taxation shall have priority. Fifthly, the special right of priority for tax should have priority over the creditor's rights with guarantee and other special right of priority as the given property is concerned. Sixthly, the paper analyses the internal sequence for right of priority for taxation. When central tax and local tax are concomitant, principle of equality should be followed for national tax and local tax, right of priority for taxation should refer to common creditor's right beyond taxation. In principle, all different tax categories shall receive equal treatment. The third chapter of this paper mainly analyses the legislation and practice issues of right of priority for taxation. At present, the stipulations in the Tax Collection and Administration Law of China conflict with many other laws in our legislation. We should harmonize these regulations. Furthermore, defects existed on present right of priority for taxation are mainly represented on impact on the guarantee system and its related credit system. In order to lighten the bad influence about the priority for taxation, the law should clearly stipulate the time of existence of right of priority for taxation, standardize system of public summons on right of priority for taxation, relieve the priority over the lien, as well as classify the sequence of the realization between the right of priority for taxation and other priority. Whereas someshortcomings on legal stipulations exist concerning right of priority for taxation in our country, it is reasonable to restrict right of priority for taxation. At the same time, we shall promote the realization of right of priority for taxation through material measure.