Legal Research On Tax Inspection

Tax inspection is an economic management activity performed by taxation authorities of all levels to examine and supervise the tax payment status of tax bearers, in accordance with the relevant regulations of tax laws and other economic laws and regulations of the country. Tax inspection is an important sector of taxation administration, a significant supplement of daily taxation administration and a key component for taxation supervision and administration of the country. Tax inspection right is an important executive and law enforcement power for tax inspection authorities according to the law. How to exercise the inspection power and to protect the lawful rights and interests of tax bearers well, is the responsibility of tax inspection authorities. The traditional executive and law enforcement way of China is stressed on the enforcement of the power and the application of authority, from which is still a certain of distance to entitative justice, let alone the procedural justice. This essay is trying to study the tax issue of laws and evidences in the contracting agreement and affiliation contract in the tax inspection from a legal angle, to provide possible way of thinking to the constitutionalization of tax inspection. This essay consists of three chapters: Chapter 1. General description to the tax inspection. Tax inspection is an executive and law enforcement power of tax authorities given by the law. It includes tax inspection power, tax executive and enforcement power and power of penalty and so on. Tax inspection is divided into professional inspection, specific inspection and exemplary case inspection. Authorized by laws and regulations, State Administration of Tax has enacted "Regulation for Tax Inspection", which divides the operation flow into four sectors: selection, inspection, examination and execution. During the practice of tax collection, tax inspection fully plays the function of "Inhibit from evading exteriorly, urge to collect interiorly". However, there are still many problems and deficiencies in current tax inspection system of China, especially the problems such as: unadvanced inspection conception, low specialization, unqualified inspectors with straggling equipments and monotony inspection ways and means. On the other hand, the lawful rights and interests of tax bearers are not well protected, the instances of enforcing the law beyond authority and infringing the lawful rights and interests of tax bearers happen at times. Make reference to the tax inspection system of Japan, France and Canada, we should do the following: first, give more power to tax inspection; second, increase the use of information technology; third, divide tax inspection into common inspection and special inspection in management, especially perform the specialty of tax inspection; fourth, to establish a dynamic taxation supervision system, list the tax bearers who have tax related illegal act in blacklist, and give a negative evaluation to their social credit. Chapter 2. The legal research on the problem contracts in tax inspection. Under the current taxation enforcement environment of Chinese mainland, the tax inspection is more relying on the related information supplied by tax bearers. With contract is well accepted by the people, businessmen usually pay more attention to the force of contract. Therefore, contract has become one of most important evidences to judge if a transaction is need to pay tax. In daily life, there are a variety of contracts involved in many legal issues, and the solution of those legal issues are extremely important in judging if a transaction should be collected tax or not as well as how to collect. It does not collect tax for the contracts, but the transaction arises from the contracts. Therefore to define the transaction character behind a contract is the precondition of taxation. In the legal practice, it frequently happens that the stipulated letter and the stipulated intention are conflicting, or the stipulated letter doesn't cover the stipulated intention or beyond the stipulated intention. This situation especially always occurs in tax laws, because the tax bearers have the freedom to form the legal facts, and can use the self-ruling right of this private law instinctively to achieve their economic aim with the least tax cost. When there is a conflict between the stipulated letter and stipulated intention, the tax authorities often adopt the principle of essential overtopped the form, and collect tax according to the transaction character. In the practice of tax inspection, the problem of taxation on the contract of contracting operation and affiliation is frequently encountered. Because the current tax law has stipulated the meet condition for contracting operation and the tax exemption regulation for business affiliation, tax bearers usually use these legal rules to sign contracting and affiliation contracts, and to reach their purpose of pay lower tax or get tax exemption. Supported by the theory ofessential overtopped the form, the tax inspection will take the tax penalty to the tax bearers who are trying to evade taxation by using of contracting and affiliation. Chapter 3. Legal research on the evidences in tax inspection. As a couple arisen from the law of 18th century, the entity and procedure are the two aspects of a legal act or a legal system. There is no entity without procedure or a procedure without entity. Being an executive and law enforcement act, tax inspection should not only be just on entity, but also on procedure. In Britain, America and France etc., it is paid much attention on the operation of procedural law, mainly by which to control the executive power. China doesn't have a uniform executive procedural law, and the procedural law doesn't gain much attention in the practice, most authorities of various levels usually pay more attention to the realization of the justice for legal entity, and sometimes they even sacrifice the procedural justice to the entitative justice. The investigation and evidence collection play a very important role in investigating and dealing with the tax illegal case for the tax inspection authorities, but how to get evidence is still bothering the tax inspection authorities. For many years, the tax inspection authorities have been trying to draw on the rules of evidence from juridical authorities, but it is very troublesome when operating and has negative affect to the efficiency. If using their own evidence, it is afraid of being at a disadvantage situation for insufficiency of evidences when on a stage of administrative action. That is really a difficult problem. Through research on the principle of the administrative action evidences, this essay is trying to construct an evidence principle of Chinese tax inspection. Evidential burden system requires a litigant to prove his/her own opinion with evidences, otherwise would assume the risk of being defeated and the negative consequence. The executive procedural law of our country gives the task of producing evidence to the executive authorities that take the concrete action. The tax inspection authorities are afraid of undertaking the legal risk of being defeated, and make exacting requirement with the evidences. Evidence collecting takes much working time that seriously affects the work efficiency and brings little help to the quality of tax inspection except giving some confidence. Therefore, different working mechanisms of daily inspection and tax investigation should be established in the tax inspection management system.When implementing different inspection form under the same evidence principle, a simple problem would become complicated. Although the procedure is reflected to be equitable, it increases the cost of taxation. Tax inspection authorities don't have many ways and means in collecting evidences because of the limits of authority. In order to collect the evidence of breaking tax laws of a tax bear, sometimes some illegal means might be taken, such as collecting evidence after inducing tax bearers to speak the truth, and so on. Those means are illegal viewed from a legal angle, however, they are useful in taxation. During the tax inspection, it is hard to get result without these methods. Nevertheless, the law enforcement not only calls for the realization of entitative justice, but also the procedural justice, and the later one is more important in a modern legal state. Our country should speed up our legislation pace in executive procedural law developing, establish the regulations of "the one claims, the one quotes", time limit regulation of investigation and collection of executive evidence, case exclusive and exclusion of the illegal evidence when constructing executive evidence principles. In the field of national economic life, there are plenty of such people who make use of laws and regulations to perform tax evasion, tax dodging, tax cheating, and debt tax avoidance. The anti-evasion and anti-dodging fights of tax inspection still have a long way to go. To constructing a legal and highly effective tax inspection system is an important task confronting the tax field of China. But this is a social system project, the solely endeavor of tax department is not enough. It needs the strong support and cooperation from all field of society such as the justice, information and executive department of government. Giving comparatively high limits of authority to tax inspection doesn't mean it can abuse power. It should be practiced under the regulation of the law, otherwise it may bring corruption. Tax inspection should not only reflect the justice of the law entity, but also the justice of law procedure.