Research On The Reform Of Enterprise Income Tax System In China

Since the reform and opening-up policy, China has kept economic development as the central task consistently and economic situation has changed remarkably. However, China still has different enterprise income tax laws for domestic and foreign invested enterprises, which does not meet the requirements of new conditions at present. Reforming existing enterprise income tax laws and establishing unified enterprise income tax law adapting to reform and opening-up are imperative.On the basis of foreign tax system structure and income tax development trend, this thesis systematically analyzes the problems and measures of China enterprise income tax reform, expounds the value of new enterprise income tax law, and perfects the new enterprise income tax law. This thesis researches on the legal problems of China enterprise income tax.The first part introduces the reform of enterprise income tax all over the world. Enterprise income tax is a sort of direct tax imposing net income. It is also a relatively impartial tax with regulatory function. All countries carry on tax reform depending on useful tax reform theories, including theory of equitable taxation and equity principle is the core content, theory of optimal taxation and balance between revenue efficiency and revenue equity is elementary theory, theory of fiscal exchange and the probability of bad acts of government is the core investigation. The reform measures of developed countries includes: lower income tax income tax rate with the purpose of increasing profit, relieving manage difficulty of enterprise and reducing unemployment in the situation of recession or might appear recession, regulate tax preference with the purpose of calling for fair competition among enterprises and avoid double taxation. Double taxation mainly points to impose enterprise income tax and personal income tax at the same time and relevant solutions contain complete conformity system, final tax in advance system, different rates system and credit imputation system.The second part discusses the tax reform of China enterprise income tax. This thesis in the beginning puts forward several principle questions about enterprise income tax reform, including taxpayer, tax base, tax rate, tax preference and revenue management. We shall produce a new, unified, and suitable for practical situation enterprise income tax law with the help of foregoing principles. The new enterprise income tax law shall confirm legal person as taxpayer, meanwhile taxpayers shall be divided into inhabitant taxpayers and nonresident taxpayers according to register. The new enterprise income tax law shall select balanced and lower tax rate and 25% shall be proper. On one hand, this rate is close to international tax incidence level, which is convenient to bring in foreign investment and protect domestic enterprises. On the other hand, it is also close to domestic tax incidence level, which is convenient to transfer the current tax system. The new enterprise income tax law shall confirm reasonable tax base, unifying deduction standard and tax management method. Establishing unified tax base shall be pursuant to principles as follows: accrual basis principle, matching principle relativity principle, certainty principle, rationality principle, net income principle, independent enterprise principle, carrying out income tax accounting principle, resident tax jurisdiction and region tax jurisdiction principle. According to practice, the new tax preference policy shall be pursuant to the principles that indirect preference is prior and direct preference for supplement, industrial policy is prior and region policy for supplement. And it shall make great efforts to high-tech industry development through carrying out multi-preference. It is suggested that administration of local taxation is responsible for tax income and imposing in the new enterprise income tax law, which may not only manage all items of tax but also increase imposing efficiency and lower revenue cost to some extent.The third part affirms the value of the new enterprise income tax law from lawmaking point of view. Promulgating the new enterprise income tax law is a milestone in the history of tax system construction, which makes great influence to form tuneful tax law. First, the new enterprise income tax law has unified system. In the process of lawmaking, we cleared lots of the original administrative rules and local normative files, amended some ambivalent and conflicting provisions and increased systematism and diaphaneity of tax rules. Secondly, the new enterprise income tax law is pursuant to international principle of taxation. The new enterprise income tax law cancels ultra-national treatment and carries out national treatment principle and diaphaneity principle. Thirdly, the new enterprise income tax law realizes tax incidence equity. The new enterprise tax law decreases apparent tax rate to 25%, unifies deduction standard and all kinds of tax preference and realizes nondiscrimination between domestic enterprises and foreign-invested enterprises. Fourthly, the new enterprise income tax law adapts to the new conditions. The new enterprise income tax law meets the requirements of current saving economic construction, is suitable for new tax avoidance measures and satisfies economic development and open to the outside world.The fourth part puts forward perfect scheme to insufficiency of the new enterprise income tax law. First of all, the new enterprise income tax shall harmonize with imposing system. All things are among both space and hour, so does revenue. However, the new enterprise income tax law does not provide ratepaying hour and ratepaying place is not proper. This thesis considers that the new enterprise income tax law shall provide definite ratepaying hour and bussiness place is suitable for ratepaying place. Secondly, the new enterprise income tax shall harmonize with individual income tax. It is important to solve double taxation between the two income taxes. We may adopt credit imputation system through using international experiences for reference. To harmonize two tax rates of income taxes, this thesis suggests individual income tax rate structure redesign progressive mode of grade decrease and tax rate reduction. Then tax incidence of personal income is nearly equal to that of enterprise income, which is helpful to simplify tax system, prevent tax evasion of high income earners and increase imposing efficiency.