Research On Legal Problem Of Taxing One-Man Company Of Natural Person Income

The validity of one-man company of natural person is affirmed in the new company law. Thereby it provides opportunity, which natural-person investors can set up a company solely for obtaining limited liability. However, tax is one of the most important elements that the investors must take into consideration when form a company. According to Chinese tax law, taxing on one-man company of natural person is the same as imposing on others, such as limited company or stock company.It takes company as a taxpayer who is levied enterprise income tax, and takes natural person shareholder as a taxpayer who is levied individual income tax upon income obtaining from the corporation, which accordingly produces double taxation.Therefore, the article firstly affirms that the company taxation pattern in China is separate entity approach. And based on four reasons, such as"independent personality different from independent taxation qualification", the article oppugns the rationality of separate entity approach applied to one-man company of natural person, and concludes that the system is unreasonable. Secondly, by comparing with dividend-paid deduction scheme, the imputation system, and other three kinds of taxation pattern, the article concludes that we should adopt partnership approach to one-man company of natural person, namely levy individual income tax upon one-man company of natural person. In the third chapter, based on the new tax pattern, I provide some suggestions on constructing taxation element of one-man company and regulation of one-man company tax avoidance.The article embodies innovation mostly in two aspects: The first one is that the author overthrows the notion of"independent personality equals to independent taxation qualification", and according to the ability-to-pay principle of taxation, the author points out that the nation should levy individual income tax upon one-man company of natural person. Secondly, the author amply designs taxation elements of one-man company in the light of taxation system of individual enterprise.