The Statement On The Coordination Of Tax Law And Accounting System In China

As we know,taxation is closely related to accounting.In history they had been separated for a period of time,now they developed together.This research paper systematically analyses the divergence and its causes between Tax Law and Accounting System and puts forward some principles to the contradiction and some suggestions for policy on the basis of historical and present relationship between taxation and accounting.The divergence between Tax Law and Accounting System results from historical background,which mainly consists in the difference in their aims.As a result divergence occurs between Tax Law and Accounting Principle,Accounting Processing Procedure and Accounting Method.It is objective for the divergence to exist but it is harmful for us to make it larger intentionally.In my opinion,we can coordinate the divergence between them if we act on Systematic Principle,Relative Stability and Strict Principle,Cost Efficiency Principle,and Realistic and Feasible Principle.In particular,we can do as follows:As far as Tax Law is concerned,we should try to form a complete set of laws,gradually relax restrictions to the choice of enterprise accounting method and allow enterprises to asses their business risks to a certain extent.In the case of Accounting,we should reduce the alternative scope of accounting policy and change the accounting method of Stamp Tax,Bussiness Tax and Add Value Tax so that it can coordinate with Tax Law.In a word,we cannot do the above without considering the actual situation of China.In other words,we should attach importance to both sides:the formation and completion of Accounting System and the perfection of Tax Law.