The Legal Analysis Of Anti-thin Capitalization

Thin capitalization has become widely used as a new trend of international tax avoidance, which is the conduct of the debt investment providing to the equity capital, through the capital structure arrangements, to achieve the purpose of tax avoidance. Based on the analysis of the whole legal system of the Chinese anti-thin capitalization rules, and draw on the experience of the newest international concept of anti-thin capitalization, this article wishes to be able to make some proposals to the anti-thin capitalization rules, and perfect the anti-thin capitalization legal system in china.The first chapter analyzes the basic theories of the anti-thin capitalization legal concepts. Firstly, it introduces the definition of thin capitalization; and thin capitalization is one way of the international tax avoidance, then the article gives the general introduction of the concepts of international tax avoidance and many kinds of the modes; Secondly, it analyzes the causes of thin capitalization and its performance; Finally, it introduces several tax audit methods of the cross-border capital, and takes the OECD model as an example to analyze the international tax method.The second part introduces the latest international anti-thin capitalization concept, and explores the model of the latest OECD reform as a guideline in the anti-thin capitalization regulations. First it has a brief analysis of OECD2008 model and comment on the latest updates; further it studies the non-discrimination terms of the international tax agreements, and its application to the anti-thin capitalization; then, it introduces the identification of the interest and dividends; Finally, it studies the specific system and its advantages of the arbitration clause in the latest reform of the OECD model.The third chapter analyzes the current anti-thin capitalization legal system in our china, it studies the latest"Enterprise Income Tax Law"and its implementing regulations,"the notice of the related party interest deductions"and the "Implementation Rules for Special Tax Adjustments ( Interim) " respectively . We explore these four laws and other relevant laws to make the current anti-thin capitalization legal status clear.The fourth part bases on the studies of the inadequacy of existing legislation in anti-thin capitalization, it learns from the advanced international concepts and relevant experience, to put forward some ideas and suggestions to the anti-thin capitalization rules, for improving and perfecting the tax system in china.