Research On The Preferential Tax Subsidy Of Our Country Under The International Rule Of Subsidy

Anti-subsidies is an important approach allover the world used to prevent unfair competitions in their international trades, and to protect the industry safety in their country. Agreement on Subsidies and Countervailing Measures is an important part of WTO legal systems, shorter for ASCM. ASCM is an internationally prevailing rule of Subsidy, and it's the most authority one. We can see that Subsidy always come along with preferential tax policies of one Country. In recent years, a lot of foreign countries had instituted countervailing prosecutions against our country, many of the prosecutions is about our preferential tax policies. So it's necessary for us to research the preferential tax subsidy of our country intensively.ASCM prescribes that a subsidy requires three essential factors as the provider of the subsidy, financial contribution, the award of benefit. When a subsidy has specificity it should be legally restraint by the ASCM. According to the influence that a subsidy distort the international trade order, subsidies can be divided into prohibited subsidy, actionable subsidy and non-actionable subsidy. Preferential tax is an important approach of the government to Regulate operation of the economy, it means the government gives up or not levies the tax that should be collected. The legal assessment and identification of the preferential tax subsidy based on ASCM could be based on the classification of subsidies the preferential tax policy belongs, or based on different forms of the preferential tax. Our new Enterprise Income Tax Law has been improved a lot according to ASCM, but it's not enough. Among our current preferential tax policies, there are still some legal provisions can form prohibited subsidies, they are export subsidies and import substitution subsidies. And there are also a lot of preferential tax subsidies which are not prohibited subsidy but can form actionable subsidies; these actionable subsidies are highly potential to encounter countervailing prosecutions.According to the international rule of Subsidy, we need to improve our preferential tax subsidies. We should integrate our current preferential tax laws and regulations, enrich the variety of the preferential tax subsidy, and avoid the preferential tax subsidies to be specific properly. We should also make full advantage of the actionable subsidy, enhance the use of indirect tax preference subsidies. And we should promote the support that preferential tax subsidies give to technical innovations, this is essential to our economic development.