Research On Anti-tax Avoidance Issues Under The New Enterprise Income Tax Law Framework

Tax revenue is one of the principle sources for state revenue. The main task for State Tax Department is to organize tax revenue, perform administrative work of tax revenue collection, improve tax service quality and reduce taxation cost. The essence of taxation is a reallocation of national revenue between the state and taxpayer. The tax incidence has a direct impact upon state revenue and the interest of the taxpayer. The increase of tax incidence means the decrease of the interest of the taxpayer and vice versa. In this situation, quite a few enterprises try to either reduce or shift their taxation in order to gain more profit, thus resulting in the problems including tax evasion and tax avoidance. While both tax evasion and tax avoidance can help reduce the taxation incidence, there are some differences between them. Tax evasion is illegal and can incur serious legal liability once caught whereas tax avoidance is more difficult to be caught and operates at a lower cost as well due to its uncertainty of legal applicability. Hence, an increasing number of people start to focus on tax avoidance, which in turn incurs a more and more severe situation for anti-tax avoidance.This paper is divided into four sections.The first section mainly talks about some basic theories in tax avoidance, including the definition of tax avoidance, the relation between tax avoidance and its related concepts and principal means for enterprises to avoid taxation. It also makes an analysis of basic theories in tax avoidance and a summary of the definition of tax avoidance and features and the harm in avoiding tax, which lays a good foundation for later analysis of anti-tax avoidance.The second section makes a good analysis of our current anti-tax avoidance legislative situation. It begins with a review of development history of anti-tax avoidance in China, including an organization, analysis and summary of the laws and regulations on anti-tax avoidance over the past years. Then it makes an elaborate explanation of the clauses in the New Enterprise Taxation Law, analyses the new anti-tax avoidance clauses and the meaning of implementing this new law.The third section analyses problems existing in our current anti-tax avoidance system and points out four problems in anti tax avoidance: Unclear provision of burden of proof of the taxpayer, inflexibility of thin capitalization system, ineffective applicability in average anti tax avoidance clauses and unclear relation between the New Enterprise Income Tax Law and International Tax Agreement.The fourth section proceeds with law improvement and management reinforcement, following a probe into the ways to improve the anti-tax avoidance legislation under the New Enterprise Income Tax System so as to improve our anti-tax avoidance system, stand up to the growing tax avoidance challenge and safeguard the rights and interests of tax income in our country by learning successful anti-tax avoidance experience from other countries...