The Avoidance Of Tax Of Affiliated Enterprises And Its Legal Regulations

Pursuing the maximization of economic profits is the ultimate purpose of enterprises. Along with the development of market economy and economic globalization, the advancement of modern enterprise system, and the consummating of the capital market, it has been an important economic phenomenon that firms are combining with each other to obtain maximum profits, which has produced the requirement for new enterprise forms and another innovation of enterprise system. The form of affiliated enterprises is the innovation for enterprise forms, which is invented to adapt the concentration of production and pursue economy of scale. The advantages of affiliated enterprises are obvious, so they have been ratified and protected by law. At the same time, however, they also have some disadvantages that are likely to hurt the entire economy of society, in which the avoidance of tax is becoming a focus of our society. This article is trying to discuss it from the perspective of legal regulation and make some suggestions.It seems that the affiliated business is to take place undoubtedly in the group of affiliated firms, which is probably intended to pursue economy of scale, enhance their competitive ability, monopolize the market, avoid risks, reduce the cost, seek cooperation, and so on. But one of the most important purposes is to evade payment of duty. Improper affiliated business may cause the permanent loss of the country's avenue or the continuous delay of the payment of duty, which will do great harm to national economy or even endanger the social stabilization. Because affiliated enterprises and their affiliated business are two-edged swords, they can neither be prohibited thoroughly nor be let alone, but only be regulated by law. This article puts emphasis on the system by which affiliated enterprises evade payment of duty and increase their profits and the main methods of avoiding tax. Then it discusses how to regulate affiliated enterprises' action for evading payment of duty according to domestic and foreign laws, and offers proposals.