Discussion On Unification Of Income Taxes Of Domestic-funded And Foreign-funded Company In China

Business income tax is an important category of taxes to deal with allocating relationship between countries and companies and plays an important role in modern taxation system. Income tax has become main taxation of most developed countries and one of sources of fiscal income in developing countries. At the same time it plays all kinds of fiscal functions.The business income tax our country is using was established in 1994,so it has some shadows of transition period obviously. With ten years'development, our reformation has made breakthrough progress and formed basic frame of market economics. But the current situation that domestic-funded and foreign-funded companies carry out different business income tax hinders economics development at some extent. At first, two kinds of different taxation result in tax treatment unequal among local companies and domestic and foreign companies, lose tax revenues, weaken efficiency of income tax and violate the principle of equability and efficiency. Secondly, some factors of current business income tax don't apparently meet the demand of new situation because companies'economy nature, organization form and operation pattern have changed a lot in the course of economy. At last, current income tax system brings difficult for collecting and supervising income tax of companies.This paper researches and discusses current situation of our business income tax, the problems of separating two methods and technical routine of unifying two methods, put forward the concrete program of reformation and analyse probable problem, relevant measures and transition methods that unifying two methods may bring.This paper thinks unifying two methods have positive significance: firstly, providing an equal competition environment for our country's domestic-funded and foreign-funded companies, promoting equability competition between subjects of market. Secondly, unification tax rate will lower than current domestic business income tax rate, this will strengthen our companies'self-development ability including self-innovating ability, help increase individual income, expand domestic demand, promote the transition of pattern of economy increase. Thirdly, improving...