Building And Improving Capital Gains Tax System In China

Capital gains tax aims to the income that taxpayer gets from selling or transferring his capital assets such as lands, buildings, machines, marketable securities and intangible asset. This paper focuses on researching the experience and the lessons of taxing on the capital gains in the international community, analyzing the effects that Capital gains tax influences on the economic growth, stock market and the Capital flows. In the situation of excess assets liquidity in recent china, this paper discusses how to establish and improve the capital gains tax system according to the characters of our native stock market, the characters of market participants and the actuality of environment of tax collection and management.This paper probes into the establishment and improvement of the capital gains tax system under the present economy circumstance and the situation of the capital market. The tax system may make the capital market develop healthily and steadily. Designing the feasible scheme of tax system and other relevant measures under the principle of impartiality, universality, particularity and taxability is another object of this paper. The research methods include normative analysis, empirical analysis and comparative analysis. In the process of analysis, this paper abides by the combination of economics, law and politics, insists on the combination of academic analysis and empirical analysis, persists on the combination of qualitative analysis and quantitative analysis to assure the discussion reliable and reasonable.The creative point of this paper is embodied in designing taxing system of captial gains and choosing the subject of taxing. Currently, capital assets such as PI(Stocks, fund units, corporate bonds, depository receipts)should be listed into the tax base. Capital gains tax of each taxpayer is divided into two main aspect which are the first market and the secondary market in accordance with Stock Market (the first market, the secondary market) of China in the part of designing system of tax rate.In the secondary market tax rate on capital gains tax is 10%. When choosing mode of tax system, it is advised to choose the mode of individually taxing capital gains. What decide the duration of tax paying is the gains that taxpayer have already got. When it comes to the profit that have happened but have not got should not impose it. When calculating the cost of PI that investors purchase in different phase and different amount, the principle of what purchased ahead that count in advance should be applied.