An Research On Tax System Implemention On Chinese Insurance Companies

At present the issue of tax system implemention on chinese insurance companies has become more and more popular.The unique nature of insurance companies means they should develop under a regulatory regime from other financial institutions Based on complex actuarial computations, their accounting systems are unique,so it is difficult to levy taxes on them appropriately. As a result the taxation of insurers varies widely across countries and different from the tax regime to other industries in a country.We have also realized that our insurance companies have been constrained by the unreasonable places of the tax system to a large extent. Looking over the tax system of insurance companies in certain international states ,most of their policy makers have taken fully considerations to their companies according to the particularity,and given certain policy support. Morever ,in the industry, in view of different nature and scale of the Insurance company ,its tax revenue system has clear stipulation. Especially the idea that to set different rates according to various types of insurance is worthy of deep research.Considering of the present situation some of the international representative countries were compared and used for reference. At the same time ,referring to the development strategy of our companies in new era,I proposed that overall thinking and solution under the background of internationalization.This paper I composed of preface and contents that include four parts.The first part gives a brief introduction to taxation system of insurance companies in china.By reviewing and analyzing drawbacks of income tax and business tax turn up as follows:tax base is not reasonable ,it violates the tax principles that income of life insures is tax-free,different income tax treatment runs counter to equity,lower deductible payroll makes the insurers,tax burden heavy ,no catastrophe reserves is deductible ,high ,and single business tax rate does not conform to the characters of lines of business.All of these decreased the capital accumulation of insurers and disrupted the competing order in insurance market.The second part focuses on the improvement of the tax system in our country.There are three purposes on the government taxation:increasing revenues,realizing the ocjectives of social and economic development.It is obvious to see the government to achieve the purpose through the increases tax revenue.In careful consideration of current development of tax system in insurance sector and their own characteristics,I proposd the overall principle about improving the tax system of insurance company:according to principle of fair taxation ,reasonable and appropriate deduction ,we should refine system design and enrich the contents of the policy.Making full use of the tax system on macroeconomc regulation and guidance function to support our insurance industry to become bigger and stronger.In addition,I also made an standard on how to evaluate the reform of insurance company in china accord to the fair principle,the neutral principle and the concise principle at the same time :whether it is adapt to our socio-economic development ,whether it is consistent with the principle and target on tax policy,whether it is conformable to insurance supervisory system, whether it is suitable to the tax policy.The third part is the international comparison of the tax system in insurance companies..It looks in detail at the insurance income tax and premium tax across countries.I have summed up different characteristic in different countries ,obtaining each enligenment from various tax systems in countries.The determination of tax base varies a lot from other companies,due to their own internal characteristics .compensation expenditures can be deducted,such as Germany and Japan,and the tax system also varies a lot in different companie.In the term of income tax,the United States has small life insurance company relief which can come up to 60% of the taxable income at most.Britain has devided the income tax rate into three scales according to the different premium income .which has played a significant role in the improvement of tax system of insurance companies.Premium tax ,in many countries are very low or zero and the life insurance companies could have tax preferential policies at least.Most states of America allow their qualified annuity insurance free of tax.In Canada,life insurance,disability insurance,and disease insurance are not taxable. Japan only set the life insurance companies 1.5% business tax rate,and the different types of tax base should be only a certain percentage of premium income, such as savings insurance tax base is only 7% of the premium income.which is really a double primes.The torth part explores how to perfect the taxation system of insurers.The related determining factors are discussed first as follows: First I have analyzed our country non-life insurance corporation income tax system,and puts forward the reform proposal:①Re-establish the tax base.②allow Liechtenstein pretax catastrophe reserve③allow Liechtenstein total pretax reserve④allow outstanding claim reserve is not discounted.Then has outlined necessity of our country life insurance corporation income tax system design briefly.Because the life insurance product has the particularity which other insurance product does not havet:he long-term characteristic and the investment,these special nature have decided the life insurance commodity deposit function and the investment function,Judging from the actul conditions at the present stage,I think that the use of only part of savings income in the company tax underwriting income tax Because the resources are of our life insurance company are very limited,so it is difficult to estimate the real underwriting income.In the level of tax collection and management constraints,if we allow underwriting income tax into the tax base,it will be made much higher than the increase in cost of the tax revenue,not cost-effective. Therefore, under the present condition, the implementation only invests the obtained scot to the life insurance company to have the certainly practical significanceFinally, is our country Insurance company's business tax system perfect①major measures to reduce business tax rate②determine the rates of sub-types of tax③re-investment income to the tax base④certain support on investment⑤policy support for small-scale insurance companies to give tax concessions.As my theoretical knowledge and practical experience are inadequate, and the relevant information is limited, many of the issues in this paper are not go down. Although discretion has been repeatedly amended, but this omission and weaknesses are inevitable, teachers and students criticized correction...