The Research On The Economic Double Taxation Of Bonus Stock In The Income Tax

To improve the basic economic system, implement the finance and taxation system constructive to scientific development, strengthen taxation regulation, create fair opportunities, and improve modern market system, will give a better play to the fundamental role market plays in distribution of resources. Thus how to stimulate investors' enthusiasm and potentiality in investment, and how to eliminate the systematic taxation factors that restrain the efficiency of market in allocating resources as well as China's investment increase, has undoubtedly become a pretty important part in establishing and improving modern market system.Mainland China witnessed a taxation reform in 1994, since then, after more than a decade's development, income tax has become a crucial part among the whole taxation systematic structure; furthermore, it plays an increasingly important role in social economic development. However, some weak points and drawbacks income taxation system takes have prevented the development of economy, among which economic double taxation on dividends is one of the focal issues. Here this paper would take an exploration into this issue, and put forward corresponding advice as reference.The issue of economic double taxation on dividends results from such facts as: corporation income tax interacts with income tax paid by shareholders who hold corporation interests, and double taxation leads to the failure of taxation fairness and efficiency. Therefore, how to eliminate or ease the economic double taxation under such condition as corporation tax and income tax on different sides, realize a coordinated development of these two elements and give a full play to the whole taxation system. All of these have become one of the important research issues attracting attentions from each country of the world and regional taxation systems. In practice, each country and region has made great efforts to deal with this economic double taxation, and obtained a coordinated development between corporation tax and income tax through some types of "integrations." Therefore, to strengthen the research into "integrations," and to provide a theoretical basis for the ideas, procedures and corresponding measures of income tax "integration," plays a very important realistic role.This article includes five chapters: Chapter one mainly describes the basic theory of economic double taxation on dividends, the definition of double taxation, two basic theories on income tax, as well as an economic analysis into taxation on dividends. This serves as the theoretical basis for later parts.Chapter two makes a deeper analysis into some drawbacks of economic double taxation on dividends from two aspects: fairness and efficiency in a comprehensive manner.Chapter three introduces some methods and measures taken by each country and region in eliminating economic double taxation on dividends; meanwhile, the paper also takes an analysis into the advantages and disadvantages of those methods or measures. The reform experience of OECD countries and Taiwan's "two tax-in-one" practices and its detailed procedures can give some lights to China income tax "integration."Chapter four analyzes the status quo of China economic double taxation on dividends, as well its side effects oh corporation's distribution policy of dividends, investment policy and financial policy. Measures should be taken thereby to ease and eliminate economic double taxation on dividends issue.Chapter five, with a reference to international experience, according to China's actual conditions, puts forward the realistic choices designed to reduce side effects of economic double taxation on dividends, and to adopt imputation system with improvement of every set of supporting measures, based on part tax-imposing.The innovation of this paper lies in its research viewpoints. The paper makes an exploration and deep thinking into the relevant theories and practices of economic double taxation on dividends. From my viewpoint, it is necessary and feasible to eliminate economic double taxation on dividends to some extent. A country should not neglect other important factors related to interests of the objects and subjects of taxation, with regard to taxation reform. To eliminate economic double taxation on dividends completely, or not allow its reduction, will bring side effects to the connection between taxation system and other systems, let alone the different interests of corporation shareholders.