Research On Sino-UK Tax Agreement

Sino-UK Tax Agreement and Sino-UK Tax Protocol are the objectives of this dissertation. Referring to OECD model in 1977 and UN model in 1979, and some bilateral tax agreements contracted with some other countries by China or UK, and using the method of comparison and generalization, this dissertation analyses the structure and content of Sino-UK Tax Agreement, and takes a view on the perspective of the developing of the agreement in the future.From the point of view of both practice and theory, research on Sino-UK Tax Agreement values a lot. Nowadays, the new round of negotiation of amending the Sino-UK Tax Agreement is still in preparation, while the finance tsunami broke out around the globe has changed the investment policies of every country, as a result, Sino-UK Tax Agreement will play a key role in investment actives between the two countries. At present time, the research on bilateral tax agreement of China still stays on the level of the two models or the macroscopic command of certain content of the agreements, left the area of specific tax agreement untouched. Researching on Sino-UK Tax Agreement, can enrich the theoretical research of International Tax Law, as well as fill up the blank in researching specific bilateral tax agreement in our country.The main body of the dissertation is divided into 5 sections.The generation and historical significance of Sino-UK Tax Agreement are researched on in Section 1. OECD model and UN model, the tax agreements contracted with some other countries by China or UK before the generation of Sino-UK Tax Agreement, and the Policy of Reform and Open and the active contacts in the diplomacy between China and UK promoted the birth of Sino-UK Tax Agreement. Sino-UK Tax Agreement, is one of the earliest comprehensive bilateral tax agreements contracted by People's Republic of China in its history, is a representative bilateral tax agreement between a developed country and a developing country, as well as a fruit of coordinating tax benefits, considering reciprocal interests, between two big countries.Section 2 analyses the structure, the effect and the principles the two countries insisted on in contracting of Sino-UK Tax Agreement. On the structure of the agreement, with OECD model and UN model being quoted to a large extent, this agreement, taking into consideration of specific national conditions between China and UK, amends the content of the models with distinguishing characters. On the effect of the provisions of the agreement, Sino-UK Tax Agreement can override the domestic tax legislation in China, while in UK, before can be applied in practice, the tax agreement should be transferred into domestic legislation, and it is the supplement of domestic tax legislation. The principles in negotiating the agreement UK insisted on, based on the aim of relieving the burden of tax-payer, reflects the UK, as a developed country, paid attention to the tax benefits of China which is a developing country, as well as reflects UK, as a capital exporter, preserved the tax benefits of resident countries.Section 3 researches on the division of tax jurisdiction of Sino-UK Tax Agreement. Profits from the operation of ships or aircraft in international traffic and pensions and other similar remuneration are under single tax jurisdiction. Income from immovable property, dividends, interest, royalties and other 7 categories of income are taxable by both countries, but the tax jurisdiction of resident country is at the first place. Business profits, income of independent personal services, and income from dependent personal services only under specific conditions can be taxed by source country.Section 4 summarizes the measures of avoidance of double taxation. Sino-UK Tax Agreement utilized tax credit, tax exemption, putting restriction on the rate of accrued income tax and relative relief to relieve the burden of tax-payers. It is a pity that tax sparing was not mentioned in this agreement. UK always seeks to the chances of limitation on applying to the articles of Tax Sparing Credit, and it is very difficult for China to win an article of tax sparing from UK in amending the original agreement in the new round of negotiation.During section 5, the perspective of the developing of the agreement in the future is predicted. We can safely draw the conclusion that the new round of amending the agreement would probably adopt protocol in type. The method OECD advised that the original definition of permanent establishment is applicable in e-commerce context through making note, is desirable for China, and it is expected that China and UK would solve the problem of judging the permanent establishment under the context of e-commercial in the new round negotiation. In practice, both China and UK have made use of articles of anti-abuse tax treaty in their tax treaties with some other countries. Whether China and UK will solve the problems of abusing tax treaty and how deserves keeping an eye on. It would be a daring attempt introducing an article of international arbitration into Sino-UK tax amending agreement.