The Comparative Study Of The Tax System Optimization Between China And South Korea

As one of the most important lever of adjusting social economy for government, tax is the main source of state financial revenues. It can affect production and development of enterprises directly or indirectly. Tax institution plays an important role in development of society and economy. With the development of China's economy and reform of economic system, tax institution developed unceasingly and corporate tax system came into being.In view of national conditions, corporate tax is the main source of state revenues. Amount of Corporate tax, as well as the role of tax policy is depended on tax system. Corporate tax system decides the effect of tax on corporate. Reasonable corporate tax system can make a tax environment of rule of law. It favors impartial competition of corporate, and promotes development of corporate forcefully, and promotes economic growth and social stability. So study on corporate tax system optimization is an important problem of China's tax system reform.China's tax system reform experienced five stages. Among these stages, the 1994 industrial and commercial tax system reform is the greatest scale and widest effective and deepest one since the new China was founded. For example, it widen the implementation scope of value added tax reform for the first time, and widely carried out production value-added tax in product and circulation field, unified system and lead the system to a formal stage. Tax reform united income tax of state owned enterprises, that of collective enterprises and that of private enterprises. The reform that combined tax collection system reform with tax system reform changed the current imprecise collection system problem and backward levying means. It improved tax collection system level and ensured the implementation of tax law and built regular tax order. The tax system reform promoted the socialist market economic system, especially built and developed macroeconomic control mechanism and strengthened ability of macroeconomic control of central government, and realized economic growth and development.However with the gradual improvement of the socialist market economic system and deepening of the development of economic globalization, the 1994 tax reform is not fit to development of the current social economy. For instance, production value-added tax do not allow tax deduction of fixed capital, and it restrained growth of investment and count against corporate technology growth and adjustment of the industrial structure and improvement of domestic product competitiveness. The discriminatory corporate income tax system brought about unfair domestic and foreign corporate tax bearing. Double-track pricing system restrained investment growth. Although tax levying reform make a great progress, levying means still fell behind and network operation among tax authorities, as well as between tax authority and taxpayer are lacked. It hampered tax levying and auditing, impeded efficiency of tax levying. To fit in the needs of new development status of economy and society actively, and to improve tax system, to face to the international finance crisis on Chinese economy, the Sate Council decided to carry out transition reform of value added tax and merged the two income tax policies from 1 Jan,2008 and 1 Jan,2009. Though current tax system promoted corporate investment, technology improvement and competitiveness in a way, there are still some drawbacks compared with South Korea.South Korea and China have a close relationship in view of history or geography, and economic policies are also quite similar. As a paradigm county in Asian economy growth, South Korea is the earliest country that carried out value added tax.1994 China value added tax reform consult Korea's system partly and China's value added tax is quite similar with that of Korea. This paper choose Korea as comparison object, based on the corporate tax system optimization theory, compares corporate tax type and tax levy management with that of Korea, and finds out problems that exist in current corporate tax system and tax levying management, and puts forward policy suggestions of optimizing corporate tax system and improving tax levying quality.