China And Pakistan Trade Relations In The Tax Coordination

In recent years, the rapid economic development of both China and Pakistan has become a hot topic in the world. Meanwhile, for the purpose of pushing forward bilateral economy and trade, the two countries have signed a collection of agreements. The yearly increase of bilateral trade volume has basically achieved, and the volume has exceeded 8.5 billion U.S. dollars by the year of 2010. Although the cooperation areas between China and Pakistan have increasingly enlarged, there is still plenty of space for cooperation between them. The two countries should adopt coordinated policies to further promote the bilateral trade.The thesis firstly uses a RCA theory to analyze the competitiveness and complementarity of the export trade of China and Pakistan, and then analyzes the similarities and differences of taxes. On this basis, the thesis brings forth that taxation is one of the most important factor that affects bilateral trade via theoretical analysis and introducing trade attraction model. Thus we need to coordinate two countries'tax policies to broaden their commerce. However, by analyzing the current situation we know that the current taxation coordination is limited to tariff diminution and the avoidance of double taxation and the prevention of fiscal evasion respect to taxes on income. Accordingly, regional taxation coordination has not turned into effective mechanism. Some problems have always been existed, such as unitary forms of taxation coordination, non-overall anti-tax evasion coordination, no-obvious effect on competitive trade as well as complementary trade and so on. Meanwhile, the factors of politics and culture, economy development level and trade structure have determined the chronicity and arduousness of taxation coordination between China and Pakistan. Therefore, the thesis analyzes the coordination experiences of trade of EU, NAFTA and CAFTA, which could provide policies and recommendations for China and Pakistan.The structure of the thesis is divided into six chapters. The first chapter outlines the background and significance of the research, and organizes the relevant international and domestic literature review, then presents theoretical innovations and shortcomings. The second chapter analyzes international tax coordination theory. The third chapter firstly outlines the current trade status and the similarities and differences of taxes between China and Pakistan, then analyzes the taxes'effect towards trade. The fourth chapter outlines the achievements and the shortage of tax coordination between China and Pakistan , then indicates the unfavorable factors towards tax coordination. The fifth chapter outlines the experiences of EU, NAFTA and CAFTA. The last chapter makes policy and recommendations for China and Pakistan's tax coordination.