China And India's International Tax Competition And Coordination

In recent years, China and India's rapidly economic development, constitute the world economic development in a landscape, causing more and more world attention, and became a hot topic in economic circles between the two countries. With the global economic integration process, the two countries continue to improve the breadth and depth in international economic and international politic, and the bilateral economic trade volume increase year by year. In 2008, the China and India's trade rose to 51.78 billion U.S. dollars with the two breaking the 50 billion U.S. dollars. China and India's cooperation in the field has become increasingly widespread, but there is still much room for cooperation between the two countries, they should adopt a coordinated policy to promote the two countries to further strengthen cooperation and jointly promote bilateral economic development.Based on the trade structure between China and India, we know there has competition also has supplementary but complementary than competitive in the merchandise import and export trade. Since both countries are developing countries, so tax competition between the two countries is much intense. This competition not only brought great influence between the two countries, and seriously hampered the trade and economic development between China and India.This paper analyzes the coordinated approach in the process of tax revenue among the member countries in their regional economic integration of EU, NAFTA and ASEAN, for the elimination of tax competition between China and India, actively providing policy and recommendations between the two countries in tax co-ordination. At present, Tax Coordination in China and India is still in its infancy, the two countries only signed a double taxation avoidance agreement, apart from no other tax treaty, which would seriously affect bilateral trade. Including historical factors, political factors that determine the tax coordination between China and India's long-term and arduous.In this paper, the structure is divided into five chapters, the first chapter outlines the research background and significance, and organizes the relevant domestic and international literature review, and paper presented theoretical innovations and shortcomings. Chapter II outlines the theory of international tax competition, tax competition set out on the importance of attracting foreign investment in developing countries. The third chapter outlines the relationship of competitiveness and complementarily of the China and India's trade; and carefully explains the tax competition between China and India, such as the competition of tax rate, the competition of tax incentives; finally points out that these competitions give greatly impact to China and India trade development and economic cooperation. Chapter IV outlines the experience of international tax coordination, including the EU, NAFTA and ASEAN, and analysis the path of the formation of regional economic integration. Based on the previous analysis, Chapter V makes policy and recommendations for China and India's Tax Coordination.