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The Problem Of Tax Base Erosion And Profit Transfer And China 's

Posted on:2017-05-18Degree:MasterType:Thesis
Country:ChinaCandidate:S ZhangFull Text:PDF
GTID:2206330503476161Subject:International law
Abstract/Summary:PDF Full Text Request
Due to the differences of the tax systems and the asymmetric information between the corporation and the tax authority, some transnational corporation implemented the aggressive tax planning so successfully that the government suffered a lot, meanwhile it also aroused the concerns of the international community. Therefore, the G20 entrusted OECD to carry out some researches, hoping to effectively break down the Base Erosion and Profit Shifting(BEPS). 2013, the OECD published Action Plan on Base Erosion and Profit Shifting, which aimed at promoting the cooperation among countries in 15 aspects, to control the overflow of BEPS. The China Ministry of Finance and China State Administration of Taxation fully participated in the Action Plans, as the partner of OECD. The double non-taxation has been the focus of international taxation. And China, lack of thorough Transfer Pricing Rules, face the same problems. Therefore, the research is of great practical significance.The paper is written in accordance with the framework of “Putting forward the question ' Analyzing the question ' Dealing with the question”. The first chapter mainly discusses the concept of Base Erosion and Profit Shifting, analyzes the conditions of implementing aggressive tax planning and the reasons why the BEPS is famous, and points out that transfer pricing is a crucial part of BEPS. By means of two typical transfer pricing cases, the dissertation elaborates that some transnational corporations are taking advantage of the hybrid mismatch arrangements and the cost contribution arrangements. And the author also puts forward some enlightenments to China. Taking the latest achievements of the OECD action plan into consideration, the author chooses the arm’s length principle, the core principle of adjusting transfer pricing, as its breakthrough point, and puts forward some countermeasures for China:China should still stick to the arm’s length principle as the core one, meanwhile China should enact specific rules, refine information disclosure system, and push forward with relevant supporting mechanism. What’s more, China should adopt the legislation mode of “Principle and Exceptions”, when the conditions are fulfilled, namely it would deal with transactions involving intangibles through the formula apportionmentmethod.Besides, the dissertation holds the view that China should promote mutual cooperation, and even the development of the multi-mechanism in order to solve BEPS problems effectively; With more and more countries ratifying The Multilateral Convention on Mutual Administrative Assistance in Tax Matters, the multi-mechanism has taken initial shapes. If the multi-mechanism is going to be a success, the formula apportionment method might be applied.
Keywords/Search Tags:Base Erosion and Profit Shifting, Transfer Pricing, Cost Contribution Arrangement, Arm’s Length Principle, Formula Apportionment Method
PDF Full Text Request
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