Our Trust Tax Legislation Discussed

The core of jurisprudence theory of the unique law frame for trust system is that the ownership of trust capital is separated from its beneficial right. However, the functions and roles of trust to be exerted are confined to their various corresponding systems and polices, one of which is tax system. The problem that there is no tax system corresponding to trust, which has become a new choke point of the development of trust business in China. In trust taxes, there are a series of problems that will endanger the lifeline of trust and of which repeated taxation is the most evident and urgent to be solved. The reason is that the current tax system hasn't embodied the nature of trust jurisprudence.There are many aspects to be learned from the tax system of trust in foreign countries, such as avoidance of repeated taxation. The general idea of setting up tax system of trust in China is that the trust taxation should be based on trust conduit theory, and the unique jurisprudence theory of trust should be given prominence while the general principle of tax system should be upheld, taking the avoidance of repeated taxation as the basic point; and the definiteness and stability of policies should be combined with developing gradually, with an aim of embodying the preferential tax policy of commonweal industry. Furthermore, the basic principles of the form-transferring of property not to be taxed and the real beneficiary as taxpayer, whose core is essentialism, should be abided by to avoid repeated taxation when setting-up the tax system of trust. When law-making of the tax system of trust, the taxpaying obligator should choose who is the real beneficiary, should tax when taxation behavior and income occur, and the emphasis of preferential tax should be in the public trust. The specialized items of trust should be made independently in the basic tax laws instead of making the trust tax laws specially.